3-4 characters must have renewal at a max $50/y and $20/y. Even that would be high, but could go through.
Anything above is killing ENS.
Check .cars. A great new gTLD, but dead because of the registration/renewal fee of $2,400/year.
There is no healthy domain space with unregistered 3Ls and even 3-characters.
Out of 17576 3Ls, there are about 9000 available/premium/grace. The majority of those 9000 is available to reg and the number is growing, although the real renewal season is yet to come.
My suggestion is that ENS DAO should announce that the renewal fee for 3/4 characters will be no higher than $50/y and $20/y, from 01.01.2024. That should be announced ASAP, at the ens.domains app above the registration field and all over the Crypto Twitter.
I don’t understand why ENS DAO is so greedy and blind. Let’s do some math:
Soon we will have no more than 5000 registered 3Ls (maybe even less). With the current renewal price, that is $3,200,000/year from renewal fees for ENS DAO.
Lets say there are 20000 currently registered 4Ls. That currently yields $3,200,000
So, 3Ls + 4Ls currently yield approx $6,400,000/y (or it will soon, as the number of registered 3Ls-4Ls is rapidly dropping).
If we would have 17576 registered 3Ls (I am 100% sure it would be the case with a renewal fee of a max $50/y) then ENS DAO would be getting $878,800/year.
There is about 50000 3-character domains in total (could be wrong as I don’t know how to calculate emojis etc). If the renewal would be no higher than $50/y we would have all 3Ls registered and at least 10000 other 3-characters registered, so ENS DAO would be getting at least $1,378,800/y)
Within a year we would have all 4Ls registered and many other 4-characters registered. Let’s say we have just 4Ls registered. That would be 456976. That means it would yield $9,139,520/y.
I will not count other 4-character regs now.
So, only with 3Ls and 4Ls registered (only under the condition that the renewal is lowered), ENS DAO would be getting $10,000,000/year, compared to a current approx of $6,400,00.
Again, by executing my suggestion, it would be $10,000,000/year for ENS DAO compared to $6,400,000/y.
Not just that the difference is almost $4,000,000, but it would be the best marketing move as well, and for free! There would be a lot more sales, people would get curious and start entering ENS. Mainstream media would write about it, and so on and so on. Average Joe would definitely choose .eth for his Web3 identity and crypto wallet instead of any other Web3 extension, if he would be constantly reading about high sales of .eth and would not read the same about .x or other Web3 extensions.
I am in the domain space for about 20 years. I know what I am talking about. Go check Namepros. Investors are scared of even a premium domain in a good new gTLD, if the renewal price is higher than $50/y. Check the wanted section. If someone is asking for something other than .com, it is mostly always highlighted that the renewal should not be higher than $50/year. Those demands often come from people who are ready to spend $x,xxx or $xx,xxx on a single domain, but are not ready to pay more than $50/y just for the renewal. When selling domains outbound, if you are selling a domain with a renewal fee higher than $50/y, if you mention that to your prospective buyer, no matter how good the domain is and how much is the deal worth (it could be $x,xxx or even $xx,xxx), you will likely lose that potential sale. Talking from experience. Cant even imagine how would potential end-user react if I would try to sell him a domain with a yearly renewal fee of $640. Ridiculous!
Why I am so sure that with $50/$20 renewal we would have all 3Ls and 4Ls registered? Because we already had all 3Ls registered during the May-September 2022 hype. But that was not sustainable as it was just a hype. The main reason why I am so sure they all would be registered and would STAY registered is because in any domain space one of the first choices are 3Ls and very often 4Ls.
It would be a peace of cake to have 17576 registered 3Ls if the renewal would be no higher than $50/y. Then investor and end-users would switch to 4Ls if the renewal would be no higher than an acceptable $20/y. In less than a year, all 4Ls would be registered. Then would additional investors come. With them, many new end-users would come.
With all 3Ls and 4Ls registered, we could keep building. End-user would come as they would feel this is a desirable extension. When someone sees 3Ls available, how anyone could expect that that person will believe this is the top extension and that he should not search further?
End-users could and some will come even now, but for many, ENS would be just one of the options. ENS has the potential to become the ultimate king, the .com of Web3, but currently is killing that potential with ridiculous renewal prices.
Recently .btc stood up from the dust. Their renewal is less than $1 for a 5-year period. Does anyone really think that many potential ENS users will not choose .btc and be lost forever for ENS? Some will say .eth and .btc are not easy. Think about more than 2 days further. Its is easy to be confident in ENS now, when .btc don’t have 1% of dApps that .eth could use. A few weeks ago we saw the born of BTC Ordinals. Some BTC dApps are already announced, some .btc integrations and utilities/usabilities are already announced. Imagine how many BTC dApps usable by .btc will be out there in a period of 1-3 years! Don’t ignore that!
Moreover, the .btc will become the address of BTC wallets. We know which cryptocurrency is the king and will stay the king, no matter someone’s wishful thinking. No one should be fooling himself that ETH will overtake. Yes, ETH has a lot of potentials and will do a lot of great things and raise in value, but BTC is and will stay the only true king. Many BTC users will without a doubt choose .btc when it develops itself a little bit more, unless before that .eth become a true mainstream. It will not become that with the current renewal prices.
We are fooling ourselves. Unstoppable also has a lot of registered names, and add Handshake, now .btc and future competitors so you will probably realize that ENS is not safe at all! Even OpenSea currently offers 0% fees!!! They realized that X2X and some other competitors could hurt them in a long run. ENS DAO should not be stubborn, and we all should not be quiet! Even if I would have only 1 .eth domain with 5+ characters, I would want to see that .eth are traded every day and that the volume is really high. That would not be the case in a sustainable way with the current renewal prices, I can guarantee you that. I am long enough into domains to know that both, the end-user and investors will not be convinced to enter any extension with short names unregistered.
The gas fee is also a problem. We don’t know if the gas fee will be $5 or $50 or even $100+ in the upcoming period. For the last few weeks you cant register .eth for less than $10 in total. The registration/renewal price of $5/y is great, but nobody cares what is the part of the price. All are interested only in what they are paying in total, and currently you need $15-$20 (on a good day) to register/renew .eth wtih 5+ characters. Thats the limit that is acceptable. With the ridiculously high renewal of 3/4-characters ENS is becoming to expensive and there is a competition.
No, I don’t like Unstoppable, I don’t like Handshake. I don’t like the idea of no renewal either. I just don’t like the high renewal price of .eth as it kills the extension and I am 100% sure about that.
But if you ask about .btc? Hmmmm. Currently, they are on their way to overtaking millions of potential ENS users. Imagine what would happen if .btc could be traded on OpenSea? Gamma is slow and people don’t know about it or don’t trust it yet, but it’s still early and other marketplaces will show up or Gamma will improve. If we react now, and drastically lower the renewal, we will still have time to establish .eth as an unquestionable king among the Web3 extensions before .btc gets noticed by the masses and before there will be a lot of BTC dApps. But if we don’t react now, I am sure ENS will enter into serious problems. Everything could be shiny again with a single move from ENS DAO, lowering the renewal prices. Simple as that.
I am not bothered with the carry cost as much as I am concerned about the consequences of that to the whole ENS ecosystem. As I mention, no way ENS could be healthy with unregistered short domains, and if nothing changes, in the best-case scenario we will have partly registered short domains with many 1-month regs. That is not sustainable.
Some true ENS end-users don’t like domain investors and flippers. Thats wrong. Investors and flippers are good for any domain space. They are the ones who bring confidence to end-users that they will be able to get money for their .eth when they will not need it anymore. They are who bring additional value to domains. They are who bring interest as when you hear that beer.eth or SKY.eth or DDB.eth sold for $100,000, you as a potential end-user will prefer .eth over Unstoppables .x or some other Web3 extension. When there is a lot of .eth official sales every day, for some reasonable amounts, that is proof that this extension is alive and desirable.
If we want to be honest, the whole current raise of ENS was done by investors, flippers and speculators. Real end-users are yet to come, currently there are not many of them.
If there were no digits, .eth would already be in the dust. But I know how the digits game will end. Sooner or later, all the 999club .eths (3D.eths) will end in the diamond hands and there will be not a lot of volume in that club anymore as owners will hold. Check .com 3Ns. Then 4D.eths will follow. And what then? To rely on words for the volume? With 3Ls available and a ridiculous renewal price? With no volume, there will be no additional interest. For Web3 identity and crypto wallets, sooner or later .btc would be the choice of many (if .eth doesn’t destroy the competition now when there is a chance).
So to conclude…
I don’t know if it is forbidden to question the renewal price, but can’t understand it is not the bigger issue in the community. I would not say a word if there are all 3Ls and 4Ls sustainably registered, not for a 1-month period by flippers, but we see it is not the case and the reason is obvious. Not just that all short names are not registered even for 1 month, but the number of registered 3Ls is only the half of supply and rapidly dropping! Nobody serious will have confidence in the extension which has 3Ls available, the foundation of any successful extension.
At some point last year all 3Ls were registered, but that was only the hype and was not sustainable. It would be better that we grow slower than that we skyrocket and then fall rapidly. Check the market, check premiums, check grace, and you will see this is not sustainable. Ok, almost 3 million registered domains is a good thing, but it will not continue in a good way with all the competition if we don’t lower the renewals now!
My suggestion…
If needed, raise the registration/renewal price of 5+ characters to $10 (better not, but do it if you have to).
Announce that from 01.01.2024. the registration/renewal of 3/4 characters will be no higher than a $50/y and $20/y. That is the absolute maximum that could work.
Keep the current prices until 01.01.2024. and I am sure 3Ls and 4Ls will start being registered/renewed even now with the current price as investors/users will want to be sure they will have the desired domain when the renewals go down.
That way ENS DAO will earn MUCH MORE than it would if nothing will be changed. More importantly, this will SAVE ENS and push away the competition.