Attack vectors: This is an issue; if it is possible for an attacker to steal a lot of money by only holding the ENS name for a very short period this is potentially quite bad for this system. I am unfamiliar with, well, everything about ENS, but in particular what the primary users and uses are, so if someone could explain that briefly or link me to a primer or something, that would be very useful.
A deterrant to this kind of attack would be, actually, making the holding period longer. For example, suppose we made the holding period/time between auctions 2 weeks or a month. An attacker could make a high bid, take a ENS and steal money from it, but would have to hold on to it for a while, and pay a fair amount of taxes, before they could re-sell in the next reallocation event. It’s actually easier to buy, steal, and sell if the holding period is shorter.
Again, my institutional knowledge is sorely lacking, but it seems like the economic time horizon on which optimal reallocation occurs in this setting is, like, on the order of weeks or months. So that’s approximately the frequency at which we should run these reallocation auctions.
Think about this. We want to trade off the benefits of efficient, frequent reallocation with the costs that auctions too often are susceptible to the kinds of “trolling attacks” you talk about. Suppose a dev works on some application for a month or two. It’s largely fine it they have to wait two weeks or so to buy the ENS they need. Six months or a year is probably too long for this kind of thing. Higher reallocation frequencies would have relatively more limited benefits, and would potentially facilitate the kinds of trolling attacks/theft you point out.