The ENS team’s been discussing a number of open questions introduced here. Here are our proposals for -
- The use of overflow funds
- Implementing fees and rent
- The window between permanent registrar deployment and 3-6 character auction start
There’s also an ongoing discussion about reserving short names. That discussion’s happening here.
1. Overflow Funds -
For now, we propose that the ENS multisig holds all funds received. Nick’s spoken with Ethereum Foundation attorneys about potential tax implications. Holding the funds in the multisig won’t trigger a tax event, until the multisig transfers funds to an entity.
A tax event gets triggered when the multisig transfers the funds. The happens regardless of the ultimate recipient.
The funds are then counted as income for the “owner” of the multisig wallet. The “owner” must be designated in advance of the transfer.
It’s likely the designated “owner” would be True Names LTD. In this case, True Names LTD would become liable for paying taxes on the funds transferred from the multisig wallet.
This proposal gives us time to continue discussing how to use these funds. It also allows us to move forward with the implementation and stick to our planned timeline.
The approach will also provide insight into whether excess funds are even collected. If they are, we’ll also know approximately how much overflow exists.
We feel this approach provides us with more information to make a better decision, while introducing a negligible amount of risk.
2. Fees and Rent -
We propose a sliding fee scale, based on name length. As the number of characters decreases, the number of available names does too.
For example, there are only 26^3 = 17,576 3 character latin-alphabet names. Shorter names are likely to be more valuable than longer names, due to their relative scarcity.
The proposed sliding fee scale is -
3 characters - $640/year
4 characters - $160/year
5+ characters - $5/year
We propose the fee is paid in ETH. The ETH/USD exchange rate will initially be set using the DAI oracle. The oracle may change, if this becomes necessary in the future.
3. Window Between Permanent Registrar Deployment and 3-6 Character Auction Start -
We propose to target a 60 day window between the permanent registrar deployment and 3-6 character auction start.
60 days provides time for the permanent registrar deployment to settle. It also gives the ENS team a reasonable window to finish the Auction work.
We look forward to continuing the discussion in the comments