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Web3 Domain (.eth)



Have you ever wondered why many users have .eth at the end of their nickname? If you thought it was a nice term to include in your username, you're wrong. We're talking about Web3 domains.


Web 3.0 domains are different from a traditional DNS address, such as amazon.com or opensea.io. Instead of providing a set of human-readable (and more memorable) characters as a substitute for an IP address, a Web3 domain is a human-readable, human-chosen address that represents your cryptographic wallet.


Ethereum Name Service (ENS) plays a key role in all of this. ENS is equivalent to a DNS domain and offers a decentralized and secure way to translate one's domain into Ethereum addresses, the protocol also has its own utility token $ENS.

ENS domains currently end with .eth


What's ENS?


ENS allows for a readable and interoperable username across dApps and blockchains. Because the cryptocurrency space is highly technical, it can be complicated for first-time users and non-tech savvy individuals.


Take crypto transactions, for example. To send a cryptocurrency payment, you need a wallet address, which consists of a long string of digits and letters. In addition, users have a different contract address for each cryptocurrency, making it difficult to manage, confusing crypto beginners.


ENS, short for Ethereum Name Service, aims to become the protocol of choice for the decentralized internet by creating Web 3.0 usernames. Instead of having a list of contract addresses for each crypto address, you will have a single ENS domain, such as "cryptohubble.eth", where you can receive any type of crypto and NFT.

Let's take an example:


Let's say your friend wants to pay you back for dinner in crypto. To do so, you'll need to share with him your Ethereum address consisting of 42 hexadecimal characters, which might look like "0xDC25EF3F5B8A186998338A2ADA83795FBA2D695E." This is the equivalent of your IBAN, allowing others to send cryptocurrency to your wallet. With your ENS domain, you can directly share a link to it, "mariorossi.eth" - which is automatically linked to your wallet address.



Other benefits


In addition to Ethereum addresses, ENS also offers human-readable domains for other cryptocurrency wallets, websites, content hashes and metadata - aiming to be your Web3 username, linking all your addresses and websites under one nickname, so that you can receive any type of cryptocurrency or NFT through your ENS domain.


As per ENS documentation, the protocol describes itself as "a distributed, open and extensible naming system" that offers decentralized, blockchain-protected domain naming and lookup services. Because of its decentralized nature, ENS is not controlled by a single entity. This makes ENS more secure than centralized naming services as there is no single point of failure.


How ENS works?

ENS is built on two Ethereum smart contracts. The first smart contract is the ENS registry, which registers all domains registered on ENS and stores three pieces of information about each domain: the domain owner, the domain resolver, and the caching time for all records under the domain. The second smart contract is the resolver, which translates domain names into machine-readable addresses and vice versa. This second smart contract matches each domain to its corresponding user, website, or address.



Those wishing to create their own Web3 username can visit the ENS app and begin by searching for an available domain name. Once you find one, you'll simply have to follow the registration process, which includes confirming two transactions from your wallet and paying the annual fee, which is US$5/year for names longer than five characters. However, being an ERC-720, it is located on ethereum and the gas fees to perform transactions are very high. Once you own the domain, you can link it to your cryptocurrency wallets, websites, and create multiple subdomains, such as email.rick.eth or website.rick.eth - all linked under the same ENS domain.



Trading on the secondary Market

Since ENS domains are limited, crypto natives are rushing to secure their nicknames, just like in the early days of DNS names. Some are also dabbling with flipping ENS domains, which can be a lucrative side business, considering exchange.eth sold for 6.6k ETH while weather.eth sold for 300 ETH.


Most of the most coveted domains, such as Apple, Amazon and many others have already been taken, the same goes for the names of famous people, however we are sure that, with careful research, you can still "flush out" some interesting domains...




What is the ENS token?

Because ENS is an open-source and fully decentralized protocol, it is not governed by a traditional corporate hierarchy. ENS is governed by the community as a DAO (decentralized autonomous organization), which brings us to the ENS token.


ENS DAO is governed by the ENS token - the utility and protocol governance token used to submit proposals and cast votes to influence future protocol development. Anyone with ENS can cast their votes for proposals on DAO ENS.


ENS is an ERC-20 token, trading at $18.19, as the 144th largest cryptocurrency, with a market capitalization of $350M, at the time of writing this article. The token has a maximum supply of 100 million coins and a circulating supply of 19.6 million.



Of the total ENS supply, 25% was distributed to ETH holders, 25% went to ENS contributors, and the remaining 50% went to the ENS DAO. Those who purchased an ENS domain prior to the issuance of their utility token were rewarded with an aidrop of the $ENS token. The ENS aidrop is known in the crypto world for being one of the most profitable Rewards received by "early adopters" of a protocol.


Why is ENS important?

Ethereum Name Service is essentially the Web 3.0 version of DNS, short for Domain Name Service. ENS offers a decentralized alternative to traditional Internet DNS, eliminating the risks associated with its single point of failure.

As a blockchain-based protocol, ENS is inherently more secure and censorship-resistant, being built on Ethereum. The fact that ENS is essentially two smart contracts allows for leading-edge interoperability with other smart contracts and the entire Ethereum ecosystem.


ENS is the first service of its kind for crypto and blockchain addresses. There are other services that are trying to replace the old DNS for the internet, but ENS is currently the only player in its league that offers nicknames that can work across all your wallets, dApps, and decentralized websites. ENS also serves to make crypto transactions more understandable and accessible for blockchain beginners. Similar services may appear in the future, but for now, ENS is un-rivalled.



What does ENS mean for the crypto space?

ENS bills itself as "an open public service that belongs to the community" and with its decentralized components and community governance, it could become a significant backbone of the crypto and Web 3.0 ecosystem.


The cryptocurrency space is a highly technical field, which is often enough to discourage crypto beginners from exploring this space. However, ENS solves this major barrier to adoption by making cryptography more accessible and easy to use.


With the launch of DAO on November 9, 2021, 25% of the total token supply was also released. The ENS token quickly gained interest among investors, as its market capitalization crossed the $1 billion mark on November 10, 2021 - just one day after the DAO ENS launch.


In the roadmap, ENS plans to integrate the entire DNS namespace, which means owners of any internet domain will be able to claim it on ENS. This will position ENS as a parallel extension of DNS, creating cross-platform Web 3.0 usernames that will become a key component of our decentralized identity. Because it makes the blockchain and crypto world much more accessible to beginners, it is becoming a key component of the future crypto space.



UPDATE:


A member of our community pointed us to another decentralized peer-to-peer domain name service protocol: Handshake (HNS)



Handshake is a public blockchain that acts as a global list of domain names. Through the Handshake network you can look up the IP addresses of websites, directly on the blockchain.


Handshake offers additional services compared to ENS. For example, anyone is able to register new top-level domains (TLDs). In simple words, instead of buying "mydomain.com", you can directly buy the TLD "mydomain", forgetting the ".com". If in possession of a popular domain, you can also sell access to the subdomain: "john.mydomain".


You can find more information on their official website.



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