What is ENS? Beginner's Guide to Ethereum Name Service

Trying to infer something comprehensible from a chunk of data from a blockchain can be a headache. If you frequent crypto spaces in social media, you must have gotten used to seeing ".eth" in display names and profiles. What if we told you this is what a blockchain address can look like? Check out our explainer on Ethereum Name Service, also known under its abbreviation ENS, to learn how it is possible.

Key Takeaways

• What is ENS in crypto? ENS, meaning Ethereum Name Service, is a protocol that "translates" ETH crypto addresses into a human-readable form. It can be easily recognized by an extension ".eth", although it lets you choose from a wider variety;
• Since November 2021, ENS has been governed by a DAO. The voting is done off- and on-chain and utilizes a native token ENS;
• ENS is supported in most popular crypto products: Coinbase, Metamask, and Uniswap, among others.

The Basics of ENS (Ethereum Name System)

ENS is an open-source decentralized internet naming protocol powered by a set of Ethereum smart contracts. The logic behind blockchain addresses is clear to computers and algorithms, but not humans. For a long time, crypto users had to work around data strings with mnemonic phrases, and memorizing an address was nigh impossible.

A solution to this problem came from the modern history of communication: domain names. Before the Domain Name System (DNS), Web addresses used to look like strings of numbers. Ethereum Name Service (ENS) to Web3 is what DNS is to the Internet. Just as DNS transformed how we navigate the traditional web, ENS makes blockchain interactions more accessible by replacing complex addresses with memorable names.

What problem does ENS solve?

Due to its roots in cryptography, blockchains rely on hashing and encrypting data; this is the main reason why crypto addresses, keys, and pretty much all data recorded in it look like long strings of seemingly random characters. These lengthy crypto addresses create significant barriers for users trying to send or receive digital assets.

ENS transforms these intimidating address strings into human-readable names, considerably simplifying transactions. Instead of copying and pasting a 42-character hexadecimal address like "0x1234567890abcdef1234567890abcdef12345678", users can simply send funds to "[name].eth". This approach not only makes crypto more user-friendly but also reduces the risk of costly mistakes from mistyped addresses.

Key Components and Features of ENS

What is a domain name in ENS composed of? It corresponds to a non-fungible ERC-721 token, ensuring unique ownership. The system supports comprehensive domain management features, including the ability to set up multiple addresses (Bitcoin, Litecoin, etc.), create email records, and establish social media links. Integration with dApps is seamless, allowing these decentralized applications to recognize and interact with ENS names automatically.

ENS Domains and Subdomains

Like traditional internet domains, .eth domains follow a hierarchical structure. Primary domain ownership grants you full control over creating and managing subdomains. For example, if you own "company.eth", you can create "blog.company.eth" or "support.company.eth" as subdomains.

Subdomain registration doesn't require additional fees to the ENS protocol. This domain ownership model enables organizations to create branded ecosystems, with departments or services operating under unified naming conventions. Subdomains inherit the same functionality as primary domains: i.e. multiple cryptocurrency addresses and custom records.

ENS Smart Contracts

ENS consists of three main components powered by technology none other than smart contracts that provides seamless domain management and integration with dApps:

• Registry — a smart contract that stores all the names, subdomains, and their owners
• Registrars — smart contracts that own domains and release subdomains to owners that meet the criteria
• Resolvers — smart contracts that store and serve records on request. These smart contracts can be thought of as entities that do the interpreting.

How to Register an ENS Domain

The entire process of registration happens on-chain, requiring interaction with Ethereum smart contracts and payment of both registration fees and gas fees.

Registration follows a commit-reveal scheme to prevent front-running attacks. First, you submit a hidden commitment to your desired name, wait for a minimum period, then reveal your actual registration request. This two-step process protects users from having their desired names stolen by automated bots.

Choosing a Domain Name

When selecting your ENS domain, consider both practical utility and long-term value. Domain name availability can be checked instantly through the official ENS app or various third-party tools. The ENS name search function shows not only availability but also suggests alternative names if your first choice is taken.

Premium names, typically short names or common words, command higher prices due to their scarcity and memorability. That means names with 3 characters cost significantly more than longer alternatives. Changing domains later requires registering entirely new names so choose carefully.

Setting the Registration Period and Fees

The registration process requires setting your desired ownership period, with options ranging from one year to several years in advance. ENS registration cost varies based on name length: 5+ character names cost $5 per year, 4-character names cost $160 per year, and 3-character names cost $640 per year.

Beyond the annual fees paid to the ENS protocol, there are gas fees to execute the registration transaction on Ethereum. The system requires payment in ETH, and the registration immediately grants you an ERC-721 NFT representing ownership of your domain.

What is ENS Used For?

ENS is more than simple address replacement, striving to become a comprehensive identity and infrastructure layer for the decentralized web. Modern ENS domains serve as Web3 business cards, consolidating social media profiles, website links, and multiple cryptocurrency addresses under a single memorable name.

Simplifying Cryptocurrency Transactions

ENS dramatically reduces friction in crypto payments by replacing error-prone address copying with simple name entry (much less prone to error). When sending ETH or other supported cryptocurrencies, users simply enter the recipient's ENS name, and the system automatically resolves it to the correct address behind the scenes.

ENS domains can store addresses for Bitcoin, Litecoin, Dogecoin, and dozens of other cryptocurrencies beyond Ethereum. Stored addresses can be updated under the same domain, which further improves user experience for senders and receivers alike.

Decentralized Websites and Content

Notably, ENS enables decentralized hosting by connecting domain names directly to content stored on distributed networks such as IPFS. Users can host Web3 websites by pointing their ENS domain to an IPFS hash, creating censorship-resistant websites that don't rely on traditional hosting providers.

The combination creates a more robust alternative compared to traditional web hosting, particularly valuable for sensitive content or communities operating under restrictive regimes.

Integration with dApps and Services

The growing integration of ENS with various dApps and Web3 services demonstrates the protocol's expanding utility. Major platforms like Uniswap, OpenSea, and hundreds of other decentralized applications natively support ENS names, allowing users to interact using their memorable domains instead of complex addresses.

History and Team behind ENS

The idea of ENS was conceptualized in April 2016 by Nick Johnson. With an idea in hand, Johnson was joined by other Ethereum developers such as Alex van de Sande to make the vision a reality.

The mainnet was launched on May 4, 2017. A year later, Nick Johnson left the Ethereum Foundation with a $1 million grant to focus on ENS development and founded True Names Limited in Singapore.

Until November 2021, True Names Ltd. remained at the helm of the project. However, by late 2021 the transfer of governance to ENS DAO was finalized: since then, the protocol has been steered by this community.

The governance and steering are not entirely left to the DAO: there is a Caymans-based ENS Foundation that has been established at the same time. The non-profit is concerned with legal relations and brand management.

What is the ENS Coin?

The formation of ENS DAO called for a governance token to be created and distributed. The DAO held a retroactive airdrop of the token to the second-level domain name owners and contributors on November 8, 2021.

25 million (25%) of a 100-million total supply was distributed between second-level .eth domain owners. Users who actively utilized their domain name before October 31, 2021, were eligible for double the rewards.

Another 25 million was distributed by a loosely defined group called contributors: from 11 core developers to active Discord server members. The rest of the supply, 50 million remained in the DAO treasury.

Due to core contributors and the treasury receiving the largest shares and holding a significant amount of the token supply (69.54%), their rewards have a vesting period of 4 years. Airdrop receivers, translators, and Discord server members could use their ENS tokens freely from the very start.

What are the Alternatives to ENS?

The idea of ENS is not a new one, and other protocols tried to solve the long unreadable address problem similarly. FIO Protocol and Unstoppable Domains are other projects that suggest a similar solution.

If ENS to the Web3 is what DNS to the Internet is, then FIO Protocol is better likened to HTTP (Hypertext Transfer Protocol). The FIO Protocol addresses are slightly different and look like this: name@domain.

FIO Protocol is powered by its own blockchain based on EOSIO: the addresses also exist in it as NFTs and native tokens FIO can be staked and is required for network fees. To use the Ethereum Name Service, owning ENS tokens is optional.

Unstoppable Domains is an alternative provider for human-readable NFTs domains that can include crypto addresses, IPFS hashes or URLs, and logins/usernames. Unlike ENS, this platform does not have a native cryptocurrency.

Integrations and Future of ENS

ENS support extends beyond DeFi into social platforms, gaming, and professional services. Twitter displays ENS names in verified profiles, Web3 social platforms use them for user identification, and blockchain games incorporate them for player names and asset management. This dApp integration creates network effects: as more services support ENS, the value and utility of owning an ENS domain is supposed to increase proportionally.

The protocol is already integrated into a considerable amount of crypto services: from exchanges like Coinbase to Metamask and Uniswap. Millions of users enjoy using these platforms, and offering the utility of ENS is a way to make crypto more accessible to mainstream audiences.

How to Buy the ENS Token?

Now that you know more about ENS, you can easily swap its token with 100+ other assets with ChangeHero!

1. Choose the currencies on the home page, amount to swap, and the type of exchange. Provide your wallet address in the next step and check the details;
2. Double-check the provided information, read and accept the Terms of Use and Privacy Policy;
3. Send the cryptocurrency you will be exchanging in a single transaction. Fixed Rate transactions have a 15-minute limit;
4. All done? Now we are doing all the work: checking the incoming transaction and doing the exchange as soon as it arrives.
5. As soon as the exchange has been processed, your ENS is on the way to your wallet.

Customer support is available 24/7 in the chat on the website or through the email: [email protected].

Conclusion

Ethereum Name Service is one of the protocols spearheading global crypto adoption. If it manages to do what DNS did for the Internet, crypto as a whole will become more user-friendly and widespread. The protocol's success depends on continued integration with Web3 services and expansion beyond Ethereum's ecosystem. As blockchain technology matures, ENS domains may become as fundamental to digital identity as email addresses are today.

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