ENS DAO Endorsement of Sub-Domains in Organizational Entities as a Source of Revenue

ENS DAO Endorsement of Sub-Domains as an Organizational Entity

Yesterday during the Twitter space office hours there seemed to be a few inquiries about sub-domains and fees involved. This sparked some thought in the noggin.

Current State of ENS DAO and Community Vision

Sub-domains are speculated to be very popular under institutional, organization or groups holding .eth TLD names. This will provide a source of revenue on top of registration costs for the TLD .eth holder. These (expected) fees can also be a new source of revenue for the DAO (and hopefully in the far future), when consistent name registrations start to slow down.

As of right now, we all expect the ecosystem to continue adoption across other areas of web3, and developers attached to ORG ENS TLD will be deploying their own customized contracts alongside the sub-domain name wrapper contract.

An Important Thinking Point For Adoption
Looking forward from an organizational standpoint, speculation of considerable mass growth is very probable. With expansion and adoption as a goal, we should always consider the idea of trust on the internet and web 3. End-users want to feel a degree of that trust in a form verified authenticity. Implementing an instance of verification or approval by an entity (ENS) that oversees the service that the said entity (ORG ENS TLD) is using. Trust through authentication and approval is imperative to continue adoption in this space on a platform and service level as well for continuance use of the utility that ENS provides for the end-users.

CASE:
A new exchange emerges and decides that integrating and extending their ORG ENS TLD to its users with subdomains.

user.exchange.eth

The user may not know what ENS is and decides it’s not for them and moves on.
Now lets think about what problems ENS as a service solves for an end user.
Just a couple for example:

Identity - the ability to easily recognize transactions they made on a blockchain ledger
Security - reduces the risk of making an error in when typing the address of another user who also doesn’t use ENS
Ideal Achievement

Implementation of authenticated and audited supplemental contracts that are deployed alongside official ENS deployed contracts could assure trust in users who are not familiar with ENS as an entity. If one user, like in the above example can be onboarded with a seal of approval, prevention of incidents like the accidental mistyping an address and submitting a wrong transaction resulting in a loss of funds, is what I would consider a success of ENS utility as a service for public good.

Mechanism
When ORG ENS TLDs decide to implement a contract that requires a fee to register a sub-domain along with their supplementary smart contracts, those contracts should require an audit by either a contracted third party audit team selected by ENS DAO or internally by ENS DAO members funded by TNL, ENS grants or other institutions that provide grants like GitCoin, or even a ENS team that falls under the Protocol Guild.

Fees that will then be owed to the DAO for authentication and approval of contracts could be implemented through an ENS smart contract which would also function as primary mechanism to receive registrant fees. The smart contract then could outline a system that would set registration fees based on number of sub-domain registrants in separate tiers.

Tier A - 1-500 sub-domain registrants
Tier B - 501-2500 sub-domain registrants
Tier C - 2501 - + sub-domain registrants

(numbers are placeholder)

This would call for an organizational level sub-domain contract wrapper. When a user registers a sub-domain under the ORG ENS TLD the fee would then be calculated based on current number of registrants attached to the ORG ENS TLD. This would mean, as the number of registrants under the ORG ENS TLD grows, the portion of the registration fee that comes to the DAO also increases. Fees can vary depending on ORG.

When a user registers a sub-domain under the ORG ENS TLD contract they will also receive an ERC token or even potentially a soulbound token that will include data like:
Date of registration, length of registration, assumed roles, rights or privileges’ under the ORG ENS TLD, a new way to store on chain activity like voting history, attendance or even store data that measures user contribution.

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This is inaccurate today, fwiw. There are no fees in the protocol for registering subdomains. Any fees assessed by the domain owner for their subdomains do not go to ENS DAO.

I don’t think ENS DAO needs to be involved at all in people’s subdomain spaces. Those belong to them, no reason to extract rent as the DAO.

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it’s neither accurate nor in accurate. This is not a reflection of current ENS mechanisms.

I suppose that you have changed your perspective? @carlosdp

I don’t know what perspective you’re referring to, you’ll have to be more specific :sweat_smile:

As for the other replies, one of which you deleted, I suppose maybe I’m misunderstanding your original post? Perhaps I was confused as, even in the title, it’s implied you are suggesting ENS DAO itself should see “Sub-Domains in Organizational Entities as a Source of Revenue,” (maybe idk what you mean by “Endorse”?), and what I’m just trying to make clear to passerby’s, that perhaps misread it as I did, is:

a) Today, subdomains are entirely owned and operated by the .eth holders, ENS DAO has no control of them or sees any revenue of them (if that wasn’t meant to be implied, my apologies, that’s what I was reading from the “Current State” section.
b) I don’t think ENS DAO should ever try and tap into revenue in those subdomains, I think it would erode the “credible neutrality” of the protocol and the DAO

That’s all! If that’s not what you meant, then I’m sorry if my reply came off as standoffish.

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Yeah, I was having a difficult time wrapping my head around the nature of your response. I have been thinking about how I wanted to respond to your reply. I am just going to be straight-forward and speak my thoughts.
I would appreciate the constructive feedback. Especially since it is–again; neither accurate or inaccurate.

Again, I want to reiterate that my post is not of any certain or specific reflection on the current state of ENS subdomains. I’m not sure how you have decided that what I have outlined is inaccurate. While including inaccuracy it is also not accurate. It’s simply an idea that could be discussed for the possibility of implementation in the future. Yes there is the “current state” section but I believe that outlines the current state of speculative confidence in the system moving forward rather that “this data, fact is xyz” etc,

For what it’s worth translates into “I don’t value this information and I find it to be useless and irrelevant”.

The phrase rent extraction is colloquial and represents the idea of instilling policy on a persons residing or actively participating in a jurisdictional state that is either an obvious corruption injection solely for monetary gain. Within that idea; the mechanism and methods used are enforced by carefully crafted rules and guidelines that prevent the person(s) who are subjected by said policy or doctrine, have no other choice but only to abide by those rulesets. This would include attempting to dismantle the enforcement by petitioning the subjection of disenfranchisement or by a cause of unfairness. I believe that is a great explanation of its colloquial etymology.

We all have different voices both internally and externally and I understand that. But I’d prefer my ideas to not be correlated to such a corruptive undertone.

My post maybe could uses some brushing up, I may have rushed it. But it explores the idea implementing a team or process that would authenticate, approve and audit the contracts that will be supplementary to official ENS deployed contracts.

This will act as mechanism to achieve the following:

Evaluating the proper use of contract functions

Ensuring that public view of contracts are verified on chain and accessible and readily available for

  1. viewing and evaluating

  2. establishing an entrusted seal of approval by audit

  3. continuance in practicing the principles of true decentralization by open-source transparency

Prevent any contracts that incorporate ENS namespace functionality from malicious intent. (i.e, exploitation, credential hijacking etc.)

Achieving the adoption and consistent utilization of the ENS namespace through current and future technologies, globally.

The most important aspect of decentralization is ensuring the open-source transparency and trust is extended to the subsequent entity that is building on top of the protocol. If we can not ensure the above items are reflecting those transparent decentralized principles, the the standards that shape decentralization will ultimately diminish over time. I think there is a common notion that decentralization will ultimately be 100% autonomous. I honestly don’t think that will be the case with regards to sub-domains.

When the sub-domain wrapper contract is officially put to use on the blockchain, developers will be pushing their own contracts along with it. Realistically, they can do what ever they want with their customized smart contracts. Since we havn’t seen how those contracts will be used with official ENS contracts, we don’t know what to expect. This is truly a critical moment for ENS’s proof to stand true to it’s word and uphold the reputation it has earned.

I believe it is imperative that we implement agency of endorsement. What would happen if some supplemental contacts are exploited from the use of another contract and compromises lets say 10,000 ENS names and their subsequent wallets? Who is to blame? How would we approach that subject ?. Again putting an audit team over larger organizations who plan to or already have achieved hundreds or thousands of sub-domain registrations with a seal of approval might be something to think about. Like I said above, we need to extend the standards ENS is providing in the wrapper contract with their supplemental contracts.

This isn’t about control, being big brother or oversight for the sake of. This is about attempting to prevent any sort of failure points. I’m not saying any contracts or on chain events contain that possibility. There is a lot at risk by many people and we should be doing everything we can continue being one step ahead. I’m confused how you aren’t in favor of this sort of thing. You have have already suggested this mechanism be put in place
on this post about scams with ENS Subdomains

That being said, brings up another point. Revenue.

This is a bold statement and I hope it becomes true. Is there a justification that I am not seeing for looking past the importance of extending continuous support of ensuring that organizations implementing subdomain use onto their users meets ENS and TNL quality assurance for the security and trust of future registrants? You said it best about the billions of users. That statement itself is worth at least a billion dollars figuring just $1.00 USD per subdomain. The revenue stream to keep ENS afloat for a long long time is right there in front of us. I’m not sure why we are planning to take the extremely risky Endaoment route. Don’t get me wrong, I think it’s a fabulous idea but allowing ENS to mature for a decent amount of time after implementing a guaranteed source of revenue for continuous operations should be the number one priority right now.

A lot of you have put much work into this project before I decided to participate in these discussions and I value that and I am appreciative of how this became what it is today. I suggest that for those who that applies to—may you ask yourself: Are you 100% sure that putting a good chunk of those total assets earned into a extremely volatile and unpredictable cryptocurrency economy; given the level of fear and uncertainty with all the talk of recession and possible instability across markets, globally is 100% without a doubt the best decision we as a DAO could do? Not only that, we are without a doubt going to see regulations of that afaik, nobody really has came out and openly presented solid foundations to on a global and a respective nation level.

I’m not seeing why ENS shouldn’t be involved in the sub-domain dealings. For the amount of speculative bullish ideology that is common on social platforms this is a very secure and predictively guaranteed stream of revenue to keep operations running and continuance of support within the ecosystem. Let’s trust that everything will pan out with organizational sub-domain issuance. But we should also continue to verify. Decentralization does not mean zero oversight. Given the value of sub-domains-- as they are also a marketing tool for organizations, the organization responsible for issuing the name extensions may be willing to return $1.00, $2.00, $3.00 or more per name as a advertising expense per name. (numbers are placeHODLer only)

I’m going to reinforce that there is simply not much of a difference in a fee at the sub-domain level comparing to the TLD namespace or username registration fee. A name is a name that is registered through the protocol of which provides it’s service to. By the model of all fees for subdomains are at the control of the issuing entity will ultimately to cause a negative cashflow over a period of time.

lets make use of this hypothetical–that ENS is just a pool of ten (10) registered domains

*pacific.eth atlantic.eth artic.eth baltic.eth indian.eth*

*bering.eth arabian.eth coral.eth caspian.eth adriatic.eth*

pacific.eth atlantic.eth artic.eth baltic.eth indian.eth
– are single user domain names and all have registered for (1) year at the price of $1.00

bering.eth arabian.eth
– are single user domain names and all have registered for (4) year at the price of $4.00

coral.eth caspian.eth adriatic.eth
– are TLD sub-domain issuers and all have registered for (10) year at the price of $10.00

now we have a total of $15.00 revenue

pacific.eth --forgets to renew and decides that it doesn’t fit their budget
atlantic.eth --artic.eth baltic.eth decide to go and get a free domain instead of renewing**
Indian.eth ** --registers for another year

now we are at a projected revenue of $1.00 (+/-) to support operations for a year.
we are now waiting for that 4 and 10 year mark to see potential revenue again and the hedge didn’t work out as imagined and lost 10% instead of gaining the 4% we hoped

This is just absolute microscale of how easily what we speculate to be guaranteed revenue, could get out of hand. Again total micro model, not any expected outcome and shouldn’t be used in any official capactiy, NFA

ENS is also a public good and we are not responsible for being the funding mechanism for every other public good on as well. We should see no problem with the application layer platforms who are exposed to the high returns contribute to the funding our protocol as a public good contribution either. It should really go both ways, and we shouldn’t be afraid to ask either…everyone else is asking.

food for thought…

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