Hello ENS DAO,
(Note: If you are reading this then you are ENS DAO.)
These are big questions, with no perfect answers.
…but I am glad we are having this conversation!
Overall, I believe that Any domain system needs to include “domainers” as a constituency. Domainers (not squatters, scammers, or extortionists) are important constituents of a healthy domain name industry. Any system that hurts one class of users (domains) will ALSO hurt other users.
Yet, as the case of 3-4-charecter domains/names have higher costs…
…The situation we are presented with the 1-2-charecter domains/names is very special, as these are very rare, and we must carefully discuss and consider the potential hypotheticals. So nevertheless, the situation for 1-2-charecter domains/names will be different and we are part of this history.
Ultimately, I hope the end result is more usage and utility for the ENS network effect.
Here are some of my thoughts going into this:
Short answer yes-maybe, &
Long answer is maybe-maybe.
This question requires a careful consideration of the implications, which again I am glad we are having this conversation, as each decision will bring different scenarios.
One aspect to consider is the exclusivity of such names, with recent events the “x.eth” is a great example, but extends to “o.eth”.
It also extends to “aa.eth”, which can stand for:
- Alcoholics Anonymous
- American Airlines
- Austrian Airlines
- Academy Awards
- many well known others: AA - Definition by AcronymFinder
Releasing 1 and 2-character .eth names could generate a lot of interest and demand, as they are highly valuable due to this brevity and uniqueness. However, releasing them may lead to a concentration of valuable assets in the hands of a few, which might be seen as centralization or favoritism; again, which is why I am glad we are having this thoughtful conversation.
The answer to the question ultimately depends on the answer to the other questions, which the ENS DAO will ultimately decide.
As we make our decision trees, what are the procs and cons to these variables, including pricing or auctioning, which could lead to unintended consequences, or potential for abuse.
The bad answer:
Releasing 1 and 2-character .eth names could help generate revenue for further development and maintenance of the ENS, but this is not the priority, and funding is already sufficient. Due to this, we should be in no need to rush, at all.
The good answer, but it would take work:
More interestingly, it could attract prominent individuals and brands to use ENS/.eth, potentially increasing its adoption and utility with network effects.
This could also help bring significant attention and interest to the ENS ecosystem, (direct and indirect),…
…but additional resources would be required to gain the attention and interest from the proper audiences, and prominent companies and individuals.
SEE: My example for “aa.eth” parties, above.
I know many people may be very excited about this idea, as am I, yet, timing is crucial, and it should be done in a well-planned and thoughtful manner.
Consideration should be given to market demand, overall ecosystem growth, and community readiness. It’s all about the utility and the network effect; not hype or sales. And again, additional resources would be required to gain the attention and interest from the proper audiences, and prominent companies and individuals.
It’s important to avoid even any perceptions of rushing the release, as it may result in unintended consequences, which could be irreversible. Again, the end result is “more usage and utility” for the ENS protocol.
To be direct, I recommend:
- we talk and plan about it ~Q3/Q4 2023;
- build-out and test plans in ~Q1/Q2 2024;
- accept pre-release submissions ~Q3/Q4 2024;
- finalize & conclude everything in ~Q1/Q2 2025;
…this timeline could be rushed, if the will, resources, and collaborative plan come together.
The method of release is vital in determining accessibility and fairness. Auctions could be a viable option, as they allow the market to determine the value of these highly sought-after names.
Re: English Auctions
In English auction, the “price goes up” and is superior, since it gives the buyers additional chances to bid. The issues presented are mitigated from the Dutch auction, since in a Dutch auction, all users MUST be “aware and also have the immediate ability” to bid. (In other words, the Dutch auction only allows for a single bidder to be present and aware, while in contrast, the English auction allows for multiple bids in the face of potential loss.)
Re: Further, Dutch Auctions
Important: A Dutch auction could be considered, starting with a high price and gradually decreasing until a buyer is found, but again this approach is ONLY adequate IF all of the “proper audiences, and prominent companies and individuals” are aware of the Dutch auction.
For Example: If none of a “true owner” of an “AA” brand is unware of ENS or unprepared for the “aa.eth” Dutch-auction, then they would not themselves have the awareness or the proper planning to convert cash-to-eth, or even custody an ENS/NFT, etc. Which then, “aa.eth” name would more likely go to a speculator, (instead one of the many well known AA brand owners: AA - Definition by AcronymFinder, as intentioned.)
…which I know is the impossible Catch-22 of this post; and how we “prevent non-use”, and to instead prioritize, “benefit usage and utility”.
Determining the fees is critical to strike a balance between accessibility and sustainability. The fees should be reasonable to encourage adoption but also help cover maintenance costs.
Re: Harberger taxs
A Harberger tax, where name owners must continuously set a price at which others can buy their names, could be an interesting approach. It could ensure efficient allocation of valuable names, but the Harberger tax does also has some negative effects that should be considered, including:
- Chilling Effect on Investment (which is a potential benefit for some);
- Potential Inefficient Allocation of Resources;
- Unintended Consequences;
- Potential for Abuse;
- Disincentive for Cultural or Long-Term Projects;
I know even with its drawbacks, many argue the Harberger tax can promote efficient asset utilization, discourage hoarding, and create incentives for productive economic activities, but this does NOT just magically happen without considerations.
Striking the right balance and considering potential mitigations for its negative effects are essential when considering the adoption of the Harberger tax.
At present, I vote clear simplicity for Pricing:
Simply, I lean toward a much higher cost,
…based on the traditional system, IE:
- $10,000/year for 2-char; &
- $100,000/year for 1Char);
…but I reserve judgement as we continue this conversation.
The issue of withholding ENS names for well-known people or brands requires a thoughtful and transparent approach to ensure fairness and prevent misuse. The question also raises important considerations of fairness for use and utility, for everyone as a whole, (while preventing brand squatting, and maintaining sovereign Web3 values, to the best of our ability without hurting users in the end).
Some names associated with well-known people or brands, such as “x.eth”, could be reserved to avoid misuse or confusion,…
…but this get much more difficult with more popular names, including but not limited to as “aa.eth”.
The control and distribution of these names should be transparent and community-driven, avoiding any appearance of preferential treatment. We should also be careful of manipulation tactics, which are possible via the Internet, social media, and the Blockchain.
Here are some potential multi-part solutions:
Community-driven Decision Making: Establish a community-driven process to determine which names should be withheld and reserved for well-known individuals or brands. The decision-making process should involve key stakeholders, developers, users, and professional representatives from the ENS community. This could be done through on-chain governance mechanisms, where token holders or active participants have a say in the decision, although social voting is non-binding.
Submission Period: Implement a submission period during which individuals or brands can apply to have their names reserved; this voting can be done on behalf of brands for the brands consideration. This period should be publicly announced and open to all interested parties. During the submission period, applicants should provide a clear rationale for why their names deserve reservation, such as proof of trademark ownership or significant contributions to the community.
Clear Criteria: Define clear and transparent criteria for reserving names. The criteria could include trademark ownership, verifiable identity, demonstrated community contributions, or other relevant factors. Having objective criteria helps prevent arbitrary decisions and ensures a fair selection process, but this is another part of the process that requires input and verification from the open community.
Committee or Oversight: Establish a ENS DAO or Web3 committee or oversight body consisting of respected and trusted members from the professional decentralized and ENS community, (who have actually done stuff and don’t just talk about it). This committee can review the submitted applications, assess the eligibility of applicants, and make decisions on the reservation of names based on the predefined criteria, with all meeting and notes being made public and transparent.
Public Input and Feedback: Allow for public input and feedback during the decision-making process. This can be done through Discuss forums, social media channels, and/or on-chain voting to gather perspectives from the broader community and ensure transparency.
Limited Time Reservation: Consider imposing time-limited reservations on names to avoid indefinite monopolization. Reserved names could be released to the public after a certain period if they are not being actively used or maintained by the reserved party.
Transparency and Reporting: Again, all meeting, notes, and decisions would maintain transparency throughout the process by providing regular updates and reports on the reserved names, their usage, and the reasons behind each reservation.
By combining these solutions, the ENS community can ensure a fair and inclusive approach to withholding names for well-known people or brands, while doing our best to prevent any potential misuse or centralization of this temporally decision making process.
Anyways, ultimately, I am very glad we are having this community-wide discussion (involving key stakeholders, developers, users, and those invested) in the ENS ecosystem; It is essential.
Ensuring a transparent and inclusive decision-making process will lead to better outcomes for the overall growth and sustainability of the ENS.
I continue to appreciate our visible leadership, with ENS DAO and ENS protocol, progressing the “revolutionary, immutable, publicly-verifiable, collaboratively-based, open-everything, resistant-to-censorship, and decentralized” human-readable Web3-naming protocol!
Discussing the 1 and 2 character .eth names is a significant step forward! I hope they go to good use to end users that leverage them, while all of us exemplify the ENS constitutional and Web3 values.