This project is based on Ethereum. The idea behind it is that users can turn addresses in Ethereum from machine codes into ordinary words understandable to humans. In simple words, it's a username generator, the main purpose of which is to make the blockchain easier to use.
Ethereum Name Service is not a separate blockchain. It is an add-on to the Ethereum network that allows the automatic creation of any simple and clear names that will replace complex addresses in the blockchain. Users will be able to exchange these names to simplify transactions. Here's a simple example:
A user goes to a cafe and wants to pay for his lunch with ETH tokens. To do that, he has to enter the cafe address, which consists of a code like 0xDB23423... When entering the code, he risks making a mistake even if he copies and pastes it. It is much easier to enter, for example, café.eth instead of such an address. This is exactly what the Ethereum Name Service is responsible for.
In addition to addresses, ENS helps to change domains of wallets, websites, hashes, and various metadata into more comprehensible and readable ones. Moreover, this approach allows using just one name for all addresses and websites of a user, which significantly simplifies the use of cryptocurrency and blockchain.
According to the project documentation, ENS is a distributed system, which is a very important point, because unlike the same DNS (Domain Name System), ENS is not centralized. This makes the system more secure.
ENS is built on two Ethereum smart contracts. The first one is the ENS registry. It records all the domains registered by ENS and stores three main types of data about each domain:
- The owner of the domain.
- The resolver for the domain.
- The caching time of all records related to the domain.
The second contract is just a resolver. It translates the domain names to machine-readable code and vice versa. It is the resolver that matches domains to the appropriate user, website or address.
For the users, there is a special ENS app, where all the transformations take place. Here, clients of the system find suitable free domain names. After choosing one of the available names, the user registers it by paying the yearly fee ($5 per year for a name longer than 5 characters).
Once such a name is created, the client of the app can link it to the wallet, websites, as well as multiple subdomains. All of them will work in a single Ethereum Name Service system.
Like the DNS system, there is competition for the most popular words in the Ethereum Name Service. A secondary market operates here, where one can buy a nickname that interests a user. For example, exchange.eth was once sold for 6,600 ETH, and weather.eth sold for 300 ETH. The system doesn’t just support .eth, but also the most popular DNS names including .com, .org, .io, .app, and more.
The popularity of Ethereum Name Service is due to:
- A higher level of security in relation to traditional DNS services, which is achieved through decentralization. This reduces the risks, for example, of domain blocking, which can be easily accomplished by DNS and cannot be accomplished by ENS;
- High demand for ETH tokens and services related to the Ethereum blockchain. Many decentralized apps are running on the network. ETH is used to pay for goods and services in various online stores. All this makes ENS irreplaceable, as it avoids the difficulties of working with ordinary addresses;
- Ethereum Name Service is the first service of its kind. Of course, there are other services that work on a similar principle. But ENS is unique as it allows uniting addresses, wallets, websites, and decentralized apps under one name. Similar projects may appear in the future, but currently ENS has no competitors that offer such a wide range of features.
The ENS platform offers its own token. It is designed not only to pay for readable name services, but also to manage a decentralized autonomous organization. With it, community members can put forward their suggestions for the further development of the platform.
ENS is an ERC-20 token. When the Ethereum Name Service crypto was created, 25% was airdropped to ETH holders, and 25% went to companies and individuals who contributed to the development of the platform. The remaining 50% was sent to the ENS DAO.
Benefits of ENS crypto
The pros of the token include:
- Reduced risk of making a mistake. With ENS helping to change complex addresses to simpler names, the risk of a user being mistaken is reduced to zero. As a result, the risks of sending tokens to the wrong address are also minimized.
- Immutability and lack of censorship. It is inherent in all projects based on decentralized blockchains. At the same time, decentralization avoids censorship. No one can take away a user's address or block it.
- The ability to find transactions in the Etherscan search engine. This applies to all transactions made with Ethereum Name Service crypto.
- Ability to profit from the sale of names in the ENS system. Similar to DNS, users can register unlimited numbers of names in the system and then sell them to interested individuals and organizations.
The main application is to use the token to get all the benefits of the functionality of the Ethereum Name Service system. That is, it can be used to buy and reserve names. In addition, ERC-20 token is also possible to use for buying and selling goods or services. However, at the moment it is not yet accepted by online stores and companies as a payment.
As for the prospects of Ethereum Name Service crypto, they largely depend on how interesting this service will be in the future. In general, its idea is relevant, because users really find it hard to use addresses consisting of dozens of characters. It's far easier to use a simple name for transactions.
The project team is working on integrating the languages of 12 countries, which will help to significantly expand the scope of the system in the future.
Many users have already noticed that domain names can be sold and make money on this. At this point, the system is similar to NFT (non-fungible tokens used to register unique items in the blockchain). Each domain is unique. Some are worth hundreds or even thousands of ETH. This already brings good profits from resale. As this industry develops, this idea could be a start-up business for many people.
The prospects of crypto Ethereum Name Service largely depend on the development of Ethereum as well. The system is tied to the second most important blockchain, which means it will be responsive to the situation with the popularization of Ethereum.
Currently, the community is waiting for Ethereum to move to the next stage. Soon the blockchain will work with the PoS consensus mechanism. This could significantly change interest in Ethereum, since it will make the blockchain faster and more eco-friendly as well.
If interest in ETH grows, the scope of ENS will also expand significantly. And this will lead to an increase in the value of crypto Ethereum Name Service.
At the end of the Ethereum Name Service review, it should be noted that the price of the token is far from its maximum levels.
As the number of users of this add-on to the Ethereum blockchain increases, the price of Ethereum Name Service crypto may reach or even exceed its maximum value. With the transition to Ethereum 2.0, this process could accelerate significantly.
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