TL;DR (SUMMARY)

Ethereum Name Service (ENS) is a naming service for wallet addresses, hashes, and other machine-readable identifiers. It is difficult to read data strings into easily readable addresses. It works similar to the domain name system (DNS) used for websites.

Initially, ENS auctioned popular six-, five-, four-, and three-letter domain names to interested users using the Vickrey auction format. Each name has .eth at the end and can be attached to multiple cryptocurrency addresses, hashes, and other information.

Now you can easily buy names without attending auctions and rent them by year. Prices depend on the length of the name you want to rent. Additionally, if you owned an ENS domain as of October 31, 2021, you are entitled to an airdrop of $ENS governance tokens. You have until May 4, 2022 to claim your tokens.

Introduction

One of the biggest challenges of blockchain is improving its usability and accessibility. If we look at payments using Ethereum (ETH) or Bitcoin (BTC), new and even experienced users may find wallet addresses long, impractical, and confusing. Strings of hexadecimal numbers are simple for a computer to read, but are less intuitive for human users. Ethereum Name Service (ENS) combats the problem by allowing anyone to create simple website-style addresses that are easier to remember and use.

What is Ethereum Name Service (ENS)?

Ethereum Name Service (ENS) is an Ethereum-based project launched on May 4, 2017 by Alex Van de Sande and Nick Johnson of the Ethereum Foundation. The project allows users to display extensive public Ethereum addresses in a simplified text-based manner. This makes it easy to share, use and remember addresses and other data. Converting machine-readable numbers like 0xAb5801a7D398351b8bE11C439e05C5B3259aeC9B into human-readable alternatives is an important part of improving blockchain adoption.

ENS is not limited to just wallet addresses. It can be used to represent transaction IDs, hashes, and metadata, data commonly found in the cryptocurrency world. You may already be familiar with the domain name system (DNS), a naming system that acts as the Internet's phone book. DNS takes hard-to-remember IP addresses and attaches them to an easy-to-use URL, like https://academy.binance.com. Indeed, ENS is the DNS of the Ethereum blockchain.

ENS has since launched a governance token as part of its transition to a decentralized autonomous organization (DAO). Due to a large increase in the price of the token, the project has started trending and generated a lot of interest.

How does Ethereum Name Service work?

An ENS domain name uses ERC-721 Non-Fungible Tokens (NFTs) to represent a unique address. You can exchange a domain by transferring or selling the NFT to another person. Wallet addresses and other information are attached to each token, which is manageable by the owner. A top-level domain like .eth is owned by a smart contract called a registrar that controls the creation of subdomains. If you want to create BinanceAcademy.eth, you would have to interact with the .eth registrar

To purchase an Ethereum domain name, you can check its availability and rent it annually. However, popular names were initially auctioned. The highest bidder who won the domain could attach addresses, create subdomains, and lend or sell their domain name. For example, if you owned BinanceAcademy.eth, you can also create learn.BinanceAcademy.eth for free.

What can you do with ENS?

If you have ever been confused with multiple addresses when sending cryptocurrencies, you will understand the need for ENS. Just like you would save a friend's phone number with their name, ENS allows users to convert long numbers into easy-to-remember words. This creates a more direct experience with less chance of errors.

The owner of an ENS domain can also create subdomains to which he can then assign other data. It doesn't always have to be a wallet address. You can use it to redirect to a smart contract, a transaction or metadata.

How to get your own ENS domain?

Today, obtaining an ENS name is as simple as checking its availability at https://app.ens.domains/ and registering it. Let's look at an example of how to start the process. First, go to https://app.ens.domains/, connect your wallet and type the domain you are interested in.

You will see the availability of your chosen name. In our case, BinanceAcademy can be registered.

If you click on the name, you will see instructions for registering the ENS domain. You can choose your registration period and also see an estimate of commissions. With Ether (ETH) in your wallet, you can follow the three steps shown and request to register the address.

During the inception of ENS, popular six-, five-, four-, and three-letter names were bid in Vickrey-style auctions. A smart contract ran the entire process for five days. Anyone could participate in a public auction and try to buy the same domain name. Each interested party submitted a transaction with their maximum bid in the first three days of the open auction.

The auction then entered the revelation phase. Everyone revealed their bid or lost their locked ETH, and the winning bidder paid an amount equal to the second-highest bid. All revealed offers received a refund.

How much does it cost to get an ENS domain?

There are two possible parts to the cost of an ENS domain: auction costs and rental costs. The price of an ENS domain name at auction depended on the popularity of the name. Recognizable names like Sol, Mar or ETH reached higher prices, and short three-letter words were usually the most expensive. You can see examples below of some of the prices paid for domain names.

Once you own an ENS domain, you will need to pay an annual renewal fee in ETH. Fees are indicated in dollars, but are converted using an exchange rate provided by Chainlink's ETH/USD oracle. The annual renewal fee is $5 per year for names with five characters or more, but it becomes more expensive the fewer letters the name has.

How to claim Ethereum Name Service airdrop?

Anyone with an .eth address during the October 31, 2021 snapshot is eligible to receive $ENS tokens. You can claim them by following a few simple steps. You have until May 4, 2022 to claim your tokens before they are burned.

1. First, go to ENS Airdrop and connect your wallet by clicking [Connect] or [Connect Wallet].

2. Choose the wallet you want to connect with, such as MetaMask, WalletConnect, or another provider.

3. Click [Start] to continue.

4. You will see the option to [Start your claim process] along with the amount you can receive.

5. Be sure to read the educational information about $ENS, followed by the Constitution, which you must sign with your wallet.

6. Now, you can choose to delegate the voting power of your tokens to yourself or another user.

7. Finally, check the amount you are claiming and your delegate before clicking [Claim]; You will have to pay a gas fee to unlock your tokens.

Conclusions

In the world of decentralized networks, ENS is a step forward in creating easily accessible ways to interact with a blockchain. Just as we no longer use IP addresses to browse the web, we may see an increase in ENS names due to their usefulness and popularity. Since its airdrop, there has been growing interest from the cryptocurrency ecosystem in the project.