Crypto is falling, but crypto domain name sales are spiking

Crypto is falling, but crypto domain name sales are spiking

Crypto is falling, but crypto domain name sales are spiking

There's a crypto land grab going on, but it doesn't entail expensive JPEGs of simian lowlifes, shiba inu-themed meme coinage, or metaverse virtual real estate. In some ways, this speculative surge is similar to what internet entrepreneurs have been doing for decades: buying up domain names to make a fortune. This type of domain name ends in.eth rather than.com or.org.

Eth domains, which are managed by the Ethereum Name Service (ENS), serve as a public profile for displaying an individual's transactions and holdings on the Ethereum blockchain. If you've been on Twitter, you've undoubtedly seen them on the accounts of crypto-focused people.

Typing a.eth domain into your web browser will not return an account, however doing so on the Etherscan database or a third-party website like Blockchair will provide a user's assets and transactions, including non-fungible tokens, or NFTs.

Because an ENS domain is an NFT in and of itself, it may be traded on the secondary market, such as OpenSea.

The price of Ether, the native cryptocurrency of the Ethereum network, is less than half of its November 2021 high of almost $4,500. So, why are ENS sales surging right now?

ENS domain name sales are surging

ENS registrations have been increasing since the service's inception in 2017, but have accelerated in 2022. The ENS announced record statistics in July: 378,804.eth domain names were registered, 25,000 domains were renewed, and the ENS generated around $3.9 million in net income.

ENS was the ninth most popular Ethereum-based NFT collection on OpenSea, the largest peer-to-peer NFT marketplace, in the previous 30 days, with around $9.5 million in trading volume. ENS sells individual domains and earns a percentage of secondary sales on marketplaces such as OpenSea, as do all NFTs developers.

ENS, on the other hand, is not a supply-limited NFT collection like CryptoPunks or Bored Ape Yacht Club, with floor prices in the hundreds of thousands of US dollars. There are an endless number of.eth domain names available through ENS, but only a few are particularly valuable.

Web3 personal websites

Purchasing an ENS domain is similar to purchasing a personal website for many cryptocurrency enthusiasts. If I own scottnover.com to represent myself in web2, why not also own scottnover.eth to represent myself in crypto-focused web3? (I have yet to complete it.)

Co-founder Rob Petrozzo spotted several of his coworkers change their handles in the business Slack workspace to their personal ENS domains at Rally, an online auction house for buying and selling fractional interests in collectibles such as baseball cards and NFTs.

Then, he claims, huge brands began registering or purchasing their ENS domains on the secondary market. "Nike.eth recently sold for $60,000 in the previous 24 hours," he told me in July. "Chanel.eth and Hermes.eth, both held by private purchasers, received bids in the previous 24 hours ranging from $50,000 to $60,000."

However, some of the most valuable ENS domains have been three-digit ones, such as 123.eth or 456.eth. The cheapest three-digit ENS domain currently available on OpenSea is around $38,000.  According to Nick Johnson, ENS's founder and principal developer, many new registrations and secondary ENS transactions have been prompted by interest in the 999 Club or the 10k Club, online social groups for owners of three or four-digit ENS domains.

Rally has joined the fray, putting 105.eth on its platform. According to Petrozzo, the sale, which is divided into equity shares, sold out in 10 minutes.

What’s the point of an ENS domain?

ENS domains are both extremely private and extremely public. They can be pseudonyms (a method of identifying oneself in cryptocurrency transactions) or one's true name.

They also provide a ledger of that person's assets and transactions, which is a difficult idea to grasp in traditional banking or finance. However, they demonstrate that, despite increased conjecture, there is capability in ENS domains that goes to the heart of how individuals express themselves in so-called web3 environments.

"What's intriguing is that the individual behind this domain name may really use different domain names when communicating in other contexts," said Al Morris, inventor of the Koii Network decentralized publishing protocol. "So he may be using one for, say, a consultancy practice or another company, and you can see how someone would wish to use 10 of these domains, each of which is meant to retain his or her underlying identity."

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