ENS craze in bear market: registration volume and transaction volume within the week

Ethereum Name Service (ENS) registrations have surged over the past week, with data showing 108,000 ENS domains registered in the past seven days. Data released by ENS lead developer Nick Johnson shows that this 216% increase has led to a significant increase in revenue. On Sunday, ENS earned $684,000, an increase of $500,000 from the day before.

ENS craze in a cold bear market

Ethereum Name Service (ENS) is a decentralized domain name protocol on Ethereum. ENS manages the issuance and renewal of .eth domain names, which are built on Ethereum, sold as NFTs, and can be linked to a person's cryptocurrency wallet.

According to data analyzed by Nick Johnson, a developer of Ethereum Domain Service (ENS), ENS registered more than 100,000 domains last week, including 11,042 on July 2, 29,727 on July 3, and 34,000 on July 4. Historical data shows that ENS registered 365,652 domains in May this year, with revenue of 3899.7 ETH, both of which set records; in June this year, 122,000 new ".eth" domains were registered, generating revenue of 2,500 ETH. According to the latest data from NFTGo.io, the current total transaction volume of ENS has reached 94.99 million US dollars, with a market value of approximately 67.55 million US dollars.

What is the reason for the surge?

Daily ENS registrations have recently surged, reaching over 30,000 new addresses on July 4. Analysts say this surge may be due to the purchase of ENS address 000.eth for a record-breaking 300 ETH.

On July 4, the "000.eth" ENS domain name was sold at a price of 300 ETH, setting a record for the second highest ENS domain name transaction price in history. Before this transaction, the ENS domain name market had been agitated for several days. On July 3, the transaction volume of ENS domain names exceeded 3.26 million US dollars, setting a record for the highest transaction volume in nearly a month, topping the NFT market transaction volume ranking. Judging from the transaction records, the domain names with 3 to 5 digits are mostly popular in the market recently. As the number of registrations soared, the transaction volume of ENS in the past 7 days increased by 496.97%.

The Ethereum Name Service (ENS) works similarly to the Internet's DNS system, helping users find websites by name rather than number. ENS is not designed to replace DNS, but to work alongside it. But it provides a secure and decentralized way to manage website domains and send ETH and ERC20 tokens. Ethereum domains were first introduced to Web 3 in 2017. ENS DAO celebrates its fifth anniversary on May 4, 2022.

Like domain names on Web 2, ownership of a ".eth" domain name depends on regular payments of fees denominated in US dollars after the initial registration. Some analysts believe that the outbreak of ENS domain names when the crypto asset market is quiet may be related to the low gas fees of the Ethereum network. According to OKEx data on July 4, the current gas fee price is 13Gwei, which is lower than 94.52% of the time in history, making domain name creation and transaction costs cheaper. There are 1.4 million active domain names on ENS. Updating domain names will also incur gas fees, and due to the low gas fees, a large number of new registrations may be generated. From July 2 to July 3, 2022, gas fees ranged from US$1.673 to US$1.971, reaching the lowest level in at least a year.

The utility of ENS

In the early days of the web, to visit a website you typed in an IP address, a string of numbers that was hard to remember and nearly impossible to guess. Then human-readable names came along, making it easier for real people to browse the World Wide Web. That shift turned 104.26.3.128 into Decrypt.co!

Cryptocurrency is still in the IP address stage: users need long, hard-to-remember addresses to access the pages they want. That’s where the Ethereum Name Service comes in. It wants to make using cryptocurrency as easy as surfing the Internet.

Ethereum Name Service (ENS) is a lookup system. It links information to names. It's not just a naming service for Ethereum; it's a name service built on Ethereum. It provides a secure and decentralized way to address resources using human-readable names. It is a fully distributed domain name provider that allows anyone to buy and manage domain names. This means you can send ETH or ERC20 tokens to "realsatoshi.eth" instead of "8e866f012fb8fb..."

ENS DAO Organization

Nick Johnson and Alex Van de Sande of the Ethereum Foundation led the initial development of ENS. In November 2021, the project airdropped ENS tokens to users of the service and established a decentralized autonomous organization, or DAO, to govern it. (The legal entity associated with the DAO is True Names Limited.) ENS token holders can use their assets like shareholders in a company; they can make decisions on pricing, protocol changes, and how to manage funds in the treasury.

The introduction of the ENS token has the added benefit of shifting the project’s funding model from grants. ENS tokens are traded on crypto exchanges for USD and other cryptocurrencies, providing a financial lifeline for project developers.

Features of ENS

ENS is built on Ethereum's smart contracts, making it more secure, private, and censorship-resistant than the Internet's Domain Name Service (DNS). The team behind ENS sees the Internet naming infrastructure as a fundamental component and should therefore be open, decentralized, community-driven, and non-profit. On a technical level, ENS can leverage the existing Ethereum ecosystem, meaning it is highly programmable and can interact with other smart contracts beyond naming.

Under the hood, ENS is basically two smart contracts. The ENS registry records all domains and subdomains, along with details of the owner and a link to a resolver, another smart contract that handles the translation from names to addresses or other types of resources, and vice versa.

ENS operates similarly to the Internet's DNS in that it has a hierarchical system that allows domain owners to have full control over any subdomain. So realsatoshi.eth can create wallet.realsatoshi.eth and email.realsatoshi.eth.

How to register and adopt

Using an Ethereum wallet such as MetaMask, you can visit manager.ens.domains to search for available domains. Once you have found your domain, you will be walked through the registration process, which will require you to confirm two transactions in your wallet. You will also have to choose how many years you want to register the domain for a $5.00 per year rental fee (paid in ETH). Now, as the owner of this domain, you can set up different addresses or information that you would like this name, as well as any subdomains, to be linked to.

The best thing to do with ENS is to replace your long, unreadable Ethereum address with a friendly, memorable ENS address (e.g. realsatoshi.eth). This makes it easier to receive crypto assets as well as input your ENS address into Ethereum dapps without having to copy and paste long public addresses.

Beyond that, the decentralized web is being built on a partnership between ENS and the file storage system IPFS. A good starting point is almonit.eth, where you can search a directory of decentralized websites. You can visit the site with MetaMask enabled, or thanks to their work on bridging Web3 and the internet DNS, you can add .link to decentralized websites and visit them without MetaMask or a special browser.

ENS is more than just .eth. In 2021, ENS allows websites with any of the 1,300+ top-level domains (such as those ending in .com, .org, or .edu) to integrate directly with ENS. So if you own realsatoshi.org, you can link it directly to realsatoshi.eth so that visitors can view the content and send money to the exact same place.