Ethereum Name Service and ENS token explained

Ethereum Name Service explained

Ethereum Name Service (ENS) is a protocol that shortens crypto addresses into a human-readable form. A crypto address such as “GhUYSHnSKF87nsb278OHGYNSPWEDQ1” is difficult to remember. With ENS employed, the address can be shortened to Adam.eth.

ENS is similar to how the Domain Name System (DNS) works. DNS helps users visit websites over the internet using short and simple domain names, such as aax.com and facebook.com.

Similar to getting a domain name of your choice, ENS also allows you to choose your own unique name. Once you secure the name, it will no longer be available to others. Your ownership of the name can also expire and renewal is necessary before another user takes it.

Image: ENS

Advantages of using ENS over DNS

Before we delve into the advantages, it should be noted that ENS was not created to replace DNS. As the concept of Web3 matures, more people are likely to use ENS more.

One of the clear advantages of ENS is that it is built on Ethereum. Simply, this means better security and privacy for users. It was mainly created for easier naming of Web3 resources such as blockchain addresses and distributed content within a decentralized environment.

In terms of adaptability, the architecture supports importing DNS names you own into ENS. These include DNS names such as .com, .org, .io, .app, .xyz, and .art.

Unlike a DNS, ENS domains are owned by smart contracts and are governed by a decentralized autonomous organization (DAO) instead of a centralized authority similar to ICANN.

Eth domain names are technically non-fungible tokens (NFTs), which means they can be sold, bought, and traded.

What can I do with ENS?

ENS has several utilities:

A web3 username

Own your username, store an avatar and other profile data, and use it across services.

One name for all of your crypto wallet addresses

One of the most grueling things about sending and receiving crypto is the very long string of characters that you have to copy and paste. This address string has been the cost of wrong transactions and even loss of funds.

With one simple ENS name, you can store all of your addresses and receive any cryptocurrency, token, or NFT.

Launch censorship-resistant, decentralized websites with ENS.

Once you own a name (e.g. adam.eth), you can create your own subdomains (e.g. blog.adam.eth).

For as low as $5 in ETH per year, you can own a 5+ character .eth name. It gets more expensive for shorter names because of the scarcity of available names with fewer characters. For example, a .eth name with 4 characters will cost $160 in ETH per year and those with 3 characters are sold for $640 per year.

After your name expires, there is a 90-day grace period in which the owner can’t edit the records but can still re-register the name. 

The ENS token explained

The ENS token is the native governance token of ENS. It is held for speculation purposes and for DAO governance.

Tokenomics of ENS

There are 100 million ENS tokens existing, 50% of which are in the DAO community treasury. 

Meanwhile, 25% was airdropped to .ETH holders, which constitute over 137,000 accounts. The remaining 25% is held by ENS contributors, which account for over 100 individuals and groups, and hundreds of Discord users.

ENS DAO

The ENS token’s most specific role is for governance. This means holders of the token can participate in how the project grows and progresses. 

Users can communicate or propose to the ENS community. A proposal will require the support of 100,000 tokens before it is considered for voting.

Later this year, the ENS community is set to vote on the ENS Constitution.

Where can I buy, sell, or trade ENS?

ENS is currently available for trading on AAX, Coinbase, Binance, KuCoin, Huobi, Gemini, Kraken, OKX, Crypto.com, MEXC, SushiSwap, Gemini, Bitmart, Uniswap, and many more.

It is usually paired with USDT, USD, EUR, BNB, and BUSD, among others.

As of writing, it is currently trading at $13.81 and has reached an all-time high of $85.69.

Tags

Choose a language