Ethereum Name Service (ENS) has filed a lawsuit against GoDaddy, the publicly listed internet registrar and hosting company, for selling a key domain name that is integral to its service.
The Sep. 5 complaint alleges that GoDaddy unlawfully sold the eth.link domain despite the domain still being registered with GoDaddy until July 26, 2023. It says GoDaddy “unilaterally” determined the domain had expired after it was not renewed in July and that eth.link would become available for sale on Sep. 5, 2022 if its registrant failed to take any action.
ENS domains are NFTs that allow holders to connect a ‘.eth’ domain name to cryptocurrency wallet addresses. This makes it easier for users to request payments to a simple ‘.eth’ address that can be easily read by humans, rather than sharing a 64-character alphanumeric code.
The complaint describes the eth.link domain as “a gateway between the traditional DNS namespace and the ENS system.” Users with ENS names were able to host content that is accessible to anyone with a web browser using the .link suffix. An example would be the address vitalik.eth.link.
Sold For $852,000
GoDaddy sold the domain to Dynadot LLC, another registrar, on Sep. 3. Dynadot, in turn, auctioned the domain to Manifold Finance, a project offering middleware-based scaling solutions for DeFi protocols, for the hefty price of $852,000 on Sep. 3. Manifold Finance confirmed the sale that same day.
“In so doing, GoDaddy has deprived Plaintiff True Names Ltd. of its livelihood,” the complaint alleges. “The sale will disable a valuable cryptocurrency network and recklessly risk making it available to scores of malicious actors.”
The eth.link domain was first registered in 2018 by Virgil Griffiths, an Ethereum developer and former ENS employee. In April, Griffith was sentenced to 63 months in prison for giving a speech on blockchain technology at a 2019 crypto conference held in North Korea.
While Griffith was not able to renew the domain name from prison, the complaint says that GoDaddy’s terms of service allow ENS to re-register the domain on his behalf, but that GoDaddy “refus[ed] to respond to multiple requests by representatives [of Griffith]” from Aug. 25 onwards.
In August, Nick Johnson, the lead developer of ENS, posted on the project’s governance forum that EasyDNS had secured the domain on Griffith’s behalf. However, on Aug. 30, forum-goer Leter noted that eth.link’s name servers were modified. Community member ethername spotted an auction for the domain on Dynadot the following day.
ENS then began using the eth.limo URL as a gateway for ENS names on Sep. 2. ENS filed the complaint in the U.S. District Court for the District of Arizona.
On Twitter, Manifold Finance posted “bids at auctions are speech, we only want what’s best for Ethereum” in response to the lawsuit.
Manifold Finance added that it will soon post a proposal on the ENS forums, suggesting it may be interested in returning the domain for a price.
The ENS service is similar to the internet’s Domain Name System, which allows users to access websites via simple domain names instead of entering the specific IP address of each website they wish to visit. ENS domains are powered by decentralized smart contracts, meaning they offer greater censorship resistance and privacy than the DNS domains of the internet.
According to Dune Analytics, ENS has created more than 2.2M names to date, with nearly 391,000 names currently registered by users.
In other ENS news, Johnson has published a governance proposal expressing the project’s intent to hire a fund manager to oversee its treasury moving forward on Sep. 8.
“This is an RFP to find a fund manager who can manage the bulk of ENS’s treasury going forward, with a goal of creating a sustainable fund that can pay for ongoing development needs without depending on revenue from registrations and renewals,” the proposal reads.
The proposal currently has unanimous support and will close on Sep. 14.
Johnson added that the RFP is expected to require subsequent DAO votes to select the winning fund manager and execute their treasury management strategy on-chain.
ENS is up 15% in the past week.