In the Web3 era, Ethereum Name Service (ENS), as the leader of decentralized domain name services, is playing a pivotal role. ENS was launched on Ethereum in May 2017 and is committed to mapping the user-defined domain with the suffix .eth to the user's address. Users only need to enter a simple domain name such as vitalik.eth to complete complex wallet address transfers, which greatly improves the user experience.
Basic business sta tus
ENS's domain services adopt a tiered pricing model and are charged based on the length of the domain name:
Domains ≥5 characters in length: $5 per year;
4-character domain: $160 per year;
3-character domain: $640 per year.
The total number of domain registrations of ENS has reached 1.12 million, the number of users exceeds 400,000, and more than 500 wallets or protocols have been integrated. ENS's historical total revenue is approximately US$56.7 million, ranking 15th among all projects, and its profitability is relatively strong. Unlike other protocols, ENS's revenue mainly comes from users' initial purchases and renewals. Nearly 90% of users spend only US$5 per year on ENS.
Since ENS announced its airdrop, its revenue data has shown explosive growth. Its revenue has grown more than eightfold in the past year, and its revenue has exceeded US$1.8 million for 11 consecutive months. New domain registration fees are the main source of ENS revenue, and registration revenue is more than 10 times the renewal revenue.
Business data performance
The number of registrations for ENS has experienced two explosive periods. The first outbreak period was after ENS announced the airdrop, and a large number of users poured in to participate in the airdrop. The second time was the wave of ENS domain name hype that started in April 2022, and user registration time has been continuously diluted as a result. The current average user registration time is 1.64 years.
Nick Johnson, the founder of ENS, established the project in 2016. It was initially a side project authorized by the ETH Foundation. Later, with the support of the ETH Foundation, the ENS team was established. Currently, the ENS team consists of 16 members, including CEO, CTO, customer service, community management, consultants and technical staff.
ENS has not made any investments since its establishment and relies only on the ETH Foundation and other donations to maintain operations. Now more than 500 projects have integrated the ENS protocol, and almost all well-known projects have adopted ENS. Integrating the ENS protocol has become a standard configuration.
ENS’ market positioning and user tags
The domain suffix .eth of ENS provides users with Web3 identification tags, allowing various users to invisibly emphasize their Web3 attributes. Whether it is crypto Twitter influencers, ordinary retail investors, or traditional brands such as PUMA, they are all using usernames with the .eth suffix, becoming live advertisements for ENS.
Driving force for rising valuation: If the future valuation of ENS shows explosive growth, it will be driven by the following factors:
Revenue side (business): The number of ENS domain name sales continues to surge.
Functional end (imagination space): The important role of ENS domain names in future Web3 is gradually emerging.
ENS's business revenue can be divided into two parts: stock and incremental. The existing income comes from the renewal of the domain held by the user, while the incremental income comes from the income brought by the new purchase of the domain by the user. Currently, the ENS protocol is in a period of rapid expansion, and the number of new domain name registrations continues to grow.
Judging from the revenue component data of the past year and a half, the renewal income of old users has increased steadily, accounting for about 10% of the total revenue. The ENS domain name is not only an identity label, but the account function it actually represents has not yet been fully explored. In the Web2 era, not everyone needs a domain name, but in the Web3 era, a wallet address is a necessity to enter Web3. ENS will have a vast market in the future.
competitor analysis
As the only seller of .eth domain names in the ETH ecosystem, ENS enjoys exclusive franchise monopoly rights. On ETH, ENS has no competitors, and it will be difficult for competitors to emerge in the future. At present, the ENS brand has become deeply rooted in the hearts of the people and has become the default standard for the project. With its brand advantage, ecological advantage and first-mover advantage, ENS will continue to maintain its leading position in the future market.
in conclusion
As a leader in decentralized domain services, ENS’s potential in the Web3 era cannot be underestimated. Although there is currently a lack of token empowerment mechanism, as the Web3 infrastructure continues to improve, ENS will become an important part of the decentralized identity identification (DID) system. In the future, ENS is expected to occupy a more important position in the Web3 ecosystem, driving its valuation to further increase.
The success of ENS not only relies on its technology and services, but also on the brand image and market recognition it has established in the minds of users. As more and more users and projects integrate the ENS protocol, the future development of ENS is worth looking forward to.