Welcome to our Crypto Insider for March 30th, 2022 – FREE Edition.
By popular demand, we’re bringing you the smartest insight, analysis, and investing tips for all things Crypto.
Today, we’re taking a look at the Ethereum Name Service (or the thing that makes sending crypto a hell of a lot easier). Keep reading if you want to learn about its origin & purpose, the $ENS token, and more.
Table of Contents
Ethereum Name Service
While it’s not too difficult, it tends to be a little scary (especially for new users).
Some addresses that contain 40 hexadecimal digits and are more or less jibber-jabber to us, normal humans. Unless, of course, you’re one of the very gifted who can make sense of 0xb794f5ea0ba39494ce839613fffba74279579268.
Fortunately, the Ethereum Name Service (ENS) makes sending crypto on the Ethereum network infinitely easier.
Rather than inputting a huge-a*s string of random letters and numbers, with ENS you can just input something like yourname.eth. For example, I might have colinma.eth.
Assuming I did set up colinma.eth to be connected to 0xb794f5ea0ba39494ce839613fffba74279579268, you’d be able to send $ETH to colinma.eth and the $ETH you send will actually go to the correct wallet address, which in this case is 0xb794f5ea0ba39494ce839613fffba74279579268.
While ENS has its own token ($ENS), today’s issue will focus on the utility of ENS, rather than the price action and recommendation of $ENS. (However, if you’re only interested in the token, you can just scroll down to the corresponding section.)
ENS vs. Domain Name Server (DNS)
If you’ve ever owned a website or domain name, you might be familiar with DNS. DNS came way before ENS. In fact, it even helped inspire ENS.
However, they are not the same thing.
DNS has to do with Internet Protocol and helps turn human-readable domain names (such as alts.co) into an IP address, such as 22.214.171.124. So rather than typing in an IP address like 126.96.36.199, you can just type in the website name that will direct you to its IP address.
As you can see, there are similarities. Both of them allow us to input a name/address that we, humans, can actually remember, and transform that name/address into the right location so that we don’t have to remember or interact with a nonsensical set of numbers or letters.
The Rise of ENS
The rise of ENS is no accident – it’s a name service to help resolve addresses for the most popular network in cryptocurrency, Ethereum. In fact, as both cryptocurrency and Ethereum get more popular, so too will the number of ENS addresses.
As the masses enter cryptocurrency, dealing with addresses like 0xb794f5ea0ba39494ce839613fffba74279579268 becomes even more undesirable. Newbies gravitate to user-friendly stuff. And having an ENS name takes down another barrier of entry for those not-so-familiar with cryptocurrency.
From a business POV, having actually readable addresses is a great way of boosting the adoption and is good for cryptocurrency.
In fact, ENS is not the only service of its kind on the blockchain. There is an equivalent name server for another network, Solana ($SOL), called the Solana Name Service (SNS), where you can buy .sol addresses for your Solana wallet.
Having an ENS has gained huge traction, and people already long on $ETH have their own Ethereum address. Ethereum network founder, Vitalik Buterin, isn’t an exception.
Twitter plays a big part in cryptocurrency because that’s where most cryptocurrency influencers hang out and where a large amount of cryptocurrency research is done.
In fact, ENS is so popular that there are community Twitter accounts that track of certain ENS domains. For example, ENS Registry is a Twitter account that tweets about recently registered ENS domains. ENS Expirations tweets about ENS domains that are about to expire so that ENS domain flippers can hope to acquire some juicy new .eth domains. And last but not least, ENS Marketplace connects buyers and sellers of .eth domains without any fees.
And while having a strong community does not necessarily guarantee success, it certainly is a key ingredient to a successful cryptocurrency project.
It’s also worth noting that some people are now trading ENS domains on Opensea. So if you find a domain name no one yet owns, you could try selling it on Opensea.
The $ENS token’s supply is limited and will end on 4 May 2022. So you can either pay the money to buy a domain name and get your free ENS token allocation, or you can invest in the tokens. As Investorplace.com puts it, this is essentially an ongoing “airdrop” for ENS domain holders, where they can retain some value in the ENS crypto token, offsetting the cost of setting up and maintaining their Etheruem Name Service domain.
The token will also be used in governing protocol parameters. As you know, ENS is a fully decentralized, open-source protocol, which makes it community-governed as a DAO. Here comes the ENS token’s special purpose – ENS DAO is basically governed by its ENS token. Meaning it’s used to submit proposals and cast votes to influence the protocol’s future development. Anyone holding ENS can cast their votes for proposals on the ENS DAO.
Unfortunately, $ENS launched during the bull run in November of 2021. $ENS is $18.70 at the time of writing this issue, which is less than 25% of its all-time high of $81.69, according to CoinMarketCap:
MIT researchers did estimate that DNS was worth around $8 billion last year. With the rise of cryptocurrency, $ETH, and the strong association with owned .eth domains, it’s reasonable to believe that $ENS’s market cap could be 15% of DNS’, or about $1.2 billion, in the future. That being said, the value of the ENS crypto token won’t be fully clear until after the May 2022 cutoff point.
Our View on $ENS
Buying $ENS Tokens
If you wanted to buy some $ENS, we’ve got you. While there are other exchanges that you can buy the token from, below are ones we can recommend and trust in good faith: