What Is Ethereum Name Service (ENS)?

Usability Challenges and the Birth of ENS

While blockchain technology provides a decentralized and secure trading environment, its complex address structure poses a significant challenge to user experience. For both novice cryptocurrency users and experienced investors, dealing with lengthy and difficult-to-remember hexadecimal wallet addresses when transferring Ethereum (ETH) or Bitcoin (BTC) is almost inevitable. These strings composed of numbers and letters are logically clear to computers but extremely unfriendly to human memory, greatly hindering the large-scale adoption and application of blockchain technology.

To address this key issue, the Ethereum Name Service (ENS) was born. ENS proposes an innovative solution that allows users to create concise, easily recognizable, and memorable addresses similar to traditional internet domain names, greatly improving the usability and accessibility of the blockchain ecosystem. This enables ordinary people to more conveniently participate in various interaction operations on the Ethereum network.

ENS: Simplified Address and Information Identification on Ethereum

The Ethereum Name Service (ENS) is an innovative project built on the Ethereum blockchain, aiming to provide users with a more understandable and user-friendly alternative to Ethereum addresses. Initiated by Alex van de Sande and Nick Johnson of the Ethereum Foundation on May 4, 2017, its core function is to convert complex and difficult-to-remember Ethereum public addresses into text formats that are easily recognizable for humans, mapping hexadecimal number strings into short and meaningful names.

The functionality of ENS goes beyond this, as it also enables identification of common elements in the cryptocurrency world, such as transaction IDs, hashes, and metadata, significantly improving usability and readability across the entire ecosystem. Analogous to the Internet Domain Name System (DNS), ENS serves as a "phone book" within the Ethereum network, where DNS associates complex IP addresses with easily comprehensible URLs like "<https://www.google.com>", while ENS transforms difficult-to-remember Ethereum addresses into user-friendly formats.

Moreover, ENS has taken crucial steps towards transitioning into a decentralized autonomous organization (DAO), introducing governance tokens that allow community members to participate in decision-making processes regarding ENS development. As token value has seen significant growth, ENS has quickly become a strong trend, attracting attention from numerous blockchain enthusiasts and investors. These initiatives not only demonstrate ENS's commitment to optimizing user experience but also pave new possibilities for the future development of Ethereum and the broader blockchain industry.

How ENS Works and Domain Management

ENS efficiently manages and trades blockchain addresses by cleverly utilizing ERC-721 non-fungible token (NFT) technology. Each ENS domain actually represents a unique NFT, holding which means owning the corresponding domain rights. This means that users can trade domains as flexibly as they would with any other NFT asset.

In the ENS system, top-level domains such as .eth are controlled by smart contracts called registrars, which manage the process of creating subdomains. For example, if you want to obtain the "LBank.eth" domain, you need to interact with the .eth registrar smart contract following the relevant rules and procedures to obtain the right to use the domain.

The process of buying an ENS domain includes checking its availability, and domains are typically rented on an annual basis. It's worth noting that for popular and sought-after domains, ENS uses an auction mechanism to determine final ownership, with the highest bidder winning ownership and usage rights to the domain. Once you own a domain, such as "LBank.eth," you can freely associate it with an Ethereum wallet address and further create second-level subdomains like "trade.LBank.eth." Additionally, as a domain owner, you can choose to lend or sell the domain on the market to other users in demand.

Functionality and Use Cases of ENS

The Ethereum Name Service (ENS) enables users to convert complex and difficult-to-remember cryptocurrency addresses into simple, understandable words, greatly simplifying the transaction process. For example, you can set an ENS domain like "mywallet.eth" to replace a lengthy numeric address, similar to setting a nickname for a friend in your phone contacts. This way, when making a transfer, you only need to input this short and meaningful name, improving operational efficiency while reducing the likelihood of errors.

Moreover, ownership of ENS domains is not limited to mapping wallet addresses. They can also be directly associated with smart contracts, transaction records, or any metadata information. This means that by creating subdomains (such as files.mywebsite.eth), you can point them to specific files or resources stored on the blockchain, or to a particular decentralized application (DApp) entry. This flexible application method makes ENS a crucial infrastructure within the blockchain ecosystem, providing users with an intuitive and powerful addressing and identification system.

How to Easily Obtain an ENS Domain

The process of acquiring a custom domain on the Ethereum Name Service (ENS) has become quite straightforward. With just a few simple steps, you can have your own personalized blockchain domain:

1. Domain Search & Wallet Connection: First, visit the official ENS application (<https://app.ens.domains/>), and connect your Ethereum wallet (such as MetaMask). Then, in the search bar, enter the desired domain name, for example, "LBank."

2. Check Availability & Set Registration Information: The system will display whether the selected domain is available. If it is, you'll see relevant information about registering the domain, including the available registration periods and estimated fees.

3. Pay and Complete Registration: After confirming the registration details, make the payment through your wallet, ensuring it contains enough ETH to cover the registration fee. Follow the instructions on the website to complete the three steps and submit your registration request.

For early or particularly short and popular domains (e.g., names with 6, 5, 4, or 3 letters), ENS uses the Vickrey auction mechanism for allocation. The auction lasts for five days, consisting of three days of blind bidding and two days of public bidding. Participants submit their highest bid during the initial stages of the auction and freeze the corresponding amount of ETH. During the public phase, all bidders must reveal their bids, and the winning bidder will be determined by the second-highest valid bid. The remaining participants' bids are unfrozen and returned to their respective accounts.

As a result, obtaining an ENS domain has become a transparent and fair process, offering users a more convenient way to identify themselves and manage assets within the Ethereum network.

Cost Structure of ENS Domains

In the Ethereum Name Service (ENS), the total cost of acquiring a domain includes auction fees and annual maintenance fees.

Auction Costs: The price of an ENS domain varies based on its scarcity and market demand. Popular words, short character domains (such as single or two-letter domains) are typically valuable in auctions, with names like "God," "Car," or "ETH" potentially fetching high prices. The specific price depends on the auction results; the more competitive the bidding, the higher the domain's selling price.

Rental Costs: Once you successfully acquire an ENS domain, you need to pay an annual renewal fee to maintain ownership of the domain. This fee is paid in ETH and converted to USD based on the real-time exchange rate provided by the Chainlink ETH/USD oracle. For domains with 5 characters or more, the annual renewal fee is fixed at $5; as the number of characters decreases, the renewal fee increases correspondingly. This means that holding shorter, more valuable domains will result in relatively higher annual maintenance costs.

How to Participate in the ENS Token Airdrop and Claim Process

Users who held an .eth address as of October 31, 2021, have the opportunity to apply for and claim their share of the ENS token airdrop through simple steps. Here is a detailed guide on how to claim your tokens:

1. Start the claiming process: Visit the ENS airdrop page and connect your Ethereum wallet (such as MetaMask or WalletConnect) to the page using the [Associate] or [Associate Wallet] feature.

2. Select wallet and verify identity: Choose your preferred wallet service provider and authorize/confirm your identity by clicking on the respective option.

3. Begin the claiming process: After associating your wallet, click the [Start] button to initiate the official claiming process.

4. View eligible amount: The system will display the number of $ENS tokens you are entitled to receive based on your .eth address holding during the snapshot period.

5. Read terms and sign: Carefully read the information about the $ENS token and the Charter, and digitally sign these terms through your wallet to indicate agreement.

6. Delegate voting rights: At this stage, you can choose whether to delegate voting rights of the claimed tokens to yourself or other participants.

7. Final confirmation and gas fee payment: Check that the claimed token amounts and authorization settings are correct, then click the [Apply] button to submit your application. To complete the entire process, you need to pay a certain amount of Ethereum network transaction fuel fees (Gas Fee) to facilitate the execution of smart contract token distribution.

Please note that unclaimed $ENS tokens will be burned after May 4, 2022. Therefore, eligible users should timely follow the above steps to claim their rightful share of ENS tokens.

Differences and Similarities between ENS and Traditional Internet Domain Systems

ENS (Ethereum Name Service) shares similarities with the traditional internet domain system we are familiar with, such as DNS, in core functions but also exhibits significant differences due to the introduction of blockchain technology.

Similarities:

1. Memorability: Like how DNS converts complex IP addresses into easily memorable website URLs (e.g., www.example.com), ENS also allows users to replace lengthy and difficult-to-remember Ethereum addresses with short and meaningful domain names (e.g., mywallet.eth).

2. Hierarchical structure: ENS employs a hierarchical naming system similar to that of DNS, supporting second-level, third-level, or even more subdomains like subdomain.example.eth.

Differences:

1. Decentralization: Built on top of the Ethereum blockchain, ENS is a decentralized service that doesn't require a central authority for management. In contrast, DNS relies on top-level domains controlled and distributed by central institutions like ICANN.

2. Proof of ownership: ENS domain ownership is verified through ERC-721 non-fungible tokens (NFTs) stored on Ethereum smart contracts, ensuring the security and immutability of the domain. In traditional DNS, domain ownership is recorded in registrar databases and can be bought, sold, or transferred through domain registrars.

3. Application scope: ENS not only simplifies wallet addresses but can also directly link to smart contracts, content addressing, or other metadata, while DNS primarily serves to locate website or mail servers.

4. Trading mechanism: Acquiring and transferring ENS domains typically involves public auctions or market trading, with prices fluctuating based on market demand. In traditional DNS, domain registration mainly follows the "first-come, first-served" principle, with relatively fixed fees.

Conclusion

In conclusion, the Ethereum Name Service (ENS) is an innovative solution born out of the challenge of blockchain technology usability. It aims to address the issue of traditional cryptocurrency addresses being difficult to remember and inconvenient to use. By providing a concise address format similar to that of the Internet domain system, ENS greatly improves the user experience, promoting the popularization and deepening application of the Ethereum ecosystem. As ENS continues to expand and improve its functions, such as introducing DAO governance mechanisms and issuing tokens, it not only creates a more convenient trading environment for users but also further promotes frontier exploration and development in decentralized autonomy and community participation in decision-making in the blockchain industry. In the future, ENS will continue to play a crucial role in simplifying blockchain interactions, strengthening information labeling, and promoting accessibility and usability across the entire industry.