Why would this be a bad thing?
Even if you think that itâs a good idea, I think it should be something that the DAO votes on, rather than at the discretion of a few people.
For example, maybe it can happen this way:
- âUnsavoryâ nameâs grace period ends
- A social proposal is made to the DAO to decide whether the name is âunsavoryâ, and register the name in the auction then burn it
- If it passes, then the Ecosystem Working Group takes that action
So the working group would still have those funds allocated, but the stewards agree to require a DAO vote before it purchases any names out of auction. If the stewards act without the agreed-upon vote, then theyâve broken the social contract, and the community can vote down future funding proposals.
I think at first it seems like a good thing, and is easy to decide with overly explicit names, but it becomes difficult when you enter grey areas, words that may be offensive to some people or cultures, but are not for others.
Now you have to have an entire system setup for who decides which names should be removed and which should not, creating a sort of policing mechanism.
This idea will probably also introduce a lot of bias, either cultural or political. If we wish to remain neutral as a DAO, it seems policing is not a path we should venture down.
Great thread by tjlarkin.eth (@TJLarkin23) on twitter articulating reasons against this path:
Quoting his thread here with his permission.
My take on the ENS DAO wanting to buy/gift names to brands and celebs:
While Iâm certain that this is being done with the best intentions and with the ENS ecosystemâs best interests at heart, it would be a massive mistake.
Let me explain.
The #1 reason I believe ENS has grown as big as it has, and is 200x bigger than its nearest competitor, is because of the complete freedom in all respects.
All names were available with zero restrictions.
Only pricing differences are based on character count, and thatâs it.
Minting house.eth cost the exact same as ef48b.eth.
Zero restrictions on the ability to mint brand names or celeb names.This allowed early adopters thinking long-term to invest in the ecosystem by buying up great names of all kinds knowing they may be valuable later.
This excitement then grows to others who find out about this opportunity.
Itâs a perfect flywheel to create engagement and trading, making the protocol more useful, valuable, and well know.
This is not the case with Unstoppable Domains, who âreserveâ brand/celeb names (and then charge them a ton to release to them).
Or great names, which they charge 4-5 figures directly for.
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When the parent company/DAO holds back names or charges a premium directly for them, it essentially eliminates the potential for an exciting and worthwhile aftermarket.
While ENS as a protocol has many things going for it outside of this issue, it wouldnât be where it is today without this complete freedom.
So now the DAO is considering âbuyingâ domains that have expired that are brand names or high-profile peopleâs names.
This has all kinds of problems, some obvious and immediate, and others that are unforeseen.First issue; saying theyâre âbuyingâ them is semantics.
If they pay $1,000 for something through the system, that money is routed directly back into the same account, and theyâre out nothing.
So it really is the ability to take names off the expiry list and put them in the DAOâs wallet.
With essentially no cap because theyâd get the money back immediately.
This means theyâd have the unfettered ability to pick up any name they want at any time.The second and most obvious issue; is who determines what counts as a brand or celebrity name.
If gates.eth came up, would that count so they could give it to Bill Gates? What about the hundreds of thousands of other people with that last name?
They lose the ability to get their name because a richer guy has it?
trinity.eth, would that get pulled to go to Trinity Industries, a Fortune 500 company? Iâm certain millions of people would want that domain for good reasons outside of it being a company name.
So these are obvious issues that would be extremely hard to deal with, even if you think itâs a good idea.But then you get into the moral hazard issues.
Who is deciding on which names? Could the people deciding be benefiting?
Then you get into the slippery slope issues with this.The complete freedom and lack of interference by the DAO got us where we are.
By changing that once, for a âgood reasonâ, whatâs the next âgood reasonâ theyâll interfere for?
Once you set a precedent, things start to grow and become something that wasnât intended.Nick had brought up in the recent past the idea of changing the DAO in relation to âoffensiveâ names.
Most of us used the same argument Iâm making here.
It may sound good, but it will get going and get bigger once you start down that path.The original decision may not have a massive impact, but the second and third-order effects of the first decision will.
Letâs also acknowledge there are legitimate issues with how things are done now.We want mass adoption, and many brand/celeb names are held by people in the community who wonât sell for a reasonable price.
This means we canât onboard them, which would be great for more adoption
To me, there is no perfect solution. There will be problems either way, and there is no escaping that.The question is, which problems are better for the systemâs health as we advance?
To me, not changing anything in this manner is much better, with much lower downside risk.The DAO idea sounds great and may have some marginal positives come out of it, but would have massive downside risks that are difficult to account for currently.
TLDR;â˘DAO wants to âbuyâ expiring names and gift them to brands/celebs
â˘Goal is to help onboard them to create mass adoption
â˘I see short-term problems with how to make these decisions and conflicts of interest
â˘Also see massive unforeseen problems due to DAO interference
Let me know your thoughts and what I might be missing.I fully acknowledge this is a complicated issue and could have some of it wrong.
Good news, I think weâre all on the same page regarding the goal.
Letâs figure out how to make it happen!
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I donât believe this was ever discussed as a priority for the DAO by any the working groups. Do you have a link where it was?
Let me start by saying that granting ENS Fairy this amount is fine with me, I voted for the proposal to pass. I think itâs worth experimenting with different ways to allocate Treasury funds. The proposal passed I believe but I still wanted to add some comments regarding this in hopes of better understanding the whole situation.
I also believe this is done with the best intentions by the DAO. However, I think gifting a celebrity something and them buying it themselves doesnât has the same marketing effect. Celebrities get shit for free. Thatâs nothing new. But if they decide to spend thousands of dollars on something, that causes people to look into it and draws attention.
An example is the BAYC. I donât think anyone would bat an eye if Eminem and Justin Bieber were gifted their BAYCs. Instead, they spent ridiculous amounts of money for one (which they can afford!) and people went crazy and now everyone knows about BAYC. I know weâre far from what BAYC is, but the argument given is that weâll use it for promotion and I believe them spending money themselves will bring more eyes.
The second thing there that causes this backlash I believe is that if ENS Fairy gets to register names from the DAO funds, and if Iâm someone whoâs looking to buy names so I can resell them, I basically have no chance of outbidding the DAO if the DAO likes some name. So now instead of some lucky guy getting those thousands of dollars from celebrities, and maybe even meeting them who knows, they would get it for free, not even DAO makes money. So weâre essentially saving rich people from spending money in hopes of some promotion. We are a strong enough protocol that will make them come alone, we donât need to give them stuff for free. We are big due to the product quality and strength of the community. And this doesnât work in favor of that same community I believe.
Iâm playing the devilâs advocate here, I donât trade names, nor do I plan to. And I do genuinely hope Iâm wrong about this and this turns out to be a positive thing and a good initiative. But I just know a lot of people who make a living selling names and they take it seriously. And itâs those people who collectively and for that specific reason generated our big treasury.
Because the word âfuckâ was used 569 times in Wolf of Wall Street, 392 times in Straight out of Compton, 300 times in Goodfellas, 255 times in Pulp Fiction, and 250 times in Big Lebowski. The world likes it And that word is not missing from any heated discussions (even within the ENS DAO and Twitter spaces) and is connected with more honesty in speaking. Itâs not necessarily bad everything that has the potential to offend someone I think.
No, it doesnât. Names are still auctioned off starting at $100m. If someone values the name more than the ENS Fairy pod, they will get the name. The funding of the initiative is limited to the funding requested.
Fair opportunity in the context pictured means that the auction will actually start, rather than snipers paying miners thousands of dollars to register a name before an auction is able to start (which was happening in December 2021).
This initiative is not related to defensively registering âunsavouryâ names. However, the DAO could very well vote to fund this specific type of initiative. The ENS Fairy initiative is intended to register names on temporary premium that could have a meaningful impact on ENS adoption.
The names that will be registered are names where there is likely one natural owner. For instance, an artistâs stage name that they made famous or the âfirst-and-last-name.ethâ of a notable personality or sportsperson (e.g. billgates.eth, not bill.eth or gates.eth), or an internationally recognised brand or trademark (e.g. google.eth).
The parameters of the initiative have not yet been set. It would be useful to receive feedback on the sorts of names that could/should be covered under the initiative. The maximum spend per name might be another parameter set by Stewards. In reality, a large majority of the names in question might be registered for less than 5 ETH. Further, it might start with the limited scope of web3-related names, rather than going after people/orgs with no context for an ENS name.
There will be complete transparency â every name registered as part of this initiative will be disclosed, along with the registration price. The outcomes of each name registration will be measured against the relative cost to the DAO.
While there are many differing opinions about whether this is a good strategy, I donât see any drawbacks to trying this and seeing how this particular strategy goes. If the initiative does not lead to the desired outcomes, it wonât be funded in the future.
Why is this proposal being discussed now?
Is there an uptick in interest from big brands, celebrities or people of interest?
Is it part of marketing strategy?
Or are we doing some housekeeping and creating an expense line in the pnl?
Alisha, I think your response is missing the main issue here.
The idea that the DAO can snipe names at no expense, I think is the key moral qualm.
It does bypass this feature. This dutch auction system allows fair competition because of the cost to the individual (the premium). This initiative bypasses that cost, because the money goes back to the wallet it came from.
Although this proposal only allocates ~$320,000 - the sum is not the issue here. Itâs the fact that the money is meaningless, as it just goes directly back to the DAO.
The only limitation is of course the funding cap.
ENSFairy can pay a price for names that is much higher than others would pay, because the money is going back to the DAO.
This is basically an infinite money glitch for the DAO, as it doesnât cost the DAO anything
I like this idea floated by @serenae, where we solve this issue by introducing a cost to the DAO by way of charity:
Donât allow the funds to effectively be funneled back into the DAO. If such a purchase is made, then the DAO could decide to donate the same amount to a charity or public good. So the DAO would not be able to do this for âfreeâ ad infinitum.
I think we would need to be careful with this, in that it still needs to feel like a cost to the DAO. Because if youâre for example planning on giving money to charity, why not funnel it through ENSFairy first to pickup names at no cost, then donate it.
Iâm curious what you think about this idea @alisha.eth @nick.eth
Working groups are not the DAO. Working groups are funded by the DAO, but they are not the DAO.
No, it doesnât. Names still go to auction, and everyone still has a chance to acquire the names.
Itâs not free ad infinitum. As explained, the amount of money behind this initiative is restricted to funds that are approved by the DAO each term. There are four funding windows in a year, and funds requested for this initiative will likely be made in two of the four windows if this initiative is successful.
It does cost the DAO something â the opportunity cost of this initiative is that the DAO misses out on registration fees from the names that are registered as part of this initiative.
You can make this argument. But I donât believe there are any other instances where money allocated to working groups circulates directly back to the DAO?
This is the main issue here. If you take some time to look through the discussions on twitter, this is what everyone is up in arms about.
Thanks for bringing this up, I genuinely had not thought through this. It took some thought to wrap my head around what this means. This is the example I worked with to understand this idea.
I think you may have changed my mind with this
Setting:
google.eth is expired, and in temporary premium at $100,000
Scenario 1:
The ENS DAO (by proxy of ENSFairy) buys this domain, there will be effectively 0 upfront cost as theyâre using recycled money.
Scenario 2:
The domain was not registered by the DAO, the user chad.squatter.eth registers google.eth a few hours later for $80,000.
This $80,000 premium fee goes to the DAO.
By the DAO deciding to register google.eth in Scenario 1, they have sacrificed the revenue ($80,000) in Scenario 2.
This is effectively their cost, $80,000 to register google.eth
The DAO now has $80,000 less because they registered google.eth
This price can never be known. The true cost to the DAO for the domain cannot be known, because no one knows what chad.squatter.eth or any other user would pay until they have paid. But this is just an inconvenience, unless there are so many registrations that it starts to hurt the ENS DAOâs revenue.
Thanks @alisha.eth and @sat, it is a very good point. The DAO registering a name means 0 revenue, versus nonzero revenue for someone else registering it. And itâs true that itâs not âfree ad infinitumâ because there is a cap on funding.
Alisha also made the same point that I made above, that this is funding for just one term. The community can weigh the outcomes and decide to vote down such funding in the next term, if they want.
Can someone please provide a list of names that they think should be âfairedâ, including examples from all intended use cases.
You basically hit every point I wanted to make. As long as this mechanism is used for names which clearly define an established identity, and the names are disclosed, this seems like a great experiment â especially for bringing someone new into the ENS/Ethereum ecosystem.
Many commenters on Twitter seem unaware that a name in premium is a neglected registration. The intersection of (neglected registrations) and (names which ENSFairy should claim with DAO funds) should be small.
This mechanism should not be used for claiming names that fall into an existing, well-defined ENS name category, like 999, , or any common first name.
Agreed, a list of names from the last 6-12 mos that would of been targeted by this method should be the next step.
A million is insaine is there a happy meduim?
I addressed your question in the Ecosystem WG meeting. There is a list of specific names. but publicizing the names would compromise the ability to acquire them.
It is an exponential function that rapidly declines.
$100M is not enough either. There are many domains worth more than that (google.com, etc). We should expect similar value creation on top of .eth domains which are a superior technology than DNS.
The current renewal curve is well designed as it is the third version I believe. Two linear versions followed by the exponential implementation.
A bit of interesting game theory for sure, but we still need to see a sample set.
Request that this thread be closed. Forward any continued conversation to this temp check thread.