Demand for .eth domains remains strong despite the ongoing market downturn.
Ethereum Name Service (ENS) had a stellar September as both registrations and renewals hit all-time highs above 437,000 and 45,000 respectively.
As a result, the protocol’s monthly revenue jumped 21% to $5.5M. Total users exceeded 1 million, with the protocol gaining ~39,000 new users in September.
This comes at a time when overall volumes and prices of most NFT projects are dwindling. The cumulative trading volume across all NFT marketplaces stood at $616M on May 1. On Oct. 2, that figure stood at a mere $16 million, a drop of over 97%.
ENS’ numbers have not gone unnoticed by market participants, who have driven up the price of its governance token by 11.7% in the past 7 days. However, ENS remains well below its all-time high in the $80s that was hit back when it was airdropped to early users in November 2021.
Web3 Domain Rush
The .eth rush is reminiscent of the domain squatting frenzy of the 1990s.
ENS is a domain name resolver that offers .eth domains on the Ethereum blockchain. Users can easily use their registered name instead of their public key to send or receive tokens. For example, a search for Ethereum founder Vitalik Buterin’s ENS domain on Etherscan yields the wallet associated with vitalik.eth.
Much like its traditional DNS counterparts, short, catchy domains are pricier. A 3-character domain is more expensive than a 4-character domain, and so on.
For this reason, three letter domains are the ones that investors typically are most interested in. In the past week, 3-digit domains 408.eth, 242.eth, and 468.eth were sold for more than 40 ETH apiece, worth approximately $52,000 at press time.
The floor price of the so-called 10k club, which consists of 4-digit ENS names, stands at 2.65 ETH ($3,500).
ENS is currently testing a new smart contract called the ENS Name Wrapper, which allows existing ENS domains to be converted into an ERC-1155 token. Once converted, the parent domain holder can create subdomains.
For example, the owner of abc.eth can allow the creation of a subdomain called xyz.abc.eth, which can be lent out to other users. This feature is called fuses, and it will allow ENS holders to create subdomains, set permissions, and revoke permissions.