Ethereum Name Service

What is Ethereum Name Service (ENS)?

The Ethereum Name Service, commonly known as ENS, is Web3’s answer to DNS.

DNS, or the Domain Name Service, was a vital internet development that allowed the linkage of a human-readable domain name, like “cryptomarketcap.com,” to an IP that a computer could understand.

IP addresses weren’t that bad, but typing in an easy-to-remember domain name is still far simpler than having to memorize and enter a series of up to 10 or more digits.

Cryptocurrency addresses, such as your wallet’s public keys, are even worse. Addresses, hashes, metadata, and other things that get registered on blockchains like Ethereum are very difficult to remember.

With enough effort, you may be able to remember your own Ethereum wallet address. But what about those of your family, friends, crypto exchange, business associates, and so on?

That’s where ENS comes in. Using the Ethereum Name Service, you can buy a “.eth” domain and link it to your wallet address. Every time you need to receive a payment or enter your wallet address, you can now simply use your new ENS domain.

When Was Ethereum Name Service Launched?

The Ethereum Name Service was first launched in March 2017, but it was pulled back and rescheduled due to various issues.

The team and community discovered two issues with the auction registrar smart contract. Despite fixing the first bug, the team decided to call off the launch upon the discovery of the second.

ENS finally went live the following month, but it took over four years of building and development before the team could transition to the ENS DAO. This was enabled via the ENS token airdrop in November 2021.

Who are the Founders of Ethereum Name Service?

ENS was originally part of the Ethereum Foundation but became its own entity in 2018.

Nick Johnson, a software engineer from New Zealand, led the 9-member ENS team. Importantly, its treasury is governed by a 4-of-7 multisig root key. The holders are:

• Nick Johnson, ENS lead developer
• Sergey Nazarov, Chainlink founder
• Dan Finlay, Metamask lead developer
• Taylor Monahan, MyCrypto founder/CEO
• Aron Fischer, Colony lead engineer
• Jason Carver, Ethereum Foundation developer
• Martin Holst Swende, Ethereum Foundation security lead

How Does Ethereum Name Service Work?

The Ethereum Name Service sounds very simple—just like traditional DNS. However, it is actually built atop the Ethereum blockchain. ENS uses the automation of smart contracts to function rather than being a manually controlled or centralized system.

One of ENS’ two main smart contracts is a registry, which records all domains, subdomains, and the owner’s details. It also records the link to the Resolver—the other main smart contract that handles transactions from names to addresses, hashes, on-chain data, etc.

Furthermore, it’s also possible to create subdomains. So, if you were to buy the yourname.eth domain, you could also register “blog.yourname.eth” or “payme.yourname.eth.” The possibilities are endless.

The .eth domains that the Ethereum Name Service provides are ERC-721 tokens. These are non-fungible tokens (NFTs), which means you fully own them once you’ve registered. This also means that you can transfer or trade them, which opens up an entire world of opportunity.

To obtain an ENS domain of your own, you can visit app.ens.domains and connect your non-custodial wallet. Once signed in, you can search for your preferred .eth domain. If it shows up as “Available,” you’re good to go.

Once you decide to pick up a .eth domain, you can select how long you wish to register for and then approve the transaction from your wallet. The duration for which you choose to register will affect the price you need to pay for registration.

What Makes Ethereum Name Service Unique?

The Ethereum Name Service is unique for its near-total embrace of Web3 ideals, including full deployment of the protocol on the blockchain. It also gives users .eth domains as NFTs, which users fully own, and is governed by ENS tokens as a decentralized autonomous organization (DAO).

The deployment of the Ethereum Name Service on Ethereum makes it more secure, private, and—most importantly—decentralized. This means that once you own your .eth domain, nobody can take it away from you.

The security of Ethereum can’t be underestimated, either. DNSs often come under attack and are prime network targets that could be easy to take down. To take down an ENS domain, an attacker would have to compromise Ethereum, which would be no mean feat.

It is also notable that ENS is not attempting to disrupt DNS. Rather, it simply aims to provide distributed name resolution for Web3, including addresses and on-chain content. There are other projects trying to replace DNS.

Perhaps controversially, ENS also allowed sites with more than 1000 top-level domain names, such as .com, to integrate directly with ENS. This had the effect of reserving many corporate domains. Early ENS adopters, therefore, couldn’t swoop in and invest in domains that companies may someday want to own and could pay a premium for.

How is the Ethereum Name Service Secured?

As mentioned, the Ethereum Name Service and ENS token are secured by the Ethereum blockchain.

Ethereum is one of the most decentralized and battle-tested blockchain networks in the industry, often considered second only to Bitcoin in this regard.

It’s secured by proof-of-stake (PoS) consensus, where validators of the blockchain have to bond a minimum of 32 ETH to the protocol. This represents a significant investment, especially for validators who bond far more than the minimum.

These validators are incentivized to perform their duties of proposing and validating blocks and maintaining uptime. They receive block rewards proportional to how much ETH they have staked in the network, and this usually constitutes a significant income.

On the other hand, misbehavior leads to the slashing—or confiscation—of staked ETH. Since most validators bond a very significant sum to the protocol, slashing is usually quite an effective penalty.

What is the Use of ENS?

The ENS token is the governance token of the Ethereum Name Service. It is an ERC-20 token, which means that it is fungible. Therefore, it is completely unlike and separate from the ERC-721 non-fungible .eth domains.

The ENS token was airdropped to Ethereum Name Service users in November 2021, and it’s used in protocol governance. ENS token holders can propose and vote on governance proposals, and they can play a huge role in the Ethereum Name Service’s direction and future.

Who Controls Ethereum Name Service?

The Ethereum Name Service is controlled by the Ethereum Name Service DAO. The airdrop of ENS governance tokens to service users was made in an effort to grow ENS from a centralized team to a distributed organization.

The ENS DAO is made up of ENS token holders, who can leverage their ENS tokens toward governance proposals. These proposals can cover the governance of various protocol parameters, ranging from .eth domain pricing to usage of the community treasury.

In order to pass, each proposal needs to be voted on by a certain threshold of participants and receive a majority vote.

How Much ENS is In Circulation?

Ethereum Name Service has a total maximum supply of 100 million ENS tokens. 25% of these tokens were airdropped to .eth holders, and a further 25% went to ENS contributors. The remaining half of the ENS supply went to ENS DAO.

Users received an airdrop of ENS tokens relative to the total registration time of their domain, including registrations extending up to eight years into the future. These users had to vote on proposals to claim their airdropped tokens, and unclaimed tokens went to the ENS DAO.

Out of the 25% ENS contributor allocation, almost 19% went to core contributors. Select integrations received 2.5%, while external and future contributors were allocated 1.29% and 1.25%, respectively. Launch advisors received 0.58. Namely, keyholders got 0.25%, and active users of the project’s Discord channels were given 0.125%.

How Do You Buy ENS?

Several cryptocurrency exchanges were quick to list the ENS token following its airdrop, knowing that many users had received significant value and would look to cash out.

Therefore, ENS has a good presence on centralized exchanges and is available on many of the top platforms. You can also buy ENS on various decentralized exchanges. Since it’s Ethereum-based, it is particularly easy to buy it on Ethereum DEX platforms.

Is It Possible to Buy ENS Instantly?

Buying ENS off a DEX depends on two things. Firstly, transacting ENS can be instant if you’re using one of the many layer 2 scaling solutions. Many networks, such as Polygon and Loopring, can be used to buy ENS in the blink of an eye.

The second factor, network congestion, applies more to the main-layer Ethereum. Not using a layer 2 is certainly a viable option, but it might take up to a couple of minutes and cost a little more in gas. If the Ethereum network is congested, you might have to wait a while for the transaction to go through unless you’re willing to engage in gas wars.

Buying ENS or any other cryptocurrency on a centralized exchange (CEX) is usually instant. This is because, unlike on-chain transactions by a DEX, there’s generally no settlement involved.

Taking settlement of a CEX transaction usually means withdrawing it from the exchange into your private wallet. This could take a short while due to processing time as well as KYC (Know Your Customer) and AML (Anti-Money Laundering) protocols.

How Do You Store ENS?

You can store your ENS tokens (and your .eth domain NFT) in any reputable Ethereum wallet. One of the most popular wallets out there is Metamask, which connects easily via browser to the ENS app and most—if not all—other Ethereum-based decentralized applications (dApps). There are plenty of other wallets you can do the same thing with, such as Trust Wallet or the layer-2 integrated GameStop Wallet. If you prefer cold storage, you could also store your ENS in hardware wallets like Ledger.

Ethereum Name Service Energy Consumption

ENS encompasses a lot of things—from a DAO to a system of smart contracts that form a dApp to a set of fungible and non-fungible tokens. What it isn’t is its own network or blockchain.

This means that it has no major network infrastructure of its own, and its energy consumption is minimal. Even if there were an event that saw Ethereum’s capacity being dominated by ENS for whatever reason, Ethereum itself is far cleaner these days following its switch to proof-of-stake.

Is ENS a Good Investment?

As a cryptocurrency, ENS has a very limited utility and almost no use case outside of its primary function, which is voting. And yet, that one main function could one day be considered fundamental for the mass adoption of Ethereum and Web3.

ENS tokens give holders a voice in the direction and future of a service that could be crucial for the industry. If the history and importance of DNS are any indication, ENS could certainly be here to stay.