What Is ENS?

Ethereum Name Service is a blockchain equivalent to Domain Name System (DNS) that assigns addresses on the internet. ENS translates cumbersome Ethereum addresses comprising random numbers and letters into memorable names.

This makes the emerging Web3 ecosystem more approachable, and more marketable because, people and dApps can easily share crypto addresses. Thanks to Ethereum’s market dominance, ENS sparked a rush to get the best ENS registries, which is what happened with .com domains in the 1990s. 

ENS Origin and Stats

Nick Johnson, a former Google software engineer hailing from New Zealand, introduced the concept of the ENS in April 2016 under the Ethereum Foundation umbrella. In May 2017, ENS launched as a Top-Level Domain (TLD). The next year, ENS departed from the Ethereum Foundation as a separate entity.

TLD is at the top hierarchy level in domains. For example, with www.carinsurance.com, the .com part is the TLD. 

ENS first started with native .eth as TLD, later integrating .xyz, .kred .luxe, .app, .io, and many others.

Since 2017, over 2.3M ENS names have been created for over 550,000 unique participating addresses. From August 2021 to ENS registration peak in May 2022, combined monthly ENS revenue increased by 264%. 

For names that are longer than five characters, yearly ENS name renewal costs $5, while shorter names are pricier: four characters — $160/year, three characters — $640/year. 

New expiry years can be added at any point, but there is a minimal renewal interval of 28 days.

Because renewal fees are spent by the smart contract’s registrar, they are not retrievable. Of course, when registering a name, one also has to pay for ETH gas fee because it is a decentralized service executed on the Ethereum blockchain.

Although ENS detached from the Ethereum Foundation, it is still supported by it, alongside Ethereum Classic Labs, Binance_X, Chainlink, and Protocol Labs. Nick Johnson is heading the ENS Foundation, alongside Brantly Millegan and Kevin Gaspar.

Johnson is also leading the ENS core development team, together with notable contributors such as Sergej Nazarov from Chainlink, Dan Finlay from MetaMask, and Jason Carver from the Ethereum Foundation. 

How Does Ethereum Name Service Work?

Running on Ethereum, ENS is a decentralized name-tagging system that transforms machine-readable identifiers — addresses, metadata, content hashes — into human-readable names. Let’s take the example of Vitalik Buterin, the co-founder of Ethereum:

• Vitalik Buterin’s address on Etherscan.io is 0xd8dA6BF26964aF9D7eEd9e03E53415D37aA96045
• ENS transforms that string of characters into vitalik.eth, set to expire in 2034.

At a closer look, we see that vitalik.eth consists of two parts: a registrant and a controller. In both cases, we get the same address because Vitalik didn’t transfer his ownership. The controller has the right to edit the domain’s record. If he wished so, as a registrant owner, Vitalik could then transfer ownership to a controller, in charge of creating subdomains and other day-to-day operations.

ENS manages domain name ownership via two smart contracts. The first one is the ENS registry, a database that records and holds domain and subdomain names.

The second ENS smart contract is the Resolver. It is in charge of formatting machine-readable addresses into human-readable text, just like how DNS converts IP addresses into URL text. In other words, while DNS makes Web2 digestible, ENS makes Web3 digestible.

As a record holder, the ENS registry stores the domain’s owner and resolver. The owner can either be another smart contract or a user with an external account. The registrant is a smart contract that holds domain ownership, able to issue subdomains. Therefore, domain owners can change subdomain ownership, transfer domain ownership to another address, or set the domain’s time-to-live (TTL) caching for the domain.

In practice, when vitalik.eth is requested, a query is sent to the registry smart contract for domain ownership. The registry then outputs the resolver responsible for the conversion, delivering the address it converted.

How To Register ENS Domain?

As with all things blockchain related, one needs a non-custodial crypto wallet. Although MetaMask is the most popular one, ENS also supports internet browsers with integrated wallets, such as Brave and Opera. Altogether, the blockchain domain service supports 60 wallets.

Once installed, connect the wallet to the ENS app, with the wallet’s network set for the Ethereum mainnet. You can then register the ENS name for your wallet address by entering it into the search bar to check availability. The new ENS domain is paid in ETH, plus ETH gas fee.

At its lowest price point, an ENS domain name can go for just $5. Nevertheless, because two transactions are required (commit and reveal) both will require ETH gas fee. The process itself is as fast as Ethereum. Meaning, up to 5 minutes, until Ethereum completes The Surge upgrade.

Per Ethereum wallet address, you can only have one Primary ENS name, allowing dApps to automatically display your name when connecting to them. Practically, all Ethereum dApps support ENS across all categories, from Uniswap and Aave to OpenSea and Decentraland. 

Can You Import DNS Names?

If you already own a traditional domain name, via DNS, entering it into ENS search text will give you the DNSSEC option. Domain Name System Security Extensions (DNSSEC) is an additional layer of security that website owners typically turn on to prevent DNS-based attacks.

That’s because it cryptographically signs DNS data. When people visit pages or open email links, all the data goes through DNS, converting IP addresses into domain names. With a DNSSEC turned on, the resolver for that conversion verifies if the origination data hasn’t been modified from the zone it came from.

ENS dApp asks for DNSSEC to be activated by your domain service provider. Note that there is no downside to turning on DNSSEC.

Because you already own the domain, the DNS import would just require ETH gas fee. Once imported, it will appear under “My Account” alongside regular ENS names.

ENS Governance Token

ENS token is the protocol’s governance token, capped at 100M ENS, out of which 20% is in circulation. ENS token holders are granted DAO voting rights, affecting its direction. One of the biggest such collaborations between ENS token holders is the creation of the ENS Constitution.

For example, to instill confidence in ENS domain shoppers, the constitution is committed to not infringing the owners’ ability to name, extend, transfer, or withhold ENS names. Token holders can submit other proposals or amendments to the constitution, but such additions would have to pass a 100,000 vote threshold to even be considered as a voting candidate.

This is similar to many nations’ thresholds for referendums, where signatures first need to be collected for referendum voting to take place. ENS token holders can also vote on allocating funds for Web3 projects, appointing DAO directors, etc. Representing DAO legally in the off-chain world is the ENS Foundation, incorporated in the Cayman Islands.

Out of 100M ENS, half is reserved for the community, while a quarter goes to ENS development contributors. Users who have signed up for ENS domains (.eth) by Oct. 31, 2021, received the remaining quarter. ENS token reached its highest price point in November 2021, at $85.69.

ENS tokens are available on all major centralized exchanges, such as Binance, OKX, FTX, or Bitget. Likewise, it is in liquidity pools on the biggest decentralized exchanges like Uniswap, SushiSwap, or 1inch.

Series Disclaimer:

This series article is intended for general guidance and information purposes only for beginners participating in cryptocurrencies and DeFi. The contents of this article are not to be construed as legal, business, investment, or tax advice. You should consult with your advisors for all legal, business, investment, and tax implications and advice. The Defiant is not responsible for any lost funds. Please use your best judgment and practice due diligence before interacting with smart contracts.