The Ethereum Name Service (ENS) is a naming service for wallet addresses, hashes, and other machine-readable identifiers. It turns difficult to read strings of data into easily readable addresses. It works similarly to the Domain Name System (DNS) used for websites.
Initially, ENS auctioned popular six, five, four, and three-letter domain names to interested users using the Vickrey auction format. Each name has .eth at its end and can be attached to multiple cryptocurrency addresses, hashes, and other information.
You can now easily purchase names without an auction and rent them by the year. Prices are dependent on the length of the name you want to rent. Also, if you owned an ENS domain on October 31, 2021, you were entitled to an airdrop of $ENS governance tokens. The airdrop collection period was open until May 04, 2022.
One of blockchain's biggest challenges is improving its ease of use and accessibility. If we look at payments using Ethereum (ETH) or Bitcoin (BTC), new and even experienced users can find long wallet addresses impractical and confusing. Hexadecimal strings of numbers are simple for a computer to read but less intuitive for human users. The Ethereum Name Service (ENS) combats the problem by allowing anyone to create simple website-style addresses that are easier to remember and use.
What is the Ethereum Name Service?
The Ethereum Name Service (ENS) is an Ethereum-based project launched on May 4, 2017, by Alex Van de Sande and Nick Johnson from the Ethereum Foundation. The project allows users to display long Ethereum public addresses in a simplified text-based way. This makes it easier to share, use, and remember addresses and other data. Turning machine-readable numbers like 0xAb5801a7D398351b8bE11C439e05C5B3259aeC9B into human-readable alternatives is an important part of improving blockchain adoption.
ENS isn't just limited to wallet addresses, either. It can be used to represent transactions IDs, hashes, and metadata, all commonly found in the cryptocurrency world. You might already be familiar with the Domain Name System (DNS), a naming system that acts like the internet's phonebook. DNS takes hard-to-remember IP addresses and attaches them to an easy-to-use URL like https://academy.binance.com. In effect, ENS is the DNS of the Ethereum blockchain.
ENS has since launched a governance token as part of its transition to a decentralized autonomous organization (DAO). Due to a large rise in the token's price, the project has started trending and generated a lot of interest.
How does Ethereum Name Service work?
An ENS domain name uses ERC-721 Non-Fungible Tokens (NFTs) to represent a unique address. You can trade a domain by transferring or selling the NFT to someone else. Wallet addresses and other information are attached to each token, which is manageable by the owner. A top-level domain like .eth is owned by a smart contract called a registrar that controls the creation of subdomains. If you wanted to create BinanceAcademy.eth, you would need to interact with the .eth registrar.
To purchase an Ethereum domain name, you can check its availability and rent it yearly. Popular names were, however, initially auctioned off. The highest bidder who won the domain could then attach addresses, create sub-domains, and loan or sell their domain name. For example, if you owned BinanceAcademy.eth, you could also create learn.BinanceAcademy.eth for free.
What can you do with ENS?
If you've ever got confused with multiple addresses when sending cryptocurrencies, you'll understand the need for ENS. Like you would save a friend's phone number under their name, ENS lets users turn long numbers into easy-to-remember words. This creates a more straightforward experience with less chance for errors.
An ENS domain owner can also create subdomains that they can then assign other data to. It doesn't always have to be a wallet address, either. You could use it to direct to a smart contract, transaction, or metadata.
How to get your own ENS domain?
Nowadays, getting an ENS name is as simple as checking its availability on https://app.ens.domains/ and registering it. Let's take a look at an example of how to begin the process. First, head to https://app.ens.domains/, connect your wallet and type in the domain you're interested in.
You'll now see the availability of your chosen name. In our case, BinanceAcademy can be registered.
Once you click on the name, you'll see instructions on registering the ENS domain. You can choose your registration period and also see an estimate of the fees. With ether (ETH) in your wallet, you can follow the three steps shown and request to register the address.
In ENS's early days, popular six, five, four, and three-letter names were auctioned off in Vickrey-style auctions. A smart contract ran the whole process over five days. Anyone could participate in a public auction and attempt to purchase the same domain name. Each interested party would send a transaction containing their maximum bid in the open auction's first three days.
The auction would then enter the reveal phase. Everyone would reveal their bid or lose their locked-up ETH, and the winning bidder would pay an amount equal to the second-largest bid. All revealed bids would then receive a refund.
How much does it cost to get an ENS domain?
There are two possible parts to the cost of an ENS domain: auction costs and rental costs. The price of an ENS domain name in an auction was dependent on the popularity of the name. Recognizable names like God, Car, or ETH, fetched higher prices, and short, three-letter words were typically the most expensive. You can see examples below of some of the prices paid for domain names.
Once you own an ENS domain, you'll need to pay a yearly renewal cost payable in ETH. Fees are denoted in dollars but converted using an exchange rate given by the Chainlink ETH/USD oracle. The annual renewal cost is $5 per year for names with five characters or more but becomes more expensive the fewer letters you have.
How to claim Ethereum Name Service airdrop?
Anyone with a .eth address during a snapshot on October 31, 2021, was eligible to receive $ENS tokens. You could have claimed them in a few simple steps until May 04, 2022, after which unclaimed tokens were burned. Let's go through the steps so you will get an idea of the process of claiming airdrop tokens.
1. First, head to ENS Airdrop and connect your wallet with the [Connect] or [Connect wallet] button.
2. Choose the wallet you want to connect with, such as MetaMask, WalletConnect or another provider.
3. Click [Get started] to continue.
4. You'll now see the option to [Start your claim process] along with the amount that you're eligible to receive.
5. Make sure to read the educational information regarding $ENS, followed by the Constitution, which you will need to sign using your wallet.
6. Now, you can choose to delegate your tokens' voting power to yourself or another user.
7. Finally, check the amount you are claiming and your delegate before clicking [Claim] and paying a gas fee to unlock your tokens.
In the world of decentralized networks, ENS is a step forward to creating easily accessible ways of interacting with a blockchain. Just like we no longer use IP addresses to navigate the web, we may see an increase in ENS names due to its usefulness and increasing popularity. Since its airdrop, there has also been a rise in interest from the cryptocurrency ecosystem in the project.