What Is the Ethereum Name Service (ENS)?

The cryptocurrency world, while innovative and promising, often presents a steep learning curve for newcomers and those not well-versed in technology. One of the key challenges in this space is the complexity of crypto transactions. Typically, to send a crypto payment, a user must deal with long, public wallet addresses, consisting of a confusing string of numbers and letters. Each cryptocurrency also has its own unique address, adding to the complexity and confusion, especially for beginners.

Besides Ethereum addresses, ENS also offers human-readable domains for other crypto wallets, websites, content hashes and metadata — aiming to be your Web3 username, connecting all your addresses and websites under a single nickname, so that you can receive any type of cryptocurrency or NFTs via your ENS domain.

As per the ENS Documentation, the protocol calls itself “a distributed, open, and extensible naming system” that offers decentralized, blockchain-secured domain naming and look-up services. Due to its decentralized nature, ENS isn’t controlled by a single entity. This makes ENS more secure than centralized naming services as there is no single point of failure.

What is ENS?

Ethereum Name Service (ENS), launched in 2017 by Nick Johnson, is a transformative feature within the Ethereum blockchain that greatly simplifies user interaction with complex addresses. Essentially, ENS is a naming and lookup service that converts the machine-readable, complicated alphanumeric blockchain addresses into human-readable formats. This innovation is akin to a nickname generator for public Ethereum addresses, enhancing the accessibility of cryptocurrency transactions.

For example, a typical Ethereum public address, composed of a lengthy string of 42 hexadecimal characters like “0xDC25EF3F5B8A186998338A2ADA83795FBA2D695E,” can be daunting to share and use. ENS addresses this challenge by allowing users to create simpler, memorable names, such as “PLISIO.eth”. This nickname is automatically linked to the user's public address, making it easier to share and use. Think of it as the crypto equivalent of converting a complex IBAN into a user-friendly name.

ENS extends its utility beyond just Ethereum addresses. It offers human-readable domains for various crypto wallets, websites, content hashes, and metadata. This positions ENS as a versatile Web3 username, integrating all your addresses and websites under a single, easily manageable nickname. Through this, users can receive any cryptocurrency or NFTs via their ENS domain.

As per the foundational principles of ENS, it's described as a distributed, open, and extensible naming system. The decentralized nature of ENS ensures enhanced security and reliability, as it eliminates a single point of failure typical in centralized naming services. This decentralized approach ties in with the broader ethos of DeFi (Decentralized Finance), which aims to apply blockchain technology to more complex financial use cases and grants users complete control over their assets.

Moreover, ENS domains are not just functional; they also have intrinsic value as assets. Each ENS domain name doubles as an ERC-721–compliant NFT (Non-Fungible Token), allowing it to be traded across various NFT wallets and marketplaces. This dual utility underscores the innovative integration of blockchain technology in everyday digital interactions, making ENS a cornerstone in the evolution of decentralized internet and finance.

How does Ethereum Name Service work?

The Ethereum Name Service (ENS) operates on a sophisticated yet user-friendly system built upon two key Ethereum smart contracts. The foundational element of ENS is its registry contract, which records all domains registered on ENS. This registry maintains three crucial pieces of information for each domain: the domain's owner, the resolver, and the caching time for all records under the domain. The resolver, as the second smart contract, plays a vital role in translating human-readable domain names to machine-readable addresses and vice versa, effectively linking each domain to its corresponding user, website, or address.

For those looking to establish their presence in the Web3 world, creating an ENS domain is a straightforward process. Users can start by visiting the ENS app and searching for an available domain name. Once a desirable name is found, the registration process involves confirming two transactions from the user's wallet and paying an annual fee, which is US$5/year for names longer than five characters. Owning an ENS domain allows users to connect it to their crypto wallets, websites, and even create multiple subdomains, like email.yourname.eth or website.yourname.eth, all unified under the same ENS domain.

The ENS system is structured similarly to the Domain Name System (DNS), using hierarchical names (domains) that give users complete control over subdomains. The ENS architecture consists of three principal components: the registry, the resolver, and the ENS name itself. The registry is a core smart contract listing all domains and subdomains, mapping them to Ethereum addresses. When a new name is created, the contract registers a new entry linking the name with the user's Ethereum address. The resolvers facilitate updates of domain names to Ethereum addresses and are responsible for resolving names on ENS by querying the registry. Finally, the ENS name is officially registered following confirmation of the entry in the registry, with the domain name and Ethereum address stored on the Ethereum blockchain, ensuring it is tamper-proof and publicly visible.

ENS also extends its utility to decentralized websites (dApps), allowing users to register domain names by creating an entry with their website’s InterPlanetary File System (IPFS) hash. This feature integrates with IPFS, a peer-to-peer file system supported by web browsers like Brave, MetaMask, and Opera, further cementing ENS's role in the evolving landscape of the decentralized internet.

How to Get an ENS Domain

To acquire a personalized ENS domain, you first need to have a non-custodial Ethereum wallet compatible with ENS. This wallet's address will be linked to your chosen ENS domain name. It's advisable to select a wallet that can be easily accessed via browser extensions and is capable of interacting with Web3-based platforms, as this will facilitate the purchase of your ENS domain.

Additionally, you must have some ether (ETH) in your wallet. This is necessary to pay for the registration of your domain and to cover the associated transaction fees, commonly known as gas fees. There are various methods available for purchasing ETH and transferring it to your non-custodial wallet.

The annual renewal fees for ENS domains vary based on the length of the domain name: $5 for names with five or more characters, $160 for four-character names, and $640 for three-character names, excluding the gas fees.

To register for an ENS domain, follow these steps:

Connect Your Wallet to ENS: Visit https://app.ens.domains/ and connect your wallet to the site using the 'connect' option. Follow the instructions that appear in the pop-up to link the dApp to your wallet.
Search for Your Desired .eth Name: Use the search bar on the ENS domain platform to check the availability of your desired name. If it's already taken, you can see who owns it and when their registration expires. If it's available, select how many years you wish to register it for and proceed.
Purchase the Domain Name: After selecting your name, you'll be shown the estimated registration and gas fees. Sign the transactions to request registration and wait for confirmation.
Complete Registration and Set Resolver: Once your transaction is confirmed, finalize the registration to secure your ENS domain. Then, set the resolver so that dApps can recognize your ENS name in place of your wallet address.

Through these steps, ENS significantly simplifies the Ethereum experience, especially for those new to cryptocurrency, and reduces the likelihood of errors in transactions.

What is the ENS token

The ENS token, a crucial element within the Ethereum Name Service ecosystem, made a significant impact upon its launch on November 8, 2021. This token was introduced as part of a strategic move to enhance community involvement in the governance of the ENS protocol. In an unprecedented move, the ENS token was airdropped to individuals who owned an ENS domain name (.eth address) prior to October 31, 2021. The eligibility for receiving these tokens was determined by a formula considering several historical factors of the wallet address, such as the age of the .eth address (older registrations received more ENS tokens) and whether the owner had set a primary ENS (previously known as Reverse Record, which links Ethereum addresses to ENS names), with the latter receiving a 2x multiplier.

The ENS token serves dual purposes: it acts both as a utility and a governance token within the ENS ecosystem. This ERC-20 token is instrumental in allowing token holders to submit proposals and vote on decisions affecting the future direction of the ENS protocol. The idea behind this is to leverage the decentralized and community-driven nature of blockchain technology, shifting the governance from a traditional hierarchical model to a more democratic, decentralized autonomous organization (DAO) structure.

At its launch, the token traded at US$51.08 and ranked as the 110th largest cryptocurrency by market capitalization, which stood at US$1.1 billion. The total supply of ENS tokens is capped at 100 million, with a circulating supply of 19.6 million at the time of the report. The distribution of these tokens was strategically planned: 25% were airdropped to .eth holders (with a claim period after which unclaimed tokens were moved to the DAO treasury), another 25% were allocated to ENS contributors (subject to a four-year lock-up and vesting schedule), and the remaining 50% was reserved for the ENS DAO community treasury. Of this DAO allocation, 10% was made available at launch, while the rest was locked for four years.

This innovative approach to token distribution and governance reflects the evolving dynamics of the cryptocurrency world, where community engagement and decentralized decision-making are becoming increasingly pivotal.

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