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Ethereum Naming Service Overview: How it Works, Where to Buy ENS
When it comes to blockchain, it can become quite tedious sending and receiving funds. Copying and pasting long alphanumeric strings into fields, double checking if it’s right, and checking again just in case. Ethereum Naming Service (ENS) changes that, allowing human-readable addresses to be associated with the long combination of numbers and letters we’ve all come to know as our public addresses. ENS is the governance token of the ENS Decentralized Autonomous Organization (DAO), allowing community members to vote on the future direction of ENS.
Ethereum Naming Service helps to simplify the sending and receiving of funds in the cryptocurrency sector. This is similar to the DNS allowing you to type in CryptoVantage.com to get to our page rather than having to type in our IP address. Domains created using the ENS registration service work as NFTs and can be sent to anyone else, payment will go to the wallet that holds the NFT. ENS is not needed in order to buy a domain, as all domains are paid for in ETH. Read CryptoVantage’s ENS review to find out what ENS is and whether it is something you might be interested in adding to your portfolio.
ENS Pros and Cons
Pros
Human readable names
Transferable NFT
Makes sending and receiving payments easier
Subdomain control
Cons
Yearly subscription price
Token itself has little utility
Other competitors in the space
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ENS Ratings
Developer Engagement
- Rating: Medium
- Reason: Active Github repositories with frequent work being done daily. Active community DAO too.
Disbursement
- Rating: Medium
- Reason: 50% (50 million ENS) was distributed to the core team and the community airdrop. 25% for the airdrop is well-distributed with over 137k accounts, but the 25% for the team and contributors was only about 500 accounts.
Liquidity
- Rating: Medium
- Reason: Available on most major exchanges and does about $50 -$100 million USD in volume per day.
Network Speed
- Rating: Low
- Reason: Uses Ethereum blockchain network which currently processes about 15 transactions per second.
Supply
- Total Supply: 100,000,000 ENS
History of Ethereum Name Service
Ethereum Naming Service as a project started as part of the Ethereum Foundation in 2017 but became a solo project in 2018. ENS previously sold domains for ETH in 2017 through an auction-based system and allowing registration. These domains are still valid and users who bought during this period can reclaim the ETH deposit they had to pay for the domain. There were no ENS tokens at this time.
In 2021, ENS announced they were going to be launching a DAO for their application. Users would be retroactively airdropped ENS tokens based upon whether they held a second-level domain, how long they had it, and how long it was registered for in the future. The airdrop took place in November 2021, with users being able to claim their airdrop rewards until May 4, 2022. Users who hold ENS tokens get a say in the future direction of the project.
Advantages of Ethereum Name Service
The main advantage of Ethereum Name Service is that it gives users a human readable address. This address can be given to someone in lieu of your public address or entered into an Ethereum DApp. Your actual public address is then parsed using the blockchain and the ENS NFT. This also works in the opposite manner.
Whoever holds the domain NFT is who receives payments sent to that ENS address and the NFT is transferable. This means you can sell your domain to someone and give them the rights to it through the sale of the NFT.
The other advantage of ENS is that once you register a domain, you get total control of all subdomains. This means if you register “CryptoVantage.eth”, you can also register “wallet.CryptoVantage.eth”, or any other address that uses the main domain address. ENS can also be linked with other domains such as .com, .org, or, .edu and payments can be sent to those domain addresses within Ethereum Dapps too. This means you could send payments to CryptoVantage.com the same way you could send to a public address on the blockchain.
As noted in the introduction, ENS as an asset is not needed in order to buy and register domains with ENS, this is actually an advantage as well as it creates equality in barrier to entry.
Disadvantages of Ethereum Name Service
The main disadvantage of Ethereum Name Service is that it costs a yearly fee in ETH that varies depending on the length of your domain name. You can pay for registering years in advance, but ideally you want to pay for a domain when the price of ETH is high, as the subscription fees are paid in USD equivalent of ETH.
The other disadvantage of ENS is the token doesn’t have a lot of utility. It’s solely used for governance and voting on proposals. Users can create a ENS domain without any need for ENS itself, as fees are paid in ETH.
Ethereum Naming Service Frequently Asked Questions
Ethereum Name Service is a naming service on the Ethereum blockchain. It converts human-readable addresses like CryptoVantage.eth into machine-readable addresses such as your public Ethereum address. It also works the other way around.
Yes, Ethereum Name Service is safe as it is protected by the security of the Ethereum blockchain. ENS domains can never be taken away from owners either.
You must register your ENS domain. Registration costs are set at the following prices:
- 5+ character .eth names: $5 in ETH per year.
- 4 character .eth names: $160 in ETH per year.
- 3 character .eth names $640 in ETH per year.
Users can pay for future years in advance (future registration).
Users who are or have been the registrant of a .ETH second-level domain are eligible for the airdrop. The distribution is based on the total time of an address’s past registration (how long they’ve had it) and future registration (how long they’ve registered the address for) as of October 31st, 2021. Users have until May 4, 2022 to claim their ENS tokens.
To get an ETH address you must register a domain through the ENS app or a similar service such as Unstoppable Domains. Costs vary depending on the length of the name.
Ethereum Name Service was created by Nick Johnson, a software engineer from New Zealand.
