Several BAYC and CryptoPunks collectors who put up their tokens as collateral backing for Ethereum loans have been unable to settle their dues. Crypto analysts believe this could mark the onset of the first major liquidation crisis in the NFT industry. BendDAO Loans and Possible Risks Rumors of a liquidation spiral began earlier this week following a post about NFT lending platform BendDAO. BendDAO is a web3 protocol that allows users to take out loans in Ethereum using their non-fungible…
People can choose domain names that are easy to remember for their wallet addresses, thanks to the Ethereum Name Service (ENS). The secret to this technology is using a computer to understand this domain.
When it comes to Web3 communication, ENS has the potential to make all the difference. In this guide, we’ll go through some possible reasons for this.
Ethereum Name Service (ENS) – A Definition
To find out what a specific Ethereum address is, people can use the ENS. A person’s name has a link to a particular name. We’re talking about a name service based on Ethereum but not limited to it.
Using human-readable names instead of long wallet addresses is a safe, decentralized technique. Anyone may buy and administer domains using this decentralized service.
It is possible to use ENS instead of cryptographic keys to delivering ERC-20 tokens to a domain such as “mydomain.eth”.
There are numerous parallels between this technique and the internet’s DNS system. Users also have the ability to unify their online presence and walk into the world of Web3 using this tool.
Unlike the internet’s Domain Name System (DNS), the ENS behaves as a Web3 service. It relies on Ethereum’s smart contracts and is more secure, private, and immune to censorship.
Its team believes that internet naming infrastructure should be open and decentralized. Since the Ethereum ecosystem already exists, the ENS may take advantage of it and communicate with billions of existing smart contracts.
Understanding the Advantages of ENS
If others need to transfer tokens to you, they must know your ENS domain name. Using ENS, you may establish a sort of “nickname” for your wallet address.
A URL like “yourname.eth” will be the only requirement to share this information with your friends. If you find it challenging to share a lengthy string of characters representing your wallet, ENS will appeal to you.
Another advantage of using ENS over a DNS system is the lack of security concerns. A central server keeps track of all domain and name records with DNS. Consequently, criminals may hack this centralized storage and collect valuable data.
Instead, the Ethereum ecosystem’s founding team claims that no one can hack or remove ENS data.
The interaction between users is also more transparent and easier to understand when utilizing an ENS domain. In this way, Ethereum blockchain users have the unique option to create a wallet and differentiate it from the rest of the addresses.
A Comparison Between ENS and DNS
The DNS and the ENS are protocols capable of handling human interactions with Web2 and Web3. The Internet Protocol (IP) addresses require the DNS technology to translate into readable URLs.
The ENS technology wishes to make an Ethereum address accessible to the general public. If you think about it, this system works more or less like a modern phone book. You may locate a person’s wallet address by searching for their ENS name.
In technical terms, Web2 and DNS may function together without any issues. As of today, Web3, the term for a new, decentralized internet, still has numerous obstacles to overcome.
The primary goal of ENS is to make Web3 more understandable and to facilitate sharing of crypto addresses. The number of blockchain protocols supporting and incorporating ENS as part of their Web3 integration will grow over time.
The Choice Between ENS and Unstoppable Domains
There is, of course, another foundation dedicated to making it easier for people to deal with blockchain addresses. With Unstoppable Domains, the primary rival of ENS, you may get transferrable domains as well.
The Ethereum blockchain is the foundation for both Unstoppable Domains and ENS. Both services help you create a human-readable crypto address.
A few philosophical contrasts exist between these two platforms. ENS is an open protocol that anybody can access. Decentralization and community decision-making are at the heart of this system, which comes from a non-profit group.
Unlike other projects, Unstoppable Domains focuses on making money. “Brand protected” domains prevent individuals from owning specific names, words, or phrases. The system is not so open, as several complaints online show. In several cases, people have complained about being unable to buy domains with their names.
When it comes to payment, ENS and Unstoppable domains are vastly different. ENS domains, like regular website domains, enable purchases for a limited time. All you need to do is renew your “subscription” to the domain if you wish to continue using it.
With ETH payments and fees, the price of an ENS domain will vary based on when you wish to acquire it. Additionally, anybody can prolong your ENS domain’s registration, but this does not grant ownership of the domain.
Unstoppable Domains has no expiration date; therefore, you need to register it once. The Crypto.com app and various other payment methods are available for this transaction.
How Can You Get an ENS Domain?
Obtaining an ENS domain is pretty straightforward, as you will only need to follow a few steps:
- Create a crypto wallet through a popular system such as MetaMask.
- Buy ETH since the ENS app only accepts this coin.
- Go to the ENS app, search the available domains and buy yours.
It does not get more complicated than that. An initiative to make Web3 more user-friendly had to rely on a minimalistic access system like the one we described.
Who Is Behind ENS?
The Ethereum Foundation’s Nick Johnson and Alex Van de Sande were the driving forces behind the ENS’s early development.
Users of the service received ENS tokens in November 2021. The project relies on a DAO as a decentralized governing entity.
ENS token holders can utilize their assets the same way that corporation shareholders would. In terms of pricing, protocol evolution, and treasury management, token holders are in charge.
Additionally, the introduction of ENS tokens allowed the project to shift its financing strategy away from grants. In addition to being exchangeable for fiat currency, ENS tokens are tradeable using other cryptocurrencies such as Bitcoin and Ethereum.
Usability is a significant barrier to the widespread adoption of Web3 from a conventional standpoint. Cryptographic addresses, for example, may be extended and sophisticated, making them difficult for a novice user to understand.
ENS, a Web3 version of DNS, wishes to address this issue. Without being too technical, our guide provided basic details about this technology and its potential for revolutionizing the Web3.