Ethereum Name Service

About Ethereum Name Service

The Ethereum Name Service (ENS) offers a secure and decentralized way to address resources on the Ethereum blockchain using human-readable names. Just as DNS (Domain Name System) translates IP addresses into website URLs on the internet, ENS translates cryptographic addresses into unique names ending with .eth.

How ENS Works

ENS operates on the Ethereum blockchain, taking advantage of its security and decentralization. ENS names are non-fungible tokens (NFTs) registered under the ENS smart contract. The owner of an ENS name can point it to any resource on the blockchain like a cryptocurrency wallet, decentralized website, or other decentralized apps.

The ENS registry is a hierachical system similar to DNS names. Names can be registered directly under the .eth TLD or under a more specific namespace like myname.xyz.eth. Ownership of names is established through auctions or first-come first-serve allocation.

Registering an ENS Name

To register an ENS name, users first check availability on the ENS manager. If the desired name is available, users then bid on it using the native ETH cryptocurrency. Bids take the form of blind auctions lasting up to 3 days. If a user wins, they pay their bid and get full control and ownership of the ENS name.

Names obtained this way last indefinitely and can be renewed, transferred or sold on secondary markets. Registration fees deter name squatting and ensure availability of quality namespace.

Setting up an ENS Name

Once an ENS name is secured, users can configure it to point to a resource. The most common use case is mapping it to an Ethereum wallet address. This allows others to send funds using the simple ENS name rather than the long hexadecimal wallet address.

Some other resources ENS names can point to are decentralized website URLs, IPFS content hashes, other wallet addresses and metadata like email and social media profiles. ENS names can also point to other ENS names, enabling simple vanity URLs.

The Concept of ENS Coin

ENS has its own native utility token called ENS Coin. ENS Coin allows holders to register names at reduced rates and receive a portion of the registration fees. The coin was airdropped to early adopters of ENS names.

ENS Coin aims to incentivize adoption by delegating governance abilities. Coins can be staked on registered domains to receive voting power for electing the ENS DAO. Higher stakes equal more voting influence over the ENS ecosystem.

At the core of ENS’s distribution strategy is a fixed total supply of 100 million tokens, with a current circulating supply slightly exceeding 20 million. The allocation of ENS tokens is meticulously structured to ensure a balanced distribution that supports the ecosystem’s growth and sustainability:

• The DAO Community Treasury, which is allocated 50% of the total supply, introduces a gradual release of funds through a linear vesting period over four years, beginning with an initial 10% at launch. This strategic reserve is designed to support the long-term development and governance of the ENS protocol.
• A generous airdrop, constituting 25% of the total supply, is specifically designated for .ETH domain holders, rewarding early adopters and stakeholders within the ecosystem.
• The contributors’ share, also making up 25% of the total supply, is distributed among various groups who have played a critical role in the development and enhancement of the ENS ecosystem. This includes:
• Core Contributors, who receive 18.96% for their foundational work in developing the ENS infrastructure.
• Select Integrations, awarded 2.5% for integrating ENS into broader systems and platforms.
• Future Contributors, allocated 1.25%, representing a commitment to ongoing development and innovation.
• External Contributors and Launch Advisors, receiving 1.29% and 0.58% respectively, acknowledging their valuable external advice and support.
• A recognition of community engagement and support is evidenced by allocations to Keyholders, Active Discord Users, and Translators, who collectively receive 0.4%, highlighting the importance of community in the ENS ecosystem.

This distribution model underscores the Ethereum Name Service’s commitment to a decentralized and participatory governance structure, recognizing the diverse contributions that have fueled the protocol’s success. By empowering stakeholders through the ENS token, the project not only facilitates a more inclusive decision-making process but also fosters a sense of ownership and community among its participants.

Benefits of Using ENS

ENS offers several advantages over traditional addressing of blockchain resources:

• Simplifies use – ENS names are easier to read, remember and share than long hex addresses. This improves user experience.
• Security – ENS names can act as a layer of abstraction to avoid exposing sensitive wallet addresses publicly.
• Human readable – ENS names enable identifiable web3 profiles, decentralized websites and blockchain identities.
• Interoperability – ENS works across multiple blockchains, wallets, browsers and apps enabling portable identities.
• Decentralization – ENS has no central authority. Registrations are on-chain and censorship resistant.

ENS Use Cases

Here are some common use cases taking advantage of ENS capabilities:

• Receive payments and donations via an ENS name rather than wallet address.
• Replace IP addresses with ENS names to browse decentralized websites and access web3 content.
• Map ENS names to IPFS hashes to render censorship resistant websites and archives.
• Use ENS names as blockchain usernames to manage digital identity and sign blockchain transactions.
• Create decentralized autonomous organizations with voting rights tied to ENS domains.

ENS Marketplace

ENS names are NFTs that can be freely traded on open marketplaces. Popular platforms that allow buying and selling ENS names include OpenSea, LooksRare and Rarible.

Since names are scarce assets registered on a blockchain, they can command high premiums based on length, dictionaries, attributes and other demand factors. Speculators often buy names that represent brands, famous people and generic words hoping to sell them for profit.

ENS Security

ENS builds security in the following ways:

• All registration transactions occur on the tamper-proof Ethereum blockchain.
• Information is decentralized across Ethereum nodes. There is no central server or point of failure.
• Mapping resources to ENS names acts as an abstraction layer for wallets and IP addresses.
• Users have full ownership of their ENS names and can securely transfer them if needed.
• The smart contract code governing ENS is open source and has been formally verified.

Overall, ENS offers an important security upgrade over traditional DNS in the web2 world. As adoption grows, it promises to be a core standard for addressing identity and content in the decentralized web3 economy.