Introduction

In the early days of the internet, one of the main challenges for computer scientists was the mismatch between network domain names and long strings of internet protocol addresses. For ordinary users, the internet’s design could have been more user-friendly. This issue was resolved by introducing the most well-known domain name server, DNS (Domain Name Server). This technology allows each network IP address to correspond to a unique domain name. The system converts IP addresses to domain names through a dedicated server. For example, instead of entering a string like 34.465.191.121 when searching, you only need to enter Gate.io to locate the website.

Now, the Ethereum Name Service (ENS) takes the DNS concept to a new level.

What is the Ethereum Name Service (ENS)?

ENS was established in 2017 as a non-profit organization by the Ethereum Foundation. ENS has been operating independently since 2018 and is currently managed by True Names LTD, a non-profit organization based in Singapore. To understand the role of ENS, we can refer to the existing DNS (Domain Name Service).

On the Internet, every device has its IP address (Internet Protocol Address). Devices produced by major manufacturers can access the internet by following the IP protocol. The IP address is like a communication address for each household, allowing others to find the corresponding device quickly and conveniently. Early IP addresses were composed of 4 sets of numbers, known as IPv4. Later, as the number of devices connected to the internet increased dramatically, IP addresses were expanded to 6 sets of numbers, known as IPv6. In daily life, people rarely enter an exact IP address; the most common case might be entering the IPv4 address 192.168.1.1 when setting up a router.

Since IP addresses are composed of a string of numbers and are difficult to remember, DNS domain name services were introduced, binding a more logical string (e.g., Gate.io) to an IP address. Users only need to visit this easier-to-remember domain name to access the corresponding IP address. When people visit a website, the system first resolves the domain name to an IP address and then returns content from that IP address.

In the blockchain era, addresses required for transfers are often composed of a string of up to 42 characters with unclear patterns. For example, Vitalik’s wallet address on Ethereum is 0xabc68f7d712a1552468331c6ec29f5c112bb500ed5ffa660fe2b5af378921e37, which is more difficult to remember. Moreover, if a character is entered incorrectly when inputting the wallet address, it may even lead to the loss of virtual assets. To solve this problem, ENS was developed, mimicking the DNS idea. ENS allows users to bind a public key address to a domain name like vitalik.eth, making it easier to remember and enter.

Each .eth domain name is also a crypto asset compliant with the ERC-721 standard and stored on-chain, which can be used for DeFi, NFTs, and other applications. Furthermore, ENS is expected to build a personal identity system (also known as Decentralized Identity, DID) for the Web 3.0 era and be used for login authentication on the traditional internet. Perhaps soon, when registering accounts online, people will no longer need to submit their phone numbers or email addresses but directly use data stored on the chain, such as ID, avatar, and contact information, using private key verification to log in.

What is the Ethereum Name Service (ENS)?

ENS is a distributed, open, and scalable naming system that interacts with the Ethereum blockchain. In short, ENS’s role is to package the English and numerical codes recognized by computers into alternatives that are easier for people to read. For example, you will not usually see an Ethereum address directly displayed as 0xa3B1E324GA1ce40db73eD6026c4A179F099B6870, but as alice.eth. ENS also allows users to apply to purchase domain names registered on the Ethereum blockchain, thus fully owning them without intermediaries and not being controlled.

The biggest advantage of owning a domain name on the blockchain is the ability to receive cryptocurrencies, and NFTs, and send other content on the blockchain. .eth domain names make the whole process of sending cryptocurrencies quite easy while also reducing the margin of error. Additionally, because deposit addresses are set within the domain, users only need to take a quick look to confirm and carefully check if the address is correct.

How does the Ethereum Name Service work?

There are no restrictions on applying for domain names; anyone can purchase a .eth domain name. There are two main methods in principle: if you already have an Ethereum account, you can directly register on the ENS official website; if the domain name you want is already specified, you can purchase it on the secondary market, such as Opensea.

Anyone can visit the ENS website to see who has registered the domain name and who controls the address. After obtaining the domain name, users can trade by transferring or selling it to others. Each token comes with a wallet address and other information that can be managed by the owner. Ownership transfer is similar to sending NFTs.

ENS domain names are constructed based on Ethereum’s ERC-721 standard to represent a unique address. The ERC-721 is also the main protocol for NFTs, so each ENS domain name can be considered an NFT, maintaining its uniqueness with decentralized help.

Source: ENS Domains

ENS’s two main components are the registry and the resolver:

• Registry: The owner who wants to purchase a domain name is called a registrant and then registers the domain name on ENS. Here, the registry can see functional records, and monitor, and track the activities of registered domain names. The registrar is a smart contract managed by the main registrar, whose main function is to issue sub-domains to users following rules defined by the contract.

Source: ENS

• Resolver: The person responsible for the actual process of converting names to addresses is called a resolver. Any contract implementing the relevant standard can act as a resolver in ENS. Resolvers can associate names not only with blockchain addresses but also with InterPlanetary File System (IPFS) content identifiers. IPFS is a faster, more secure, and more open distributed peer-to-peer network. Resolver addresses are stored in the registry, and users can access the registry to retrieve the resolver associated with the name.

In short, resolving names in ENS is a two-stage process: first, searching in the registry for which the resolver is responsible for the name, and second, querying the content in the resolver.

ENS Governance and Tokens

ENS is run by a Decentralized Autonomous Organization (DAO) that manages the protocol. This DAO operates according to a set of rules that enable legitimate governance actions. The DAO is self-governed through ENS tokens on the Ethereum blockchain, which are mainly used for voting by token holders.

To submit a proposal to the ENS community, users need the support of 100,000 ENS governance tokens for it to be eligible for voting. The total supply of these tokens is capped at 100 million. Initially, the project airdropped 25% of the tokens to .eth domain holders; another 25% was airdropped to the contributing community, including developers, translators, and advisors; the remaining 50% is reserved for the ENS DAO’s internal organization. By early 2027, the total supply of ENS governance tokens is expected to reach the 100 million cap.

ENS Functions and Use Cases

As mentioned, ENS makes it easier for users to exchange cryptocurrencies. But ENS’s functionality extends beyond this. Integrating ENS with IPFS enhances decentralization and peer-to-peer distribution, opening up many other possibilities. Although creating a real website can be complex, it offers several advantages:

• No one other than the domain owner can shut down the site;
• Users can create their subdomains once they own a name;
• Users can store avatars and other personal profile data and use them across servers with a username;
• With a simple ENS name, users can store addresses and receive any cryptocurrency, token, or NFT;
• There’s no need to go through a centralized third-party intermediary;
• On commercial websites, there’s no need to use payment, banking, or identity verification services.

Some web browsers are still incompatible with ENS, but shortly, as it integrates with more existing services, more features will become available.

Although the concept of decentralized domain names isn’t mainstream yet, the current data is very important. In July 2022, ENS saw significant growth, increasing by 67% compared to the 122,327 domains registered in June, and setting a record with over 365,000 monthly registrations in July. As of the writing of this article, there are over 2 million ENS domains.

This rapid growth may be due to some well-known institutions registering their own ENS domains. For instance, a decentralized community of around 10,000 four-digit numeric domains, known as the 10K Club, has emerged. They are not formally affiliated with the ENS team but have created their community around ENS.

Google Search Supports ENS Domains

In May 2023, Google introduced a feature to query Ethereum wallet balances. Users can quickly check the balance of a specified wallet address by entering it in the Google search bar.

Google Expands Support for ENS Domain-Linked Wallet Queries

Former ENS core team member Brantly Millegan posted on social platform X, stating that this feature has been expanded to wallets associated with ENS domains. The balance will also display information about the most recent transaction, significantly improving the searching experience, and allowing users to quickly make queries without remembering a string of wallet addresses.

Why is ENS Important for the Crypto Economy?

ENS is arguably one of the most important and successful infrastructures on Ethereum. It acts as a bridge between social networks, cryptocurrencies, communities, and Web 3.0 websites, which is why it has great development potential. Integrating DNS names is a crucial step forward, as it allows any company to bring DNS domain names into the ENS system and use them as decentralized wallets, usernames, and websites.

Moreover, ENS is not limited to Ethereum; it can support other protocols, blockchains, and domain names. This makes cryptocurrency usage more user-friendly by making transactions more convenient and streamlined. In essence, ENS converts long strings of English and numerical codes used for computer identification into short, memorable links, allowing users to use these links for transactions, interacting with DApps, and receiving any type of cryptocurrency and NFT.

However, unlike the existing DNS system, ENS domain records are not centralized on a single server, making them less vulnerable to hacking attacks. In a world where centralization and data tracking have reached concerning levels, ENS can be a powerful tool for protecting user privacy and enjoying unrestricted internet freedom.

ENS: Repackaged Internet Identity

From the traditional DNS system to the Ethereum domain ENS, complex URLs can be distinguished with recognizable names to highlight identity. This leads to the concept of Decentralized Identifiers (DIDs), where individuals, businesses, projects, or other entities can use pseudonymous identities or labels for marketing purposes.

In other words, DID is a decentralized proof of identity, like a symbol of human identity and social interactions in the real world. However, exposing too much information may contradict the original intention of decentralization.

What’s the Difference Between ENS and Unstoppable Domains?

ENS is not the only service of its kind. Other projects offer similar domain services, with Unstoppable Domains being particularly prominent. They all have similar structures and functions but differ slightly in governance and operations.

ENS operates more democratically. As ENS holders, users can vote on the future of DAO policies, allowing them to influence future functionalities. ENS empowers the community more than concentrating everything in the hands of a few organization members.

Unstoppable Domains provides a simpler way to purchase domain names. It can also be used as a cryptocurrency wallet, making it more user-friendly to buy domain names with cryptocurrency.

Additionally, all domain names purchased on Unstoppable Domains are owned for life, eliminating the recurring cost of renting domain names and allowing users to have full control and usage.

Unstoppable Domains is a for-profit company, and many of its domain names are protected by branding to prevent individuals from owning certain names, words, or phrases. This is one of the biggest criticisms of the project.

ENS V2 Upgrade

At the end of 2023, ENS announced its second version (V2) upgrade, which aimed to enhance ENS’s functionality and user experience and further advance decentralized naming services.

Key Improvements and New Features

• Multi-Chain Support

ENS V2 allows interoperability between different blockchains, simplifying the naming and management of cross-chain assets. Users can associate ENS domain names with addresses on other blockchains, enhancing ENS’s flexibility and allowing wider use across multiple blockchain ecosystems, facilitating cross-chain operations and integration.

• Programmable Domain Records

ENS V2 introduces more powerful domain record functionalities, allowing users and developers to programmatically configure various attributes of domains. Users can set complex DNS record types, supporting more diverse application scenarios. This means that ENS domains are not limited to simple address resolution but can be used for more complex tasks such as content distribution and identity verification.

• Simplified Registration and Management Process

ENS V2 improves the user registration and domain management process, simplifying the user interface and operation steps. The new interface is more intuitive while offering greater operability, making it easier for new users to register and manage their ENS domains, reducing the barrier to entry and improving user experience.

• Enhanced Decentralized Governance

ENS V2 further strengthens its decentralized nature by introducing community governance features. Users can participate in ENS protocol governance and upgrade decisions through voting, promoting ENS’s transparency and user participation, allowing the community to have a more direct impact on the future development direction of the service.

• Improved Security and Privacy

ENS V2 enhances system security, including stronger mechanisms against DNS attacks and more efficient encryption technologies. Additionally, user data privacy is also strengthened, allowing ENS users to manage their domains and associated crypto assets more securely, reducing potential security vulnerabilities and privacy leakage risks.

Impact of ENS V2

The launch of ENS V2 is not only a significant upgrade to the existing system but also has profound implications for the entire blockchain and Web3 ecosystem, heralding the widespread application and innovative potential of decentralized naming services.

• Wider Application Scenarios: With the introduction of multi-chain support and programmable domain records, ENS can be used in a broader range of scenarios, including decentralized finance, decentralized identity verification, and cross-chain asset management.
• Improved User Experience: Simplified registration and management processes and an improved user interface make it easier for more users to access and use ENS services.
• Further Promotion of Decentralization: By enhancing governance mechanisms and user participation, ENS V2 promotes the concept of decentralization, allowing users to participate more directly in the governance and development of the service.
• Security and Privacy Assurance: Improved security and privacy protection measures make ENS more reliable in managing user data and assets, reducing the risk of potential security vulnerabilities and privacy breaches.

Conclusion

Soon, ENS will be used as an open public utility. With the help of community governance and decentralized components, ENS can ensure strong support for the crypto and DeFi ecosystems, thanks to its integration and decentralization features.

However, decentralization does not always lead to positive outcomes. In a fully decentralized network without censorship, dealing with fraudulent websites or harmful content can be challenging. Therefore, while decentralization is a beautiful concept and synonymous with personal freedom for many, it must be carefully managed to prevent situations from spiraling out of control.