A new protocol called the Ethereum Name Service (ENS) domain has been created on the Ethereum chain and has created its own ENS token. With the implementation of community-based DAO’s and their integral role in Web3.0, let’s look at why the token shot up by 300%. Each blockchain has its added benefits, but no space has done as much as Ethereum’s blockchain. With the creation of DeFi, we have so many more financial applications being created on blockchain networks, all of which have begun through Ethereum. Different projects such as NFTs, DAO’s and dApps have attracted thousands of developers, which in turn have brought forward millions of users into the Web 3.0 space. But with Ethereum’s blockchain, in particular, there are a few limitations as well. In particular, this has to do with the blockchain’s limited accessibility across people and its ease of use. In this case, we are referring to the actual Ethereum wallet addresses and complicated hexadecimal codes that exist. Just like the world wide web and the internet require you to input long IP addresses on the search bar before you can load a new page, you are forced to use complex wallet addresses and transaction hashes in the Web3 and crypto space as well. Ethereum Name Service (ENS) exists to combat this very issue. So what is the ENS?
What is Ethereum Name Service (ENS)?
Ethereum Name service is a distributed naming system that exists on the Ethereum blockchain. The domain works to translate complex identifiers such as crypto wallet addresses and long hexadecimal strings of numbers and hashes into simplified and readable wallet names – making it easier to share and remember addresses on the Ethereum blockchain. Simply put, it is a naming service that works not only for crypto wallet addresses but also for hashes, metadata, and other machine-readable identifiers. Ethereum makes it so much easier to create these domains because of the deployment of smart contracts on their platform. In fact, the origin of the Ethereum Name Service would not be possible without these digital contracts which can be signed by different parties. Like you would sign physical contracts for multiple different purposes, smart contracts are digital agreements that run on a predefined set of rules. Since smart contracts manage peer-to-peer interactions on the Ethereum blockchain as well, many DeFi applications use them to facilitate different use-cases – ENS being one of them. For an ENS domain to be created, it uses an ERC (Ethereum Request for Comment) token, which is a standard used for creating and issuing smart contracts. ENS domains use ERC-721 tokens since they deploy Non-Fungible tokens (NFTs). NFTs unlike cryptocurrencies are unique cryptographic tokens that cannot be replicated. The ENS domain requires this feature since it looks to provide a unique wallet address to users, which is deployed on the ERC-721 token. The Ethereum Name service gives any user on the blockchain the chance to create a simpler website-style address, which can contain just a few letters. To actually get an ENS domain, one has to register for it. The most common way of registering took place via using the Vickrey auction format. But at the moment, any user can simply purchase an ENS domain without needing to buy it at auction. The price of the domain keeps creasing if the domain name you opt for has lesser letters. It always ends with a ‘.eth’ at the end as well. Users have to pay just around $5 annually to purchase the domain name, but hefty gas fees would probably cost around $250.
Why Is ENS Becoming Popular Now?
While ENS was only established as a domain-based protocol, on November 1, it was announced on the company’s official Twitter account that it would be decentralizing governance and accepting applications for DAO delegates https://twitter.com/ensdomains/status/1455283001248698376 The company went into a more in-depth overview of the reason for their decision. They stated that ENS was always focusing on the decentralized aspect, since no one could take another persons’ created domain name, but thought that there were a few things that required a little human discretion. The DAO space, which allows for a bunch of communities to come together and exist harmoniously on blockchains and make decisions together, has also been growing rapidly in 2021. So ENS thought that it was the right time to pass over ENS governance, a system put in place to manage the whereabouts and safety of the domain, over to the community which will now exist thanks to the creation of their own DAO and ENS governance token. The company hopes that the governance of ENS starts to evolve over time. Token holders will be at the centre of the decision-making, but the DAO can represent a whole number of interested members. Individuals and members who believe in the ENS token will ideally be involved in the decision-making process as well, in order for the right calls to be made so the token benefits the majority of the people, instead of benefitting a select few who have a big stake in the coin. But luckily, those who have been loyal to ENS for a long time and had created an ENS domain created before October 31 had the opportunity to receive free ENS tokens as part of a giant airdrop that was announced during the start of November. During the ENS token airdrop, over 100 million tokens were distributed. 25% of these tokens were sent to the domain users who registered for the .eth domains, and another 25% were distributed to users who had made a significant contribution to ENS over the last few years. The other 50% is in the power of the DAO community treasury, the team that has given so much importance to this community since the power of the token and its price could either go up or fall depending on their decisions. One of the external contributors named Zhang received a total of 46,296 tokens. On November 1, when the coins had been handed out, this was worth over $3 million. He along with 27 others received the same amount of tokens. Zhang had the following to say about the token rollout. “I’m not cashing any tokens out. As long as ENS continues to grow in the right direction, I don’t see any competitors. So that means the value is much bigger than the current market cap if we’re looking at it as an investment. The director of operations of ENS, Brantley Millegan had also tweeted about the importance of being an ENS token holder on his Twitter. https://twitter.com/BrantlyMillegan/status/1458167522340052992?s=20
ENS Token Soars By More Than 300%
The ENS token only went live only on November 9, 2021, but it has already gifted its token-holders with splendid returns. After going live with a price of just $25, the coin sky-rocketed to an all-time high of $84 just two days later, according to Coinmarketcap. This was a 3x increase in just 48 hours after the coin was released and since then, although it has corrected, it is still looking like a very strong investment opportunity. You can currently buy the ENS token for $55, but it’s still very early days for the coin. So are you going to be a part of this new protocol and join the Ethereum Name Service Domain? Do you think you want to invest in the ENS token? Let us know all your thoughts in the comments section below!