V God: ENS is the most successful non-financial Ethereum application to date

Recently, Vitalik Buterin said in an interview: "The Ethereum Domain Name Service ENS is the most successful non-financial Ethereum application to date, and can basically be likened to a decentralized phone book."

On October 9, 2021, an unknown wallet purchased the Ethereum domain name paradigm.eth for 420 ETH, which is the largest ENS domain name transaction to date.

Why spend so much money to buy a domain name? How to register it? What kind of business opportunities are hidden behind it ? Let us find out.

What is ENS?

A while ago, a user discovered through on-chain data combined with ENS that a series of Ethereum addresses related to an analyst at Divergence Ventures had interacted with the Ribbon product before the Ribbon airdrop was announced (May 25, 2021). In the end, more than 30 addresses received the airdrop , which led to suspicion of "insider trading" and caused a sensation.

Including the earlier OpeaSea "insider trading incident", it was actually because the corresponding executives used their own public ENS addresses that were dug out.

The key player among them is "ENS", which stands for Ethereum Name Service. It is a distributed domain name service based on Ethereum. It provides a secure and decentralized way to resolve simple human-readable domain names into on-chain and off-chain address resources.

ENS was officially launched on Ethereum on May 4, 2017. Through a unique bidding mechanism, any user can register one (or more) Ethereum domain names ending with ".eth" for their Ethereum address through a bidding process.

Simply put, ENS can map a person’s long and difficult-to-remember “Ethereum address starting with 0x” to a custom short address, such as satoshi.eth, vitalik.eth, etc.

In this way, in wallets that support ENS, users no longer have to copy and paste long addresses. They can directly use ENS domain names to bind various cryptocurrency addresses and receive cryptocurrency payments.

At the same time, ENS can also be used with your own DNS domain names. Currently, ENS supports many DNS domain names, such as ".com", ".io", ".xyz", etc.

In addition, ENS is built on the ERC721 protocol, which means that each ENS domain name is actually an NFT . Therefore, after the registration is completed, you can choose a price in NFT trading markets such as OpenSea and then auction and transfer it.

To some extent, the long mixed form of numbers and letters such as Ethereum addresses (usually 42 characters) is not user-friendly for most users, and is not conducive to the popularization of encryption. Every year, huge losses caused by incorrect address input are frequently reported in the news.

ENS replaces Ethereum addresses with characters that are easier for humans to remember, which is a key step in the popularization of encryption . Users can choose a more friendly user address to remember, making it easier to send and receive encrypted assets and reducing the risk of transferring to the wrong address.

The development of decentralized domain names

According to ENS's previously released financial report, it received a total of approximately US$310,000 in funding in 2020 and earned US$700,000 in ETH. Its expenditures in 2020 were US$760,000, mainly in terms of salaries, legal advice, hackathon awards, bounties, and website and service hosting .

As of now, ENS has nearly 1.16 million registered domain names and has integrated more than 500 applications, from wallets, applications to browsers, gradually establishing a relatively complete ecosystem.

At the previous Shanghai Wanxiang Blockchain Summit, Vitalik also stated that infrastructure is key for users, and ENS is a very important infrastructure.

There are many Ethereum users using ENS, and more and more people are expected to use ENS in the future. The current problem facing ENS is that all functions are implemented on the mainnet, which leads to very high transaction fees. This is also the challenge we face in infrastructure.

So at the same time, in addition to ENS based on Ethereum, there are some other blockchain domain name systems. They have the underlying advantages of low cost and high throughput of competing public chains, but they are temporarily inferior to ENS in terms of ecological construction .

This includes the EOS short domain name that is already familiar to the public, the DAS based on Nervos, the TNS of the Terra ecosystem, the Solana ecosystem domain name service, and so on.

EOS Account

Among them, the design of the old EOS account itself is like an Internet domain name, which is 12 characters that can contain numbers and letters: registering an account requires a correctly mapped EOS account. After successful mapping, the user will have an EOS public key and a corresponding private key. However, EOS accounts shorter than 12 characters require auction. It is not only short, but also supports the concept of domain.

DAS Account

The emerging DAS (Decentralized Account Services) is a "decentralized account system developed based on Nervos CKB". All DAS accounts end with ".bit" and can be registered in multiple languages ​​and even Emojis. Each DAS is unique, and DAS accounts with the same name cannot be created repeatedly.

At the same time, DAS is designed based on Owner and Manager, which provides different and richer gameplay possibilities compared to ENS:

• Owner, the ultimate owner of the DAS account, can transfer the account and set the account administrator;

• Manager, the administrator of the DAS account, can manage the Records, sub-accounts, etc. of the account;

Previously, the final transaction price of the NFT of "OK.bit" in the Binance auction was 44529.2 BUSD. On October 19, the trading market of the DAS domain name was also opened, which was equivalent to opening a special liquidity market for DAS, taking a key step towards fair market pricing.

TNS Domain Name Service

TNS is the domain name service system of the Terra ecosystem, developed by the Terra ecosystem block browser Extraterrestrial Finder team, and aims to provide Terra ecosystem domain name services with suffixes such as ".ust".

It is reported that TNS has gradually opened the preferred domain name service to users from October 25, 2021.

SOL Domain Name Service

The Solana Name Service aims to provide a decentralized and affordable way to connect domain names (.sol) to on-chain data. This on-chain data can be SOL addresses, IPFS content IDs, images, text, or anything else.

A clear advantage of the domain name service is that it can be mapped to the SOL address, making it easier for people to read and replace the SOL address for on-chain transfers and payments. Currently, domain name registration in English, Simplified Chinese, Traditional Chinese, and emoticons is supported, and all USDC received will be used to repurchase and destroy FIDA (Bonfida project token).

ENS Registration Experience

Next, we will take ENS as the main object, and through the actual registration, de-analysis, and usage processes, let us understand in detail the characteristics, relative advantages, and possible role positioning of decentralized domain names in the WEB3 era.

For example, the domain name xxxxx.eth is registered in three steps:

First, we need to confirm a transaction in our wallet. This is the first of two transactions required to complete the domain name registration. If step 2 is not performed within 24 hours after step 1 is completed, you will need to start again from step 1.

Secondly, after approving the transaction in step 1, wait for about 1 minute to make sure that no one else on the Internet has chosen to register this domain name, which is also protecting our registration request.

Finally, we need to confirm a transaction again in the wallet. Only after this transaction is confirmed can we determine whether the domain name has been successfully registered.

If you register for a one-time period of 5 years, it will expire on October 18, 2026, at which time you can choose to renew it, which is similar to the rules for traditional Internet domain names.

At the same time, the main costs of the entire process are the on-chain operation fees for contract interactions. As a 5-digit domain name, the actual registration price is not expensive (5 US dollars). The bulk of the costs are mainly the on-chain operation fees for a series of contract interactions during the period.

Of course, this is just a five-digit ENS address. Most of the other shorter or more meaningful domain names may have been registered, just like the paradigm.eth mentioned above. With the development of the industry, it contains huge commercial value. When you have time, you can also check out the ones you like or plan to ambush. Maybe there will be a great opportunity to pick up a bargain in the future.

I also saw a new news a while ago that the Ethereum Foundation, Ethereum Domain Name System ENS, and digital identity certification company Spruce jointly launched the website login.xyz to track the progress of Sign-In with Ethereum. Sign-In with Ethereum is a set of technical specifications for logging in to third-party web applications through Ethereum accounts , enabling users to control their digital identities through Ethereum accounts and ENS profiles instead of relying on traditional middlemen.

It is currently used in Web3 and aims to standardize with best practices to make Web2 services easier to adopt. At the same time, decentralized domain names such as ENS are not only used for addresses, but will also cover all aspects of DApp services in the future .

On October 8, 2021, ENS announced that it now supports setting NFT avatars in personal profiles. Users can set any NFT they own as the avatar of their ENS profile, and then DApps can display the avatar next to the user's ENS name.

According to the current development momentum of NFT and the increasing popularity of Web3, ENS and others are likely to become the next wave of NFT hot spots, and even become the key carrier of user digital identity in the Web3 era, which deserves our special attention.