Key Takeaway

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• The market value of ENS rose by 114% in the last week, and the trading volume of ENS in the past three weeks was greater than the sum of all previous trading volumes. More than one million domain names are held by 389,000 unique addresses, with an average of about 3 per address.

• After April 26, the high price transactions of digital domain names triggered a "digital war", which brought three waves. Popular ENS domain names have the same characteristics, such as three/four digit domain names, "00X.eth", "X00.eth" formats, serial numbers, and many other features.

• Well-known trademarks and IP ENS domain names will gradually return to their actual value, and there is still room for value-added Web3 domain names in the future.

Compared with Web2 domain names, ENS domain names have both practicality and innovative gameplay of DAO.

ENS is a domain name management system on Ethereum. It is an incubation project of the Ethereum Foundation. Its main function is to provide users with ENS domain names in the format of "XXX.eth" to bind addresses. The project was established in 2017. On the fifth anniversary of its establishment, there was another wave of squatting ENS domain names in the market.

In the past week, with the substantial increase in the number of ENS registrations, the popularity of the ENS domain name market has also ushered in an explosive rise. This week, the market value of ENS reached a new high of $47,677,198, an increase of 114% compared to the market value on April 24. At the same time, the trading volume of ENS began to show an upward trend on April 26, and the upward trend continued until May 2, and set a new high of $8,668,314 in ENS single-day trading volume. The trading volume of ENS domain names in the past three weeks has far exceeded the sum of previous trading volumes.

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Data source: NFTGo.io

According to the comparison between ENS and the overall market trend, ENS did not retrace following the market rhythm in a short period of time, and was not affected by the overall market, but walked out of an independent market according to its own rhythm.

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Market value and trading volume (the upper part is the total market, the lower part is the ENS domain name); data source: NFTGo.io

According to the time period when the trading volume is active, we set the time frame from April 26th to May 3rd, and use data to find out the reasons behind this upsurge.

Judging from the transaction records, before April 25, the transaction volume of ENS domain name NFT has been relatively scattered, and the types of domain names traded are also names and meaningful words, such as "lazybum.eth" and "pick-up.eth". Even if there are three-digit domain names, such as "095.eth", the transaction price is 0.6E, which is not too high.

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ENS domain name prices in different time periods; data source: NFTGo.io

We can regard May 1st as a dividing line. After that, the floor price of the "four-digit domain name" has been fluctuating around 1E, gradually reaching a "1E consensus", and a four-character domain name was sold at the highest price of 6E The domain name "6000.eth". At the same time, the floor price of "three-digit domain name" has also reached 10E.

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Data source: NFTGo.io

Data source: NFTGo.io

• There are many types of people in this wave of trends, the main types are divided into

• Squatting five-digit domain name (19367.eth)

• Preemptive registration of well-known IP and website domain names (mfer.eth, 58x.eth)

Registration of individual user names (zpg.eth)

These characteristics show that after the digital war, although there is still a tendency to preempt five-digit numbers, people's purpose has begun to change from "digital hype" to "use by themselves". According to NFTGo.io, there are currently 2.21 million unique wallet addresses on the market, while the number of ENS domain name registrations just surpassed 1 million this month. Judging from the popularity of social media, the excessive hype of ENS this time broke the circle again, making people realize the need to "own their own Web3 domain names", so more people began to choose ENS domain names that are practical for trading.

As of press time, three-digit ethereum domain names often sell for more than 15 ETH. Meanwhile, four-digit ENS names are often sold for upwards of 1.5 ETH. According to the period from April 25th to May 3rd when the transaction volume exploded for nearly a week, we listed the prices of some digital domain names and divided them into three ranges:

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Hierarchy of digital domain names

We found that according to the length of the number, there are mostly four-digit domain names in the transaction range of 2-3E, and most three-digit domain names in the range of 3-10E. ENS transaction prices are stratified, and the shorter the more expensive.

Finally, even number features are also more expensive. For example, "987.eth" and "3456.eth" are high-priced domain names. Another example is "abc.eth", which has the characteristics of consecutive letters, was traded at a price of 90E (about 250,000 US dollars) on May 3, setting the second highest transaction record in ENS history.

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An interesting point is that some users will use part of the domain name number as the transaction price. For example, "0115.eth" is sold at 0.115E, and "555.eth" is sold at a price of 55.5 ETH. There are also ENS domain names named after the stock codes of listed companies in the market, and these other factors will also affect their final actual transaction prices.

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600519.eth; Data source: NFTGo.io

Liquidity and Supply and Demand

Besides rarity, liquidity is also, to some extent, a key metric in digital domains. The higher price of three-digit domain names than four-digit domain names and citation letters also reflects supply and demand in the market. Compared with English text, numbers are the universal language of the world and are more widely accepted and circulated by people. Special numbers like 8888,001 have demonstrated a strong willingness to pay for rarity in the real world, whether it’s a license plate or some other entity.

Previously, the domain name with the highest transaction volume in the first history was "paradigm.eth", and the transaction price was 420E. The prices of some domain names that preempt companies and famous IPs, such as "amazon.eth", "NBA.eth", and "pornhub.eth", are generally higher, but they are not sold after strict valuation. I believe that in the future, the domain name prices of these well-known companies will gradually correspond to the actual value of these trademarks.

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Some high-priced ENS domain names; data source: NFTGo.io

According to the number of wallets of Web3 users and the number of registered ENSs, a rough calculation (offsetting the factors of "one person with multiple wallets" and "one person with multiple ENSs") is still far from meeting the needs of one ENS domain name per person. With the arrival of new users, this demand will increase. In the long run, ENS domain names still have a lot of value-added space.

Reasons behind and value

In fact, in the early days of Web2, the URL was also a long string of numbers in the IP address type, such as 132.583. The ENS domain name corresponding to the address is the same. In essence, the ENS domain name is to solve the needs of Web3 user address names, and the easier to remember and more distinctive domain names should have higher value.

In addition, compared with traditional domain names in the past, ENS domain names also have multiple practicability:

One is to act as a receiving address, capable of receiving various blockchain-based assets.

The second is the value empowerment of NFT. ENS domain name not only has the function of identity proof, but also has a DIY form. People can create and trade their own names, which makes ENS domain name have the attributes of NFT creation and transaction.

The third is practical scenario applications, such as virtual hosts, decentralized websites, hosting IPFS sites, subdomains, etc.

The fifth is to form a community. People with the same attributes form a community DAO, such as the 10k Club in this digital war. Their members all have four-character domain names and three-character domain names, and many KOLs have a large number of blue-chip NFTs. They use ENS domain names as their sense of belonging. Form a community.

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epilogue

epilogue

ENS has the full support of the Ethereum Foundation. Long strings of Ethereum addresses are difficult to memorize and trade, and having an ENS domain name can have a better experience in the Web3 world. In addition, ENS domain names do not charge royalties, and there is no fully centralized entity control. In addition to ENS, platforms such as Unstoppableweb are also providing names for Web3 identities such as ".nft".