A crypto-based domain name auction service launched earlier this year is finally gaining traction and attracting some big investors willing to pay top dollar for domain names. The Ethereum Name Service was launched on May 4, 2017; it featured an automatic registrar service enabling people to quickly and cheaply register a domain name ending in .eth via an auction.
Since its launch, the service has had almost 620,000 auctions and generated nearly 3.3 million ETH in deposits for bids. At the moment the addresses need to be at least seven characters but plan to reduce this limitation are in the pipeline. Serious bids have been coming in, some up to a million dollars, to secure an Ethereum domain name.
Names already claimed include, exchange.eth was which went for 6,660 ETH, foundation.eth went for 300 ETH, and weather.eth was auctioned for 101 ETH. The ENS works in a similar way to the Domain Name Server (DNS) that we are all familiar with today. It is a step towards mass adoption of Ethereum by making addresses easier to use. Currently, an Ethereum address is 42 characters long and not memorable, ENS enables the creation of more user-friendly addresses.
As with top-level domains (TLDs) investors are seeking the asset value in .eth names and are getting in early to hold on to them for later resale at a huge profit. This has been a huge issue with regular domain names where ‘cybersquatting’ accounts for an estimated 30% of them. According to the World Intellectual Property Organization domain holding cases and disputes have increased year on year, breaking previous records each year.
The potential with crypto oriented names could be as big as the coin market itself. The same type of speculation is now occurring with ENS that was witnessed during the dot-com bubble of the late 1990s. In order to resell or trade names, there needs to be a marketplace, and these are starting to emerge, the first being namebazaar.io. The platform provides a streamlined alternative way of transferring names using smart contracts.
Other developments with registrars, wallets and blockchain based contracts will soon emerge from what is currently embryonic technology. The potential for growth is immense, as with the thousands of regular domain name registrars around the globe, there could be a similar future for ENS or other crypto-based name systems.