Creation of “.eth” domains increases and token values 30%3 min read
An address creation craze has gripped Twitter in the last 24 hours. Several digital influencers bought addresses in the “.eth” format. For example, a domain like “cryptheory.eth”.
These addresses are generated through a service known as Ethereum Name Service (ENS), which has become a kind of “.com” of Web3. As a result, the token linked to ENS shot up by almost 30% in the last 24 hours.
But what are ENS and why has the demand for these addresses exploded in the last few days? And what is the use of having such an address?
Modern version of traditional domains
ETH Name Service (ENS) is a protocol for creating decentralized domains on ETH. In a way, ENS is the decentralized version of the Domain Name System (DNS), the international standard used to build websites.
For example, imagine a website whose address is “amazon.com”. This domain was created through the DNS format. If the retail giant wants to, it can also adopt a decentralized address through ENS. In this case, the Amazon domain would be “amazon.eth”.
ENS started with domains of up to six characters, followed by the suffix “.eth”, but now support more characters. Each ENS address is unique and there are no duplicates, that is, there is no way to defraud or copy a domain created on ETH.
As they cannot be replicated, it is only possible to own an ENS address if you buy it from someone else. There is also the possibility of renting this domain, usually for a period of one year. The process works like a DNS domain renewal, with the difference that you don’t have to have a big server behind you.
Also, if a user owned an ENS domain until October 31, 2021, they are entitled to an airdrop of ENS governance tokens. Redemption can be made until May 4, 2022.
It is likely that the imminence of this airdrop has caused an increase in demand for the addresses. Another reason is the search for registering relevant domains at the beginning of this movement. For example, the aforementioned “amazon.eth” is probably not yet in the hands of Jeff Bezos’ company, which can generate a high return for those who register it today, should the company look for the domain in the future.
Records skyrocket five digits
In recent days, ENS records reached 10,000 daily addresses, according to data from Delphi Digital. This generated $1.1 million in daily revenue on April 26 as ENS registrations increase.
This occurs when users start registering ENS addresses on the fly, because of an eventual increase in demand. In this regard, famous brand owners like the Bored Ape Yatch Club (BAYC) may want to get their exclusive domains. As an anonymous profile mentioned:
“There are several PFP projects with 10K NFTs, but there will only be 10,000 ENS addresses with less than 10,000 characters.”
Each ENS address typically costs $5 for one year (eg transaction fee) and increases as your registration duration becomes longer.
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