What is Ethereum Name Service (ENS)?
It’s fairly easy enough to remember street addresses and email addresses. But when it comes to crypto, it’s hard to imagine anyone being able to memorize their wallet address–which could be as long as 34 randomly generated hexadecimal characters.
Crypto wallet addresses are generated this way because they are meant to be read by machines–not by humans. This is why we just simply copy and paste wallet addresses or scan their QR codes every time we transact. You could try memorizing it as a stunt, but it would be incredibly risky–actually quite foolhardy–since sending crypto to a wrong address or to a non-existing address could mean potentially losing the assets forever.
But for cryptocurrencies to be more widely adopted, there has to be a way to share wallet addresses with your contacts as conveniently as sharing an email address. It is for this reason that the Ethereum Name Service (ENS) was developed. Using this service, a simpler and shorter human-readable address can be assigned to your Ethereum crypto wallet, to make it easier to remember and type out.
ENS functions in the same way as the Domain Name System (DNS) which is the internet protocol that assigns website domain names so we don’t have to memorize long IP addresses. ENS uses the suffix “.eth” for your Ethereum wallet, but you can also use DNS suffixes such as “.com” or ”.org” for domain names you already own.
And like website domain names, Ethereum domains also need to be registered and maintained with an annual fee. The availability of a domain name can be checked at the ENS website app. ENS domains are actually purchased as non-fungible tokens (NFTs) so domain names can also easily be bought and traded on secondary markets like OpenSea.
Recently, ENS hit a milestone with it 1 millionth domain name registered.
What is the ENS token for?
ENS is a decentralized autonomous organization (DAO) which means that it is managed by its own community instead of being structured like a traditional company. Decisions are carried out through a community voting system using the ENS token. ENS token holders can use their votes to weigh in on the service’s features such as domain pricings, as well as purpose on future updates and developments.
ENS has a market cap of $175 million with a total supply of 100 million and a circulating supply of 20 million as of July 2022. Fifty percent of the total supply was allocated for the DAO treasury while 25 percent was recently airdropped to .eth address holders and another 25 percent to various contributors to the project.
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DISCLAIMER: The statements in this article do not constitute financial advice. PDAX does not guarantee the technical and financial integrity of the digital asset and its ecosystem. Any and all trading involving the digital asset is subject to the user’s risk and discretion and must be done after adequate and in-depth research and analysis.
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