If revenue ideas are required, there are ways to increase revenue without killing the already growing network effect and adoption. I think changing rules of the game, mid way, is devastating. Let’s try add on services that are ROI positive AND deliver value.
I suggest a few here for discussion later.
marketplace with a small fee
link with a merch provider, basically submit your ens name, it prints it on a hat, tshirt, etc. ENS basically is just the official portal or has a logo or something. Not much work to do here other than setup partnership. Make it clear funds help go to ENS doa, people will do it to support.
pfp generator (AI+++ version has a small fee) or basic one is free. Unlikely to be able to charge.
messaging service, one time fee to get on to a blockchain chat, don’t need to reinvent wheel. I think the messaging service creation in of itself is a good idea, to do for free, gain users, and then sell it for $ for doa.
I have not thought these through, but my main point was to say, if and when money becomes a problem, there are value added services I am sure we can explore first that people will pay for, without killing adoption, or taxing people for simply moving domains.
The goal typically of startups, is to grow the network effect, its so early, don’t do anything to kill it, basically, you want to add as many users as possible, this will help other apps build on ens and .eth. Once the network effect matures, you can look to monetize and really only if needed.
I am sort of neutral on this proposal. On one side, this is a great revenue opportunity to the DAO. However, I also question if ENS DAO should be extracting value from the secondary name transactions when the protocol and community are trying to stay neutral from the secondary market activity (ie: not supporting ENS secondary marketplace development, discouraging the talk about name trading on our discord server).
If we allow extracting fee from secondary market just to sustain the operation of DAO, then the same debate goes into charging fee on the creation of subdomain and non .eth domains (which I do not support). Maybe revise this option when the primary name registration number start dropping due to all meaningful .eth names taken up and the DAO start losing .eth revenue enough to sustain the DAO operation?
Your points above are very fair, and I’d be happy to revisit this when there’s a financial need. My immediate concern wasn’t actually bringing in revenue so much as adding a revenue stream to reduce risk.
I like to be proactive, which is why I proposed this before there’s a financial need for it. In my experience ones options are often much more limited when it gets to that point.
Personally, I found the argument that trading fees affect secondary market participants but not people buying a name on primary very compelling. It’s useful to think of this as a balance between primary and secondary fees, rather than imposing a secondary market fee independently, and in that context I think it makes a lot of sense to put more costs on the secondary market and less on the primary.
That also makes sense given how much time is spent on support for problems specific to name traders:
“I’m having problems with OpenSea”
“Why doesn’t my incredibly unusual combination of unicode symbols work as expected”
“Help! I bought a name yesterday and it’s expired!”
Name traders purposely register and renew for as little time as possible (often days to a week, using fractions of a year) whereas regular users mostly don’t and are instead negatively affected by these practices.
The end result being that we spend far more time helping those users than regular users, while they’re introducing more problems into the eco-system and contributing less via registration and renewal fees.
I completely agree with your points here, but it begs the question as to why you are supporting secondary market users? I see no obvious reason why you would/should be obliged to support anyone especially users of third party services.
ENS is only useful when it’s integrated with third party wallets, dapps, and marketplaces, so there are certain support responsibilities if ENS are not functioning as expected on their sites (though majority of case, we do redirect to their support team). Because many user encounter ENS via OpenSea, we have large volume of support tickets related to OpenSea. I haven’t done the support work myself for a while so I missed the significance of the support cost and I thank a lot to @cthulu.eth and other support mods for their tireless work.
What I can read from the data is that primary market has twice bigger than the secondary market in terms of trading volume though the secondary market has 10x more volume in USD term.
One thing to consider is there are a number of NFT projects that are looking to develop NFT (art) but also buy the their project .eth domain and then subdomain for their users and also have those move along with the art NFT and those will need to be transferred.
There are people working on having a .eth being an entry for a gated community, such as a chat forum or a live event such as music, etc. So these will need to be transferred at some point later. Creating friction on these transfers will impact adoption and of course reduce resales.
If you think of some ideas around ticket sales, artists subdomain groups, live events, and other ways to use a memorable public ledger or gated access, impacting the free flow of transfers can impact these potential pie in the sky ideas that would like bring in more users than funds in secondary sales.
I think the goal should be to try to get new users and use cases, so users come in and fees on registrations and renewals come in. Once the industry matures and use cases are mature and developed, its easier to add a secondary fee.
Plus, while secondary sales are high now, you just never know how things will play out and I’m not sure this will continue forever, it could just end up being a fad and getting to more normal or low level secondary sales once a lot of fads play out.
This proposal wouldn’t affect subdomains. Your earlier point about the network effect is something I’m thinking a lot about currently, and also reading up on.
This is great! I’d be very curious to see how this relationship would change if the minimum registration length is capped at 1 year. I currently see most name traders renew for just fractions of a year (days or weeks) at a time.
This clearly shows that recent hoaders tend to register a lot shorter period especially anyone registering for less than 1 year , which shows on the second chart for addresses registering more than 25 names in the last 7 days period.
Yes, was ENS always wanting to give the option to be less than a year? Many people don’t know if this is a feature or a bug from ENS?
If you are registering a new domain, if given the option to pay in quarterly increments at no additional cost to the user, purely from an expected value and economic perspective, there is no downside to registering for less, the only cost is the hassle of having to renew it.
If this was a bug, then it can be fixed pretty easily.
Makes sense, probably should be expanded a bit so less squatting. That being said, I think it encourages more speculation (which I know generally is frowned upon), community building at low cost, and tests of the same (think of it like a low cost trial or reducing friction), and the proof comes to shove in about 6 months anyway when its time to pay for everyone. Much of the spec will die anyway in 6 months to a year. Feels like this gives extra revenue to ENS at the cost of some people guessing for 3-6 months. I think it should be expanded as well maybe 3-6 months min.
There’s an important aspect of community/DAO culture to this which should not be overlooked.
We ‘ENS Time Keepers’ [aka 24hClub] have been working on producing a grant proposal to fund the next phase of the 24hClub through the DAO treasury. If we’re not funded via the ENS DAO, we’ll repurpose the proposal to pursue VC funding. Signvm has partners that may potentially wish to purchase ads on the ENSclock.com / ENSclock.eth.limo. But the community requires more centralized structure to act on commercial opportunities. We want to register the domain for 1,000 years and issue soulbound subdomains to manage the content with a hybrid / semi-centralized approach. As I was considering the alignment of incentives, I realized for the first time that ENS DAO presently receives 0% royalty on secondary sales. So, some of the things I was excited about concerning volume, may be interesting data points for the stewards of the DAO… but not directly economically beneficial to the ENS DAO community. From my perspective, the proposal to impose a modest royalty on secondary sales of ENS has great potential to align incentives between the ENS DAO governance & stewardship community and the grassroots marketing phenomenon we’ve simply been denoting as the, “ENS summer”.
Perhaps it would be best to structure the % of secondary sales as a fixed annual USD amount necessary to maintain TNL, the ENS core protocol, & cover DAO community expenses. Any excess can be directly returned to ENS token &/or domain holders. Try rewarding us domainers with ENS tokens and encourage us to vote. We’ll do it if the incentive makes sense. At the moment it’s not realistic to expect domainers to buy into ENS governance token when there’s so many grails waiting to be registered. Not enough liquidity in the world for all these bangers, so from a cultural perspective, it’s difficult to envision domainers investing very heavily in ENS governance token. IMO we need to examine tokenomics and distribution of ENS token to understand why the adoption of and interest in the ENS governance token seems to pale in comparison to the volume we’re seeing in the in the .eth market.
