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Back in the days, when the Internet wasn’t so mainstream, one of the main problems that users faced was that domain names hadn’t been matched up to Internet protocol (IP) addresses.
This made them very unfriendly towards the average Joe, who had to type in the IP address of the website they wanted to visit, as in to type in the numbers literally.
Unlike traditional IPs, cryptocurrency addresses represent even longer strings of numbers and letters. If a user wants to send another user funds over Ethereum’s network, they would have to input the address and make sure that each number and letter is written correctly.
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It’s also important to know that blockchain-based technology is very punishing in this regard. If you fail to input the address correctly and mistype a letter, the funds you send will be irreversibly lost. There’s no central authority to contact to reverse or refund the transaction—that money is lost.
And just like Domain Name Services (DNS) came to life when using the Internet, the Ethereum Name Service (ENS) came to be.
What is Ethereum Name Service (ENS)?
Ethereum Name Service (ENS) uses the same concept as the Domain Name Service (DNS) but adjusts it for the needs of Ethereum users. At its core, the Ethereum Name Service is a distributed, open, and extensible naming system operating on the Ethereum blockchain.
It aims to map human-readable names to machine-readable identifiers. In this case, the human-readable name can be something like “cactus.eth,” whereas the machine-readable identifier can be the Ethereum address (or other cryptocurrency addresses, for that matter.)
In the image below, we have given an example of what it looks like. The address belongs to the Ethereum Foundation. The ENS domain name that we created is just an example for the purpose of this guide:
The standard Ethereum Address is converted into human-readable text (foundation.eth). This means that users can send funds or interact with “foundation.eth” instead of the standard address. Obviously, this makes it much easier for regular users and also considerably tightens the possibility of a mistake.
According to the official ENS documentation, the system “has similar goals to DNS, the Internet’s Domain Name Service, but has significantly different architecture due to the capabilities and constraints provided by the Ethereum blockchain.”
Similar to DNS, ENS operates on a system of dot-separated hierarchical names called domains. The owner of a domain also has full control over the subdomains.
How Does ENS Work?
There are two core components to the Ethereum Name Service. Namely, these are the registry and the resolvers. The architecture of the system looks like this:
Registry
The registry is composed of a smart contract designed to maintain a list of all the domains and subdomains while also storing three essential pieces of information about each. These pieces are:
- The owner of the domain
- The resolver of the domain
- The caching time-to-live for all the records that are under the domain
The purpose of the ENS registry is very straightforward – it’s to map from a name to the resolver who’s responsible for it. Meanwhile, owners of domains in the ENS registry are allowed to:
- Change the ownership of the subdomains
- Transfer ownership of their domain to another address
- Set the resolver and the time-to-live (TTL) for the domain
Resolvers
Resolvers, on the other hand, are responsible for translating names into addresses. Every contract that implements the required standards can be a resolver in the Ethereum Name Service. However, resolving a name in ENS is a process that is composed of two steps.
The first one is to ask the registry what resolver is responsible for the said name. The second one is to ask that particular resolver for the answer to the query. In terms of architecture, it looks like this:
The Difference Between DNS and ENS
The Domain Name Service (DNS) was created in 1983 by Paul Mockapetris, a US computer scientist. It followed the research of another American scientist, Elizabeth Feinler.
Put in simple terms, the purpose of DNS is to match internet protocol (IP) addresses with human-friendly domain names. This allows users to type in the website’s name instead of having to input the literal numeric IP address.
In a similar yet different way, Ethereum Name Service attempts to make it easier for people (and applications) to read and share cryptocurrency addresses.
How to Register an Ethereum Name Service (ENS) Domain?
Registering an Ethereum Name Service domain is pretty straightforward. All you need is a hot wallet such as MetaMask.
Go to app.ens.domains (the official website for registering an ENS domain), and type in the domain name that you want to register. This will check its availability.
Once you have selected your name, all you need to do is follow the instructions given below:
Ethereum Name Service Governance
The Ethereum Name Service is governed by several different arms, each with its own significance.
ENS Token + Distribution
The ENS token is a standard token using the ERC-20 standard on the Ethereum blockchain. Its main purpose is to be used for the governance of the system.
Token holders can submit proposals and cast their votes. The main place where community members can discuss ideas and have governance-related discussions is the forum discuss.ens.domains.
The ENS token was airdropped to early adopters who had previously registered an ENS domain name. The claiming process started on November 8th, 2021, and users had until May 4th, 2022, to claim their allotted tokens.
25% of the total supply was distributed through the airdrop, while the rest is designated as shown in the following piechart:
ENS DAO
In the spirit of decentralization, the Ethereum Name Service is operated by a decentralized autonomous organization (DAO). The DAO is governed by holders of the ENS token, who can submit proposals and vote on them to determine the protocol’s future development.
ENS Foundation
The ENS DAO itself is represented by an existing Cayman Islands Foundation called the ENS Foundation.
It has a few purposes, including:
- To comply with tax requirements because without a legal entity, DAO participants may be responsible for a certain proportion of the DAO’s income, even if they don’t have access to these funds.
- To enter into contracts with other companies.
- To provide limited liability for participants in the DAO for the actions of the DAO.
Conclusion
ENS is a critical advent in the cryptocurrency field and a step towards solving some of the pressing issues that riddle the industry – namely, user experience.
Having to deal with long strings of random numbers and letters is oftentimes the reason for mistakes, and in the field of crypto, mistakes are quite commonly very expensive. Normalizing addresses and presenting them in a human-readable and friendly way is a step towards improving the overall user experience, the way DNS improved the UX for Internet users.
At the same time, though, DNS records of domains and names are typically stored on centralized servers, making them prone to hacks. ENS, on the other hand, are secured by Ethereum’s blockchain, making them multifold and more secure.
That said, the Ethereum Name Service is undoubtedly an important invention and innovation that’s quickly become widespread and used by thousands of people.
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