EDITORIAL: Decentralized Identity, Subdomains, & 'Naming Standards'
Featured Author: Brommhill
Adapted and published with permission from the original author: @Brommhill
This is an editorial article and does not intend to represent the views, opinions, or beliefs of Ethereum Name Service, ENS DAO, or the ENS DAO Newsletter. Publication does not indicate condonement. The content herein is the journalistic opinion of the original author, alone, and should not be misconstrued as anything else.
Today I will be highlighting the incredible bullish case for ENS & decentralized identity, subdomains, 'naming standards' and maybe even shining some light on the key differences between other naming service competitors such as Unstoppable Domains (UD) & Handshake (HNS).
I will start off by highlighting my obvious bias for ENS, as admittedly I do not own any other domains from the aforementioned naming competitors. I do however believe this to be for very good reason — ENS is a decentralized naming PROTOCOL. Not a service.
One of the main criticisms you will hear about ENS domains (namely by those who support other NFT domains) is that with ENS you don't actually 'own' your names, and that "leasing domains is a bad thing." This is a common misconception and an argument made in bad faith.
"Owning your domains for life" sure sounds awesome, doesn't it? Who wouldn't want to pay a one time fee and keep their domain forever without worrying about recurring payments? Seems like a no-brainer, right?
What if I told you this was an incredible oversight, and a bad idea?
The problem with static NFTs in the form of domains is just that: they're static NFTs. The same way you hold custody of the jpegs in your NFT collection will be the same way you hold custody of your NFT domains with most ENS competitors.
Seeing the issue yet? No? Well… There's actually a number of reasons for why this is a bad thing, but I'll highlight the most concerning issues. Like all self-custodial blockchain assets, if you lose your keys, you have effectively lost those assets forever. This is also true of ENS, however, because the Top-level Domain of ENS (.eth) is handled by a decentralized smart contract, we are able to reliably lease domains in a trustless manner. This solves a myriad of issues and bolsters decentralization. Most importantly, it ensures that premium names can re-enter the ecosystem.
I'm surprised so many people are confused on this; how else would a naming ecosystem continue to thrive steadily into the future if names can be lost forever collecting dust? ENS ensures decentralization at the protocol level while future-proofing itself for decades to come.
ENS competitors such as UD & HNS 'solve' this issue by allowing the creation of multiple TLDs (e.g. .crypto .nft etc.) whereas ENS's one and only TLD (.eth) strictly resides on Ethereum's blockchain as a means of establishing a very reliable single-source of truth for its domains.
Being able to create as many top-level domains(TLDs) as you like may seem empowering at first, but realize the moment this becomes a trend, we have effectively convoluted the entire global naming system for the worst. Think I'm being hyperbolic and don't believe me? Well, consider for a moment a scenario in which duplicate domains exist because competing naming services decided to issue the same TLD. Now let's say you want to send payments to john.crypto but the name exists on both UD & HNS, for example. Where do your funds go in this scenario?
It's easy to see that a global naming standard is required and this role has largely been filled by ICANN & DNS for more than two decades at this point. Do you know just how much value sits atop the .com TLD alone? Many billions of dollars worth, even by rough estimates.
I personally couldn't see a bigger uphill battle than going against ICANN and the network effects they have created over the last 20 years. Instead, I believe the global naming standard must merge to bring together the legacy and the decentralized for a hybridization of the two. Thankfully DNS and ENS are completely compatible with one another, and integration has been live on Ethereum mainnet and going strong for more than half a year.
Additionally, there will be a LOT of competition during the next ICANN TLD auctions. What does this mean? It is highly suspected that during the next round of auctions the TLDs .crypto .nft .blockchain will have companies foaming at the mouth to secure them as Web3 grows.
So let's say that Unstoppable Domains fails to secure the .crypto & .nft TLDs from ICANN later this year... what happens to all of their already issued domains? The earlier mentioned problem of duplicate names will become highly prominent with ICANN clearly being seen as "real."
In this scenario, all UD domains with conflicting extensions become effectively worthless, as their value fragments in multiple directions. The worst part? Due to the nature of UD and its names not expiring even if they did win the TLDs, the names would still be lost forever.
So what makes ENS and .eth safe from the same inevitable fate as other naming services with multiple TLDs? Well, the TLD .eth actually already exists within ICANN and is going unused! Honestly, I don't know whose idea it was, but it was exceedingly clever and I'll explain why.
The ICANN TLD .eth is technically owned by the country Ethiopia - but due to ccTLD rules by ICANN, countries are unable to use country code domains with greater than 2 characters in length - taking .eth off of the table completely. This means that Ethiopia is in control of .eth but is unable to utilize it for its intent and purposes. Because of this, there is virtually no worry about being replaced and bastardizing the extension, and it actually greatly increases the chances ENS will secure .eth from ICANN.
You could say ENS has been squatting on the name and you would be correct. However, I think it's more than fair to say .eth has rooted itself firmly into the mind of the public, and all you would have to do to confirm that is checkout .eth leaderboard to see the numbers.
This is why UD & HNS or otherwise will never issue a duplicate .eth TLD, as we all know who would be seen as the "true" extension. Genuinely, whoever strategically chose .eth to be the one and only primary TLD for ENS was incredibly big brain and I must give you infinite kudos.
So now that we've established ENS as the most dominant decentralized naming protocol & service from a technical standpoint, what about the network effects?
Well… good news! Despite existing on Layer 1 and the occasional high gas fees that go along with it, ENS continues to march forward at a remarkable pace, not only in sales, and registrations, but also community as well!
From a user's standpoint it is clear that ENS is far and beyond ahead of any competition, and it's no wonder industry leaders such as Coinbase and Chainlink refer to Ethereum Name Service as the naming and decentralized identity STANDARD of Web3.
Speaking of industry leaders, here's Vitalik Buterin explaining how ENS is "the most successful non-financial Ethereum application” to date and some of the ways he personally leverages the technology.
It's hard to deny the accolades given to ENS, and I believe even competitors would have to agree when looking at the numbers. For example, ENS represents 99.75% of domains sales volumes on OpenSea.
Did you know that ENS is even competing with y.at on the emoji domains front? (and winning?!) I'm personally a big fan of premium emoji ENS domains for a number of reasons if you couldn't already tell from my quite literal bags - 💰💰💰.eth
But now for the really juicy stuff. Remember how earlier in the article I spoke on those pesky renewal fees and Layer 1 gas fees? Well frENS I'm glad to provide even more good news…
Because in collaboration with Chainlink, ENS has been working on a feature dubbed CCIP-read. With the introduction of CCIP-read comes a whole new world of functionality and possibilities to ENS. By leveraging CCIP-read, users will be able to register and house subdomains (which have no yearly renewal fee) onto other blockchains - both ‘Layer 1,’ ‘Layer 2,’ and even legacy systems.
What does this mean? It means subdomains will, in the near future, become near to zero cost to mint. This is a major turning point with ENS and ushers in, what I believe, will be mass adoption like we have never seen in all of Web3.
Understand that human-readable names were always meant to be a natural evolution of the blockchain & decentralized computing process. I ask that you take a moment and extrapolate only a few years into the future given the information presented thus far.
To wrap this up, we have a protocol supported as the naming STANDARD of the most widely used blockchain in the world that has uniquely positioned itself into the safest possible spot imaginable in both Web2 & Web3, while simultaneously capturing the eye of the public as #1.
Couple this with the ability and functionality that is only achievable with NFTs such as Sign-in With Ethereum (which can exist on any blockchain, layer 2 or legacy system because of CCIP-read) and you have potentially the formula for the greatest asymmetric value in all of Web3.
The coming dot eth domain action will make the dot com bubble look like a passing blip on the radar once more people understand the enormous potential presenting itself. There is assuredly no question about it anymore.. WAGMI frENS🚀🚀🚀