ENS Domains: Utilities vs Collections
Website domain collecting has been a stable source of income for individuals and businesses alike since the world wide web first began. The value of a domain is immense. Without them, accessing many of our favorite web2 sites would be difficult.
As the internet begins shifting from web2 to web3, we’re starting to see a new trend of domain collections pop up that are specific to each blockchain network. ENS, Ethereum Name Service, is the most prominent example of this trend.
As we see more and more domains registered on the blockchain, alpha groups are beginning to call countless subcollections to fit different trends which are hit or miss. Some ENS domains have sold for 300 Eth while others have sold for nothing.
So, where is the line between collectibles and identity with this unique set of NFTs?
What are ENS Domains
An ENS domain is an identity which you can place upon your Ethereum wallet to make your public address more recognizable. It allows users to avoid the long, complex public addresses composed of random numbers and letters.
The added benefit of this is that users can associate different businesses, Twitter handles, and unique identifiers to specific wallets so that buying and selling products or services can be a more seamless transaction.
These ENS domains can also be placed on business cards or other advertisement mediums to help tell people where they can immediately send funds and NFTs. In the web3 ecosystem, this feature allows wallets to become easier to organize as more users become active in the Ethereum network.
How to register
To make an ENS work properly, it must first be registered with the ENS website after being minted. This allows the ENS site to “turn on” the domain so that it can actively take part in transactions on the blockchain.
Once done, there will be two titles that can be set - Registrant and Controller.
Registrant - The wallet address associated with registering the domain
Controller - The wallet address linked to transactions through the ENS domain
It is important to note that registering an ENS domain requires a subscription fee. This fee can be set to 1 month, 1 year, or more in order to keep the service running smoothly.
What makes these collectible?
Due to the ability to mint nearly anything as an ENS domain, the capability for creating different collections is huge. While the scope of ENS is vast, the ability to make limited supplies from collections using numbers and phrases is creating buzz. Just recently, the domain 000.Eth, which is part of the 999 club, sold for 300 Ether.
Notable ENS Collections:
999 Club - ENS Domains which use digits 1-999
10K Club - ENS Domains between 1000-9999
Arabic 3 Digits - 1-999 using Arabic Numerals
In many cases, a lot of these high-priced ENS domains are acting as status symbols more than a utility. The ability to be a part of a club that only has 9999 available spots means that there is a real supply to weigh against the demand for these tokens.
Moreover, there are many numbers which fall into these categories such as 69, 420, 666, 4, 13, etc., which all carry a specific meaning. This drives the value for these specific domains even higher
Future of ENS
Beyond status symbols, the future of ENS domains is promising. They offer a level of identity that can be attached to a wallet address which is much more personal than a complex series of random numbers and letters.
This added layer of simplicity will go a long way for the adoption of web3, cutting out much of the confusion that many newcomers are overwhelmed with.
Other blockchains
What remains to be seen is how other blockchain networks begin to utilize the same concepts. When a similar domain service pops up on Solana or Polygon, we can expect to see a similar rush to register the same types of digit groupings that have been so popular on Ethereum.
As other networks begin to grow and try to compete against Ethereum, the added utility of web3 domains will need to become available. The ability to use an ENS as an identifier, brand and status symbol is too large to ignore in the future of decentralized ecosystems.
