The Ethereum Naming Service (ENS) has made a comeback in recent years, since a major update in 2019. In May 2022, it reached a significant milestone of having one million registered names. This reversed OpenSea’s status as the leading gas combustion service on the Ethereum network.
With this in mind, let’s explore the most common misconceptions about ENS.
#1. It’s just like a DNS
The Domain Name System (DNS) was invented in 1983 as an answer to the problem of having to enter an IP address to access a website. Entering an IP address, e.g. 127.0.0.1, is a problem because they are hard to remember. DNS fixed this by simply entering a name in the search bar, such as CryptoVantage, and it would take you to the associated IP address.
The Ethereum Name Service is not exactly the same as a DNS, although you can see the similarities. When sending cryptocurrency, you need to enter a wallet address. One wrong input and your cryptocurrency is lost forever, with no means to recover it. The only exception for asset recovery on the rare occasions when the blockchain network itself reverts to a previous state.
The ENS aims to solve this problem by doing for portfolio addresses what DNS has done for web page addresses. The key difference between ENS and DNS systems is architecture.
The ENS architecture is non-profit, decentralized and web3 friendly. It is also powered by the Ethereum network. Compared to DNS which is centralized and prone to attacks. ENS domain names are protected using smart contracts.
There are two main components to ENS: the registry and resolvers.
The registry is a smart contract that keeps a list of all domains and subdomains and stores three pieces of information about them. These are the domain owner, the domain resolver, and the recovery of expiration time for records in the domain.
This is how the registry can track a name to the responsible resolver.
Resolvers translate names into addresses in two steps. The first is to ask the registry which resolver is responsible for a particular name, and the second asks that particular resolver for the answer.
#2. ENS exists since 2017
This is technically true but does not understand the whole story. The ENS system described above has only existed since 2019, and this is the really impressive part of the ENS system and contributes significantly to its growth as a service in recent years.
While it’s true that ENS was launched in 2017, it was quickly taken offline due to two major flaws in its code. ENS was reactivated a couple of months later, in May of the same year, and sales of ENS domains resumed using a Vickery auction system.
According to a study conducted by a team of smart contract researchers, the Vickrey auction system was replaced in 2019 with the current ledger system mentioned earlier. In May 2020, names registered using the Vickrey auction system were set to automatically expire if no renewal fee was paid.
In addition to ditching the Vickery auction system, after the 2019 update, users had to pay an additional fee of $5 for names that were longer than six characters. Names under six characters did not incur taxes.
After the 2019 update, more well-known brands started buying registry names, such as NBA and eBay. The downside of trademark-related registered names is the phenomenon of domain squatting, a form of rent-seeking behavior in which users sit on a domain name that a specific brand will want and wait to receive commissions from that brand entering the market.
#3. ENS is the only blockchain name service
ENS services are not the only blockchain naming services on the block. A number of services such as Handshake and Namecoin have sustained competition with traditional DNS services for a variety of reasons. Some common ones are the centralized nature of current DNS services, DNS security issues, and transparency issues.
According to the
handshake white paper, the security associated with the commonly known green padlock symbol next to secure websites is only guaranteed by a handful of centralized DNS companies. This is an important security weakness best highlighted by some statistics.
According to a study by the Neustar International Security Council, 72% of organizations have experienced a DNS attack in the last twelve months. Google’s Threat Analysis Group (TAG) revealed the extent of a cyberattack imposed against them in 2017. This particular attack was a whopping 2.5 terabytes per second and came from 180,000 different servers, some of which 180,000 were DNS servers.
This clearly demonstrates the fact that DNS systems are a particularly lucrative target for potential attackers due to their centralized nature. DNS systems from the attacker’s perspective are a single point of failure that can be easily reached.
With this in mind, Handshake and other blockchain naming services (BNS) seek to solve some of the problems commonly associated with DNS systems by offering a decentralized alternative. For Handshake, this is achieved with a single point of consensus associated between names and certificates and cryptoeconomic incentives.
Concluding Thoughts: ENS Gives You a Taste of Web3
Features
While DNS and ENS (and by extension, BNS) share a function, the means of providing this function differ greatly.
DNS offers a
centralized Web2 version of the feature that comes with its own set of pros and cons, while ENS offers a decentralized Web3 version of the feature with a number of pros and cons as well.
The ENS has existed since 2017,
but only since 2019 has the ENS begun to gain adoption and popularity, to the point of overturning OpenSea as the main consumer of gas on the network. Finally, ENS is not the only SNB on the block. BNS systems of all stripes seek to provide a solution to the problems facing DNS systems today.