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Speculators Jump On New Gold Rush Called Ethereum Name Service

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Adoption

Ethereum Name Service (ENS) launched on mainnet on May 4, 2017. At launch, ENS featured an automated registrar process allowing anyone to easily and cheaply register names ending in ".eth" using an auction process.

The auction system enabled anyone to purchase a .eth addresses of at least seven characters in length. Since its launch over 618,000 auctions have been started, and 3,298,707 ETH have been deposited for bids. The ENS is evolving, and within the next two years, a planned upgrade will allow for auctions of shorter names less than seven characters.

What exactly is ENS?

The Ethereum Name Service brings readable Ether addresses to the public. This is a key step towards cryptocurrency mass adoption. Normal Ether addresses are 42 digits long and can be very confusing for beginners. ENS enables anyone to create a much more user friendly address like for example JohnDoe.eth.

ENS domains as an asset

Since many Ethereum names are being purchased at ENS auction, new owners of .eth names have been seeking efficient tools enabling them to transfer ownership of their newly acquired .eth names to second hand purchasers.

As some Ethereum names are very valuable, an escrow service for transfer of title to these names has been important, but no such service has existed. Buyers and sellers seeking to transfer ownership have been required to rely on trust, custom smart contracts, or legal contracts provided by attorneys.  

Over the past six months since the launch of the ENS, individual .eth names have auctioned for astronomical sums. Some of the more expensive .eth names have included exchange.eth claimed for 6,660 ETH ($609,000), foundation.eth went for 300 ETH ($27,000), and weather.eth was auctioned for 101 ETH ($9,000).

Many of the .eth address purchases are made with the intent to resell or squat the name in order to seek profit from its resale at a much higher price to subsequent purchasers in what many speculators anticipate will be a thriving second hand market for .eth addresses. Furthermore, there’s been some criticism raised that the ENS system in its current form encourages .eth address name squatting.

In any event, there has been no shortage in speculators seeking to profit from what many see as a modern version of the pets.com domain name controversy from the early 2000’s during the initial Internet bubble boom.

First ENS domain marketplaces

Name Bazaar, the first public ENS marketplace, recently launched its service. This platform provides an alternative way to transfer ownership of .eth addresses, enabling Ethereum address holders to easily transfer ownership of Ethereum names using a completely trustless smart contract based interface.

This allows for a much more streamlined way for .eth address buyers and sellers to decrease transaction costs involved in the sale and transfer of ownership of .eth addresses. All that’s required to transfer ownership is an Ethereum address through the MetaMask or Parity browser extensions.

Alternatively, ENS domains can also be traded at the /r/ENSMarket subreddit. At the time of writing, it has over 300 subscribers and several hundred posts of people aiming to sell ENS domains.

Currently there are over 2900 DNS domain registrars all around the globe, which is the protocol for standard web addresses we use in our daily life.

As the Ethereum adoption rate keeps increasing, there’ll soon probably also exist a much greater pool of ENS domain registrars.

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