Reducing Renewal Fees for ENS Domains to Increase Adoption and Sustainability

[nick.eth]

@rayw

Brantly and Nick, in late 2021, said that the fees are put into place in order to “to prevent the namespace [from] becoming overwhelmed with speculatively registered names” and to “prevent all the desirable names [from] being registered by speculators immediately.”

There is clear contradiction between the stats and the reasoning behind the fees:
Despite the obviously high fees, speculators/squatters still accounted for most of the revenue and own most of the “desirable” names.

With this in mind, I think a fee reduction is the smart thing to do: minimum 50%. In the thread, I said “ideally 75%.” However, I could see why 50% reduction could be better or maybe a little lower at $240 and $60.

I don’t see how your conclusion follows from your premise. If most registrations are speculative, and fees are in place to discourage speculation, wouldn’t that imply prices should be higher, not lower?

[accessor.eth]

@ENS878

Having names taken, but on the market is freeing the names. Having them available, but with too high a carry cost, means blocking them and preventing end-users to use them.

Business is business and for ENS to stay in business—ENS simply has to keep the business sustainable using its long term cyclic retroactive public goods funding mechanism that. And do what if all 3ch

Maybe some of you are in a different crowd, but I do not know anyone with under 100 names in their 721-satchel that has flushed their ENS and said he’ll with this.

Also there is no requirement or registration quota, this isn’t a game of commission.

We could always do a test.

Initialize a page for a sign up to get 1 free name ahead of time.

Put out like a 10 min time window to register your free name and look at the numbers.

[rayw]

Indeed, I was thinking the same thing. However, I think it is quite obvious that increasing fees is not a good idea.

I guess the renewals are so high, it makes sense why most of the 3 and 4-character names would be in the hands of squatters or speculators.

I think high fees are definitely good to fight against speculators and squatters and we have seen this work a few times this past year. However, the diminishing price of the 999 and 10k club domains has nothing to do with renewals. I feel like this shows that high fees will never be able to combat speculation and squatters completely.

the reasoning behind $640 and $160 fees is just not 100% valid and will never be.
we must look at the logic behind these fees and the data and figure out if this is truly the right way to operate.
No matter what is done, we all know speculation and squatters will never disappear.

[rayw]

All around, the more I think about this, the more I realize it is difficult to assess what’s the best thing to do. Even a 50% reduction would leave renewals pretty high (compared to 5-character price).

[Theth.eth]

Business is business, but there is the argument that if people are not renewing enough of the premium names and going to $5 names or nothing and leaving ENS that ENS won’t have enough $$$ to survive

You could see the people who are minting, squatting and trying to sell the names as individual advertising companies

ENS is not good at advertising and relies on the users mainly to promote it

But, are these individual people good for ENS or not, I don’t know

The Harberger tax method which I used to be totally against but now coming round to, but, it would even things out a bit, as there is no shortage of 3 character names, but it would mean the premium ones get charged the most, and you would be able to pick up a random 3 character one for a cheap price

The market has deemed the 3 x digits THE premium name, so why are they charged the same as .eth

Keeping them the same yearly cost actually hinders people using short ENS names

How many people would use 3 character names like the emoji one if they could at a reasonable cost?

1359 x 1 character emojis currently plus all the other ones with more than 1 character, but just with the 1359, that gives 2.5 billion combinations

add in letters of digits or other characters and the number is even more

$4.eth

It’s a hard call to decide on the figure for the yearly costs, but I don’t feel that the current cost per character length is working, there needs to be something else thought about, I’m not saying put in place, but it needs to be considered

I do feel that there are people who have over-stretched themselves either minting names or buying on secondary at a high cost and speculating on a future price increase,

but as an example, if you are willing to spend 100eth or more on a name, then you are definitely speculating and ENS is not there to help you keep the value of the name by reducing the holding cost, for me tbh anything over a 10eth is a bit crazy to buy a name for

Good debate going on though, plenty of opinions which is good

[matoken.eth]

Neither side of the arguments can be verified without the data imo.

We can actually run A/B testing from our website by changing the registration period of 0.5, 1(original), and 2 years to see how much will it impact the number of registrations, though it’s a bit harmful to default to 0.5 year as people are more likely to forget renewing.

Having said that, what we really need to think is a way to dynamically changing price based on external environment (gas price, inflation, total number of registration, etc) unless we run the A/B test every year and make a DAO proposal to adjust which is quite time consuming.

I personally feel that the time and resource should be spent more on outreach, protocol devs and integrations than trying to optimize the conversion rate based on pricing.

[ENS878]

@daylon.eth

Okay, so how would reducing pricing increase adoption, when

1. the price is the same for anyone (including hoarders/flippers/squaters/speculators/whateveryouwanttocallit)

Short names, especially the ones like 3Ls, are appealing. Someone would take TEU.eth if it would cost $50/y. It is obvious that no one wants it at $640/y.

Sales of short names would become more frequent. That would add liquidity to the market. More money for other short names and for other ENS names. That means the market would be more active. When there are many sales and market activity, someone would be keener to pay $xx,xxx for some ENS name. The owner would spend some or all of the proceeds to other ENS name/s. More market activity again. The ENS collection would be trending more often, which means more newcomers. Whoever would come across ENS market would think ENS is something special with so high liquidity and would not look towards Unstoppable and .btc and others. Mainstream media would write etc.

All this could trigger a simple renewal price cut as 3L is a strong enough category to become a new liquidity maker like the digits are currently. BTW, if you remove digits from the ENS market, ENS would be like WNS, EDNS and that kind of domain name collections listed at OpenSea.

@daylon.eth

There are virtually infinite names that can be registered

Correct, why then DAO is afraid that the real end-users will be in a bad position? They, just as investors and speculators, and squatters too, showed they have not much interest in short names at this pricing.

@daylon.eth

cont: Any domain can be extended by any wallet at any time. It doesn’t have to expire first. If the renewal fee was lowered, what would prevent current holders from just extending theirs at the new, lower price? Wouldn’t lowering the price just make it cheaper for them to do that?

Per my suggestion, the pricing would stay as it is currently by 01/01/2024.

@daylon.eth

This is really hard to quantify. We can only look at the historical data. I guess this is the crux of the discussion here? There is no way to know what people are willing to pay without them first paying that amount. So far, I haven’t seen any compelling evidence or argument that changing the prices would do anything, good or bad, for adoption.

Domains are nothing new. It is the well-established belief that anything above $10-$20/y as a carry cost is too much. That can confirm anyone who is in the domain industry longer than a few years.

@daylon.eth

So far, I haven’t seen any compelling evidence or argument that changing the prices would do anything, good or bad, for adoption.

Per my suggestion, we would see clear evidence, or nothing will be changed.

@ENS878

Announce soon that from 01.01.2024. renewals of 3-chars will cost $50/y and of 4-chars $20/y, but only under condition that on 1st of December 90% of all 3Ls is registered and that at least 50000 4-chars are registered.

That would be a test. A real one, not my opinion or the opinion of any other individual on the forum, while the forum has almost no visitors (compared to potential). If we start seeing an increase in registrations, even with the current price, that would be pure proof we found the problem.

Until 01.01.2024. all registration and renewal prices stay the same as they are today.

That way ENS DAO doesn’t lose anything and is not obligated to lower the prices later if the condition will not be fulfilled. Very simple

@rayw

With this in mind, I think a fee reduction is the smart thing to do: minimum 50%. In the thread, I said “ideally 75%.” However, I could see why 50% reduction could be better or maybe a little lower at $240 and $60.

That would be a step forward, but in my view, the limit must be at $50/y (for 3-chars), as everything above that is too much. We are not even a fraction of .coms, and you can have a premium and short .com for $10/y. The market price is something else, but the .com market is extremely active so everything functions as it should.

@rayw

Even a 50% reduction would leave renewals pretty high

I agree.

I would rather pay $3,000 or $5,000 for a domain that will after that purchase cost me $10/y, than to reg one for $640/y, which will cost me $640/y each year. I don’t want to use a domain as my forever domain that cost me $640/y. Most end-users are thinking that way. I really don’t understand how DAO doesn’t realize that. Just check the availability of short names and how many of them are dropping every day, even knowing that the real renewal season is yet to come.

@matoken.eth

Neither side of the arguments can be verified without the data imo.

I may be subjective, but I really think my suggestion would be a perfect test, and what’s the best, nothing will be changed if I am not right.

Sadly, it looks like @nick.eth will not change his mind, at least for now

I feel my arguments are ignored by you @nick.eth

@nick.eth

I’d personally like to see more evidence that a decrease in price would lead to a corresponding increased usage of the 3-character namespace.

But if this was an honest statement, here is my suggestion again. I will tell again, if I am not right, per my suggestion NOTHING WILL BE CHANGED. I would be happy to finally hear your thought and even arguments against my suggestion if you have any.

@ENS878

Announce soon that from 01.01.2024. renewals of 3-chars will cost $50/y and of 4-chars $20/y, but only under the condition that on 1st of December 90% of all 3Ls are registered and that at least 50000 4-chars are registered.

That would be a test. A real one, not my opinion or the opinion of any other individual on the forum, while the forum has almost no visitors (compared to potential). If we start seeing an increase in registrations, even with the current price, that would be pure proof we found the problem.

Until 01.01.2024. all registration and renewal prices stay the same as they are today.

That way ENS DAO doesn’t lose anything and is not obligated to lower the prices later if the condition will not be fulfilled. Very simple

[rayw]

@ENS878

I would rather pay $3,000 or $5,000 for a domain that will after that purchase cost me $10/y, than to reg one for $640/y, which will cost me $640/y each year. I don’t want to use a domain as my forever domain that cost me $640/y. Most end-users are thinking that way. I really don’t understand how DAO doesn’t realize that. Just check the availability of short names and how many of them are dropping every day, even knowing that the real renewal season is yet to come.

100% agree here.

What are the arguments put forth to justify why we should keep the fees at these prices?
What is so concerning about lowering fees?
I’m really having trouble understanding why these fees should stay this high.

[ENS878]

@rayw

I’m really having trouble understanding why these fees should stay this high.

You are not the only one And a good part of ENS Twitter also having trouble understanding that.

The high renewal price of short names failed, and now it is just preventing end users to use short names. Speculators already get their Sex.eth, Sky.eth., NFT.eth, Joe.eth and alike-quality names.

I have no doubts at all. The renewal price of short names must go drastically down, and my reasoning is explained all over this thread. Unfortunately, I have no influence so I hope @nick.eth and DAO will realize this before it will be too late.

I like ENS, I prefer ENS, but as an investor, speculator, and call it squatter if you like, and of course also as an end-user, I am interested in .btc too.

When there will be a lot of Bitcoin dApps and DeFi, when there will be something like SIWB (Sign In With Bitcoin) and much more, I am afraid it will be too late to think about how to popularize ENS. Either ENS must do it now, or it will experience the power and brand of Bitcoin.

It is easy now to think ENS is something special, but only a few weeks ago Ordinals were not even imaginable, and now we have even Yuga Ordinals. Who can guarantee that maybe even during this year we will not have SIWB on Amazon or/and BNS NameWrapper? BTW, where is our NameWrapper? Pardon me, but it is taking too long

Web3 domains are mostly Web3 identity and a memorable crypto wallet. Good luck to ENS DAO explaining to Average Joe that Bitcoin network is not supposed to carry NFTs, that it needs layers to do what Ethereum and ENS are doing etc. He will just want his Web3 login and memorable wallet address, and .btc will be able to provide him that (while carrying the beloved BTC name at the end), and probably many others that are yet to come.

That’s why I am shilling for liquidity and popularity now, and I believe my suggestion is able to provide that (as explained why). When ENS becomes mainstream, the competition will be “just one of the others”, including .btc. If ENS stays passive now, it will become “just one of many”.

[nick.eth]

@ENS878

I feel my arguments are ignored by you @nick.eth

Every time I have responded you have ignored anything I say that is inconvenient to you. In this same reply you continue to make arguments for the change citing benefits to speculators as a reason, despite my pointing out that this is not the goal of ENS.

As long as that continues there seems little point in repeating myself.

[ENS878]

I don’t want a “verbal fight” with you (it looks like we have not started well), and I appreciate all you have done and are doing for ENS

However, I must comment on this. Please don’t take it personally or in a rude tone.

@nick.eth

Every time I have responded you have ignored anything

No, I commented that it doesn’t make sense as the market told us something else. Short names are dropping rapidly and the real renewal season is yet to come. What other evidence would anyone need?

@nick.eth

you continue to make arguments for the change citing benefits to speculators as a reason, despite my pointing out that this is not the goal of ENS.

The goal of ENS should be using ENS names, of course, and I explained why I believe the renewal cut will improve usage and popularize ENS in the general public. Yes, that would be beneficial to speculators too, but also would be beneficial to end-users as currently they are avoiding short names. So why “protect short names” when end-users don’t want them at this pricing structure (that is a proven fact)?

You said you want to see evidence that the renewal cut will improve the usage. Give my suggestion a chance. I hope you read it, as there is said that if the condition will not be fulfilled, nothing will be changed, so no risk to ENS or DAO if I am not right

[2048.eth]

In China, the length of most person’s name is 3. China has 1.4 billion people.

“Your web3 username” is the slogan of ENS, but $640/year is too expensive for Chinese user to register a Chinese ENS name, such as 赵小明.eth .

I suggest to reduce the register fee of 3 and 4 characters ENS, or consider the byte length of the unicode characters.

[rayw]

Just wanted to say that I changed my mind on reducing fees (made a post earlier suggesting a 50% reduction).
I think the fees are just fine the way they are right now.
In fact, an argument could even be made to increase them.
There’s no perfect way, but we know these fees have been doing a good job for a few years now.

[rendehero]

@rayw

In fact, an argument could even be made to increase them.

wow , that was a 180° “mind change”
from saying 50% reducing you saying now it should be increased ?

Your conviction actually is a good reflection of the market behavior , most talking the baglanguage
which is ok at some point but simply ignoring facts that the decline in use of 3ch domains went down more than 70% is not the way and a good indicator that these prices are too high.

Again, the argument these prices set high making “squatters” a high carrying cost makes 0 sense.

There are A LOT more 5 & 5+ character domains which are “squattable” than in the 3 ch set, and have a carrying cost of 5$ is absurd. Also, it’s not in any relation that the 3ch set (around 2% of the supply) makes/made more than 40% of the protocols revenue.

Making short domains expensive at the bootstrapping phase is a good strategy.
Are we still in this phase ?

Im not repeating myself over and over again here.

So might be my last post and i’d want to delete this discussion if i get a proper answer from @nick.eth for the arguments i explained above & earlier.

[ENS878]

@rayw

but we know these fees have been doing a good job for a few years now.

Yeah, a pretty good job Unless you think it is a good job to prevent people of onboarding and using short names. 5 years of no interest at that pricing (while other longer and cheaper interesting names were registered), and then 1 month of total frenzy, and now the last 6 months of rapid dropping. Really a pretty good job.

@rendehero

There are A LOT more 5 & 5+ character domains which are “squattable” than in the 3 ch set, and have a carrying cost of 5$ is absurd.

@ENS878

Announce soon that from 01.01.2024. renewals of 3-chars will cost $50/y and of 4-chars $20/y, but only under the condition that on 1st of December 90% of all 3Ls are registered and that at least 50000 4-chars are registered.

That would be a test. A real one, not my opinion or the opinion of any other individual on the forum, while the forum has almost no visitors (compared to potential). If we start seeing an increase in registrations, even with the current price, that would be pure proof we found the problem.

Until 01.01.2024. all registration and renewal prices stay the same as they are today.

That way ENS DAO doesn’t lose anything and is not obligated to lower the prices later if the condition will not be fulfilled. Very simple

Still no reply, even with counterarguments on this. If I am not right, there will be no change. Very clear and simple.

[ens1]

@nick.eth we need a few things to move forward:

1. how do we roughly define squatter? (someone with more than say, 10 or more names? names that have been listed on a marketplace in the past 365 days?)

2. how do we roughly define valid user? (someone with less than 10 names? with text records filled, etc)

3. what is the adoption target for 3L names for 2023? 2024? 2025? (10% valid users?)

4. any other key questions? revenue needs by the DAO?

from there we can find stats, @matoken.eth is brilliant with dashboards. only then can we determine if the pricing is “working”.

[ENS878]

The suggested $50/y for 3-characters is already 10x more than for a 5+ chars. That should really be a maximum and is already putting short names into the premium category and expensive carry cost.

Fighting the squatters is as ridiculous as the $640/y renewal fee for 3-chars. Whoever holds any name that is not his/her Web3 identity and is not a name of a business project(s) is a “squatter”.

If there are no “squatters”, ENS would have probably 90% less registered names and probably no to very little volume on the secondary markets.

ENS Twitter very clearly responded to the idea of fighting “squatters”, who are actually done a lot for ENS.

Everyone is praising ENS Vision (for a reason). If we will be honest, it is a service for “squatters”. Typical end-user actually don’t need ENS Vision. He can type in his wanted name and check if it is available. If not he can type in another one, or search for the first one on Opensea.

It is nonsense to even try fighting “squatters”. They deserve credit for what they have done for ENS so far, and actually, they are inevitable in any market.

Let the market decide the price of short names. I can’t believe it is a “problematic” suggestion. I thought ENS is decentralized.

I may be wrong with my thinking and reasoning (explained in detail all over this thread), but my suggestion WOULD NOT CAUSE ANY CHANGE if I am wrong, so I really don’t understand why it is ignored.

[ENS878]

Still no reasonable reply to this, even with counterarguments, so I am repeating

@ENS878

Announce soon that from 01.01.2024. renewals of 3-chars will cost $50/y and of 4-chars $20/y, but only under the condition that on 1st of December 90% of all 3Ls are registered and that at least 50000 4-chars are registered.

That would be a test. A real one, not my opinion or the opinion of any other individual on the forum, while the forum has almost no visitors (compared to potential). If we start seeing an increase in registrations, even with the current price, that would be pure proof we found the problem.

Until 01.01.2024. all registration and renewal prices stay the same as they are today.

That way ENS DAO doesn’t lose anything and is not obligated to lower the prices later if the condition will not be fulfilled. Very simple

Time is ticking. We need liquidity. A drastic renewal price cut for short names will bring liquidity. Liquidity will bring interest. Interest will bring new adoptions.

[accessor.eth]

Cutting registration fees on short names will only result in the same amount of income for twice as long. People will just register for 2x longer. We dont Need liquidity. Yes, it is nice. Time is ticking until what?

edit
Idk what to tell you fren. sometimes discussions don’t follow our personal agendas or follow the flow we want it to. If we are wrong then we will admit it. I think it’s best to move on from this topic. I don’t see it gaining traction anymore. @rendehero

[rendehero]

@rendehero

the decline in use of 3ch domains went down more than 70% is not the way and a good indicator that these prices are too high.

Again, the argument these prices set high making “squatters” a high carrying cost makes 0 sense.

There are A LOT more 5 & 5+ character domains which are “squattable” than in the 3 ch set, and have a carrying cost of 5$ is absurd. Also, it’s not in any relation that the 3ch set (around 2% of the supply) makes/made more than 40% of the protocols revenue.

Making short domains expensive at the bootstrapping phase is a good strategy.
Are we still in this phase ?

Im not repeating myself over and over again here.

So might be my last post and i’d want to delete this discussion if i get a proper answer from @nick.eth for the arguments i explained above & earlier.

@accessor.eth , don’t pick up this guys manifests to reply , 50$ NOW is as much as wrong as 640$