Is there still a chance for ENS after top-level domains are snatched up?

Written by: Karen, Foresight News

Since its launch over 5 years ago, ENS has gradually evolved from an Ethereum address resolver to a business card in the Web3 world, and with the adoption of ENS and the transformation of Web3, it is highly likely to become the .com top-level domain in Web3.

This article will discuss the reasons for optimism about ENS domains, which domains are worth paying attention to, and the opportunities presented by ENS domains. Before that, we can take a look at a set of data to glimpse the adoption situation and trends of ENS.

• As of the time of writing, the total number of ENS domain registrations has exceeded 1.86 million, with over 500,000 independent holding addresses.

• In July, the monthly registration number of ENS domains surpassed 370,000, setting a historical record.

• Currently, over 360,000 domains have been set as primary domains (reverse resolution), which can serve as users' cross-platform Web3 usernames and profiles.

• Since November 2021, there have been 5 months where the number of new domain registrations exceeded 40,000.

• Starting from mid-2021, the number of domains setting Avatar images has steadily increased. As of now, over 36,000 domains have set Avatar images, with more than 10,000 added in both May and July 2022.

• In the past year, ENS's total revenue reached nearly $54 million, with May's revenue of $9.57 million setting a historical record, and July's revenue at $6.86 million.

• Roughly estimated, in the past year, 10% to 20% of ENS's revenue came from renewal fees, with the remainder from registration fees.
  

Source: Dune

Why am I optimistic about ENS domains?

1. ENS domains can be seen as a business card in the Web3 world, representing the identity of individuals, businesses, and even countries, and can be displayed using numbers, letters, emojis, and symbols. In contrast, traditional domains like DNS are more focused on businesses and companies. With the rise of Web3, the adoption of ENS will see a quantitative leap.

2. Domains are becoming standard for traditional institutions and large enterprises to "get involved" in Web3. Budweiser purchased beer.eth for 30 ETH last year; luxury brand Gucci acquired gucci.eth for 12 ETH in March this year and began accepting cryptocurrency payments in some stores in the U.S.; jewelry brand Tiffany purchased tiffany.eth for 29 ETH (about $50,000).

3. The narrative of ENS in Web3 can be infinitely amplified. According to incomplete statistics from the ENS official website, there are currently 505 applications integrated with ENS, including over 60 wallets such as MetaMask and Coinbase Wallet, Opera and Brave browsers, mainstream applications like OpenSea, Uniswap, Aave, 1inch, Balancer, and browsers like Etherscan. Additionally, you can set and display personal profile information within your owned domains, such as Bitcoin, Litecoin, or Dogecoin addresses, as well as email, URL links, Twitter handles, and information from GitHub, Reddit, Telegram, etc., and even add Avatar images. Imagine a future where you can use a primary domain as your username and profile across most cross-Web3 applications and change it all at once whenever you want.

4. ENS allows users to "borrow" domains to showcase their other NFTs, meaning that the NFT can be set as an Avatar. Currently, Avatar images support NFTs held by users on Ethereum that comply with ERC-721 and ERC-1155 standards. Once set, the Avatar can become the background image of the domain and be displayed across all ENS-compatible applications.

5. ENS inherently possesses strong social attributes. From the surface of domain names, we can see the rapid formation of multiple club groups around digital domains recently. Moreover, ENS domains may intuitively reflect the "celebrity effect" more than NFT series like BAYC or CryptoPunks, as we may feel a sense of identity belonging when seeing users with ".eth" in their Twitter handles.

6. Subdomains have great potential to drive the geometric growth of ENS and even Web3 adoption. The upcoming NameWrapper from ENS will allow subdomains to exist independently from the original domain as NFTs (ERC-1155 standard). Imagine a company that owns its company name domain distributing subdomains to subsidiaries, clients, or even users; a DAO or project that owns its project name domain can distribute subdomains to its users; a surname domain can distribute subdomains to others with the same surname, leading to a rapid increase in ENS and Web3 users. Ultimately, owning a subdomain may reflect our level of participation in Web3.

7. Auctions for expired domains will provide opportunities for fair pricing and sustainable development for projects. Currently, when an ENS domain expires, the official provides a 3-month grace period. After the grace period, the domain will start an auction at $100 million, decreasing exponentially until someone is willing to pay a premium to purchase it. Of course, as previous data shows, 80% to 90% of ENS's revenue comes from registration fees. For domains with 5 or more characters, the annual fee is $5. Domains with 4 characters cost $160 per year, while 3 characters cost $640 per year.

8. ENS domains also allow for the launch of censorship-resistant decentralized websites, and can be used alongside held DNS domains (i.e., importing DNS domains into ENS). For decentralized websites, after uploading the site to IPFS, it can be accessed using an ENS domain.

Which domains are worth paying attention to?

1. Company, brand, and project name domains: Especially those of tech and financial giants and popular projects. The highest transaction ENS domain is paradigm.eth (420 ETH), with samsung.eth and nike.eth each selling for 60 ETH, and starbucks.eth selling for 50 ETH. Recently, the holder of amazon.eth rejected a $1 million offer; the holder of apple.eth turned down a 100 ETH offer.

2. Numeric domains: Numeric domains are simple, memorable, and universally applicable, with a high scarcity for combinations of three or four digits, indicating their value. The highest transaction is 000.eth (300 ETH, second only to paradigm.eth). There are already numeric clubs like 999 Club, 10k Club, and 100k Club. Driven by the popularity of numeric domains, many people have started registering Arabic numeral domains, Chinese numeral domains, and Emoji with numbers, with ٠٠٠.eth (Arabic "٠" for 0) selling for 100 ETH, although the value of other similar numeric domains may be significantly lower.

3. Name and surname domains: Name and surname domains have a wide coverage, and their value may further increase due to the development of subdomains. For example, the holder of john.eth can distribute subdomains with different surnames to others, and the holder of smith.eth can distribute subdomains with different first names. Of course, users can also register domains that include both their first and last names.

4. General definitions, industries, and product categories: Domains that are well-recognized, especially those that can expand into subdomains, such as games.eth, wallet.eth, dapp.eth, asset.eth, name.eth, art.eth, beer.eth, etc.

5. Short word domains: Especially words related to economy, internet, and technology.

6. Emoji domains: Emoji domains can be seen as PFP NFTs. According to Unicode statistics, there are currently only 1853 Emojis, of which three contain non-ASCII characters and cannot be registered as ENS domains. The remaining Emojis consist of 1 to 5 codes, and Emojis made up of three codes can register a single Emoji domain, while an Emoji made of one code requires at least three expressions to form a triple Emoji domain. According to ENS.Vision data, there are currently only 1327 single Emoji domains, 1316 triple Emoji domains, and 864 double Emoji domains. The scarcity of short character Emoji domains gives them relatively high value, but one must also be cautious of potential updates or a large influx of new Emojis.

What other opportunities exist for ENS domains?

If you have only started paying attention to ENS domains in recent months, you will find that most of the domains you think of have already been registered. A few months ago, after bulk importing the names of Fortune 500 companies, combinations of three and four digits, and the top 2000 most popular common names and surnames, I found that there were very few "missed opportunities." So what opportunities are left for newcomers in ENS domains?

1. Pay attention to soon-to-expire domains: However, due to the need for ENS expired domains to be auctioned at a reduced price, it is necessary to look for suitable opportunities.

2. Make offers on registered domains: In the NFT trading market, make lower offers on domains you are optimistic about; you can make offers on multiple domains with the same ETH.

3. Discover potential domains: Keep an eye on new industries, new fields, new things, new projects, and new products from tech giants to find domains that may appreciate in value in the coming years.

4. Observe the transaction status of domains priced over 1 ETH: You can also check the NFT market like OpenSea by transaction volume from high to low, which may provide some insights.

5. Use your imagination: Such as short letter combinations, combinations of words, combinations of numbers and letters, and mixed symbols with hyphens.

Of course, it cannot be denied that the recent high popularity of ENS is largely due to the influx of hot money and speculators, but there is reason to believe that the value of ENS itself will not be a fleeting phenomenon. Additionally, ENS domains are difficult to price; factors such as the meaning of the domain, commercial value, coverage, recognition, and being short and clean can all determine the value of a domain. Especially when purchasing domains or grabbing expired domains with premiums, we must decisively act on promising domains while also doing our homework in advance to find suitable price ranges.