Rethinking ENS Domain Pricing: A Crucial Conversation

đŸŒ± ENS Ecosystem
21

The gas issue can be solved by using a sorted merkle tree for proof of non-membership. We just need to establish an exhaustive list of the premium short names: eg. all ASCII permutations, single emoji, repeated emoji.

  • Full price if you provide no proof.

  • Reduced price if you provide a proof of non-membership (two proofs for of the neighboring names.)

With a list of (name, cost)-pairs, there could be tier/per-name pricing.

  • Specific price if your provide a proof of membership.

When using a proof, the maximum duration could be limited.

1 Like
22

The early adopters could only register 7+ character names

It is touted that there are 8 billion people in the world and only X amount of names in a club so they are going to moon in price

As Nick said, having a short name is a luxury

If there are only X amount of short names possible then there is a case for actually increasing the price of them substantially as there are 8 billion people in the world

Use of ENS has only just started, we are not the end market, do we want to look after ENS and guide it in the right way, or do we want to increase our own bags??

23

It’s important to recognize the difference between exclusivity and accessibility in the ENS ecosystem.

While the earliest of adopters had constraints on the length of names they could register, this doesn’t inherently make shorter names a luxury or justify exorbitant pricing. The scarcity of short names is a technical limitation, not a feature to capitalize on.

Consider the vast array of possible combinations, especially with Unicode, which adds trillions of permutations. This abundance contradicts the argument of scarcity driving value. The proposal to reduce prices for 3L and 4L domains aims to make ENS more inclusive and to foster a diverse range of active users, not just to inflate the value of ‘elite’ domains.

Moreover, the global population size should actually encourage us to think about making ENS more accessible rather than restricting it to a select few who can afford high prices.

ENS’s success depends on widespread adoption and utility, not on artificially inflated values driven by exclusivity.

Our focus should be on guiding ENS to be a useful, equitable service, not only as a speculative asset for a small minority of participants.

24

Exactly why I have suggested a tiered system with different prices in each character length

If you reduce the price of the top 3/4 character names then all it will do it allow people who have bought and agreed to pay $640/$160 per year to be able to afford more names for their budget, so in turn, reducing the yearly cost will allow more names to be squatted on by these people for the same yearly budget

The only way around this is a tiered system to promote names that aren’t popular due to the yearly cost due to the basic pricing structure just done on character length

25

I think we have to look at the aspect of:

what does it mean to be an early adopter?
Does it represent someone simply registering the name?
Does it include speculators?
What is a speculator?
How is a registrant penalized
What does it mean to penalize?

Spectrum of early adopters

  1. Domain Owners:
    –register and own ENS domains (like example.eth).
    use ENS to associate these domains with their Ethereum addresses,

  2. Developers and Integrators:
    users who are incorporating ENS into their applications.
    –wallets, decentralized applications , or other Ethereum-based services

  3. Speculators and Traders:
    users are involved in the buying and selling of ENS domains.
    –speculate on the future value of certain domain names
    –intention of selling at a higher price.

  4. End Users:
    users of applications that utilize ENS.
    – benefit from the simplicity of using human-readable names instead of long Ethereum addresses.

  5. Governance Participants:
    with the introduction of the ENS governance token (ENS);
    – [ there are users who participate in the governance of the ENS protocol ]
    – vote on proposals and decisions that shape the future of the service.

At what point are people being penalized?

In regards to the name and name only; that I have registered, I don’t feel that my name has caused me any penalization.

If there is any penalty,

I don’t think that it particularly falls within the categories of 1-4. Instead I feel that those in group 5 would feel more of a penalty like feeling over the rest. I find it strange that, for the most part; a lot of the voting weight falls in the hands of delegates who have in the past publicly felt the responsibility of being delegate is too stressful, costs too much or takes too much time. Yet on the other hand, there have been people who have cycled through the DAO who have clearly shown consistent contribution and dedication through exploring the realm of ENS’ possibilities through conversation and engagement with those who are equally engaged. Those participants are more likely to not have any voting power. Logically, that doesn’t make much sense.

Those who are participating in conversation don’t have voting weight
vs.
those not engaged in DAO Governance with large voting weight.

I would much rather the DAO ‘not penalize’ it’s consistent contextual thought provoking conversational governance contributor participants before considering price changes on registration.

So my question truly is, how are the ‘categories’ 1-4 penalized by the current cost of registrations?

26

I don’t want to get stuck in a loop here, so this will be my final response to you regarding this specific issue. Now let’s try our best to shift the focus from this narrow perspective of merely ‘enabling squatters.’

Reducing the fees for 3L and 4L domains is about unlocking their potential, not just about today’s squatting.

We’re talking about a spectrum of possibilities that expands into the trillions with the incorporation of Unicode – a fact that can’t be overlooked.

To me it seems obvious that if we keep focusing solely on deterring existing squatters we risk alienating potential innovators and new users altogether and our data from ENS Summer 2022 suggests precisely that.

The notion that 3L and 4L domains are merely ‘luxury items’ becomes less tenable when you consider the extensive range of possibilities Unicode brings. It’s not just about luxury; it’s about accessibility and fostering creativity within the ENS ecosystem. So let’s focus on that.

The real issue lies in the 5L+ range, where the lower fees have already led to extensive squatting due to price discrepancy between character lengths yet I do not see this being presented as a primary point of discussion.

27

im personally for reducing 3L by maybe 20-30% but in return, should see 5L+ increase 5-8%

trillions of what? dollars?

28

I believe 20 or 30% reflects an unknown variable while $160 represents a more proven and viable price point that will be more easily accepted by the broader community.

It’s also important to note that $160 is a non-trivial amount of money for most people and that it’s rare to find registrars that will exceed these fees for most legacy TLDs.

Trillions of 3L domain combinations with the inclusion of Unicode.

The numbers are actually so staggeringly high with the inclusion of Unicode that it’s almost disingenuous to imply there is a cap on them.

The possibilities of domain combinations with Unicode are effectively endless - and that’s not good when the crux of the 3L and 4L argument is dependent on them being seen as ‘luxury’ goods.

29

I would respectfully vote against the proposal in the first post, as currently laid out.

I am not convinced by the rationale, to start with. The first two points, okay fair enough, I definitely see the benefit in exploring a model that is more “equitable”, that still balances accessibility with anti-squatting. No problems there.

But the last two points are laser-focused on 3L/4L names, to “enhance their usage thereby cultivating a more dynamic and inventive environment” and prevent “discouraging the registration of innovative domains”. I say if a not-yet-registered 3L name was truly so magnificent and “innovative”, it would surely be worth the $640/year, likely more.

Trillions of Unicode permutations exist, so


Nah, I don’t buy that argument.

I think we all know that despite the trillions of theoretical permutations, only a small subset are actually useful and desirable. Namely, those with a-z0-9. Maybe add a few extra characters, some emojis, etc.

Not to mention that ENSIP-15 cuts down the permutations by quite a bit. You cannot mix Latin script characters with certain other scripts like Cyrillic. Tons of confusable, restricted, machine-use, or limited-use characters are invalid as well. If you were thinking that “innovative” names might include I dunno, Hebrew characters mixed with Chinese characters or something, well sorry, that is already disallowed by the recently approved DAO standard.

ENS names are already very affordable and accessible (especially with subnames! and L2 support being worked on!! and gasless DNSSEC coming soon!!!), and nobody needs a 3L or 4L. Yes, I said it, and it is not a fallacy.

I agree that squatting happens, it’s impossible to prevent completely. Any pricing model is going to be made up of imperfect human decisions. Character length just so happens to be the simplest, lightest-touch way to mitigate it somewhat, while still being as neutral as possible.

We could go further and make different tiers based on the character script, like a-z0-9, as others in this thread have pointed out. Of course, that means we would need to make a bunch more imperfect human decisions about which names are “more desirable”, upsetting some groups of people in the process, and adding more complexity and gas costs to the protocol. But hey, maybe that is certainly worth exploring at this stage!

5 Likes
30

I’m going to have to disagree with the non-trivial point. $160 is still alot to most americans.

there are also trillions of phone number combinations and we aren’t and will never be at that level and cell phones have been around what over 20 years now? I see what you are saying and I concur .

31

It is a lot, yes. That was my point. Most registrars do not require this much in renewal fees for their domain extensions.

$160 reflects a price point that is both premium and more accessible to a wider array of participants.

32

honestly, if $160 is too much then probably shouldn’t be building on Ethereum and that includes myself. It’s not exactly an ‘economy’ level blockchain imo.

Your points are very valid and credible.

1 Like
33

Some wires must be getting crossed here and there seems to be a misunderstanding.

I am implying that $640 is too much for maintenance costs and suggesting we lower the annual fee to $160 to maintain and respect its status as being both premium and accessible to a wider array of participants.

34

I basically want to second everything @serenae said, especially:

Nobody needs a 3L or 4L

And I would like to add that changing anything like this has a HUGE cost, and the benefits would have to out weigh that cost. These benefits honestly seem relatively negligible given the work it would take to make these changes and the impact it would have on the confidence of market (If we can just change the price all willy nilly
 what will we change next?)

But hey, with the way the US dollar is inflating, you can count on a solid discount every year without the DAO having to do anything. wait 10 years and we will see what $640 is really worth :wink:

Screenshot 2024-01-05 at 10.33.19 PM
Screenshot 2024-01-05 at 10.33.19 PM1416×134 9.74 KB
$478.42 in 2014 → 2024 | Inflation Calculator

3 Likes
35

sorry.

if $1,000 a year is too much then you probably shouldn’t be building on ethererum, that includes myself. But I have already invested the past 3 years into Ethereum religiously. If it was worth it to me and it was a must have, i would find a way,

lol, fav

36

The assertion that only intrinsically “magnificent” 3L or 4L domains justify their current renewal fees overlooks a key aspect of what ENS aims to foster.

The value of a domain extends beyond its immediate speculative appeal; it includes its potential for unique branding, personal expression, and innovative applications.

By maintaining prohibitive fees, we risk stifling the very inventiveness that could bring new life and diversity to the ecosystem.

It’s not just about the few domains that might command high market value; it’s about enabling a wider community to experiment with and utilize ENS in ways we have yet to envision.

Lowering the fees doesn’t diminish the value of 3L and 4L domains; rather, it democratizes the opportunity to leverage them in creative and resourceful manners.

Consider the potential for artists, entrepreneurs, and community projects that could benefit from a memorable and concise domain but are currently priced out of the market due to prohibitively high yearly renewal fees.

Imagine the possibilities if we lowered the threshold for maintenance and what possibilities could be in waiting just ripe for experimentation.

Domains that may not seem “magnificent” at face value could become keystones of innovative services, artistic endeavors, or even new social movements within the web3 space
 but we’ll never know that for certain as these potential endeavors are effectively prohibited by the currently excessively high maintenance fees.

While the intent of high fees might be to deter speculation and squatting for 3L and 4L domains, it inadvertently shifts the speculative behavior towards the more easily accessible 5L+ domains.

The notion within the DAO that 3L and 4L domains are non-essential is undermined by a pricing structure that makes these domains unattainable for many, thus skewing the ENS domain landscape in favor of the squatting on the more accessible 5L+ subset of domains.

The reality is that high renewal fees for shorter domains have not so much curbed squatting as it has redirected it.

Speculators now turn to the 5L+ domain space, where the lower costs provide a fertile ground for mass registration, often leaving these “magnificent” domains in the hands of entities like ENSAgent, locked away from genuine use and innovation for years to come.

By reevaluating the fee structure for 3L and 4L domains, we aim not to appease squatters but to correct this imbalance.

Reducing fees and requiring a down payment for the first year serves to deter unserious speculation while opening the door for legitimate users who wish to explore the potential of these domains. It is about transforming the domain landscape into one that rewards genuine engagement and discourages domain hoarding across the board.

So while it’s true that, yes, 5L+ ENS domains are affordable, the primary set of those affordable and “magnificent” names you spoke on earlier have already been claimed long ago by the very speculators you seek to deter with the current 3L and 4L pricing schema.

1 Like
37

lets look at this way.

How much does it cost to use the internet?
$30 - $200 on avg for a general consumer.

how much is a three letter premium ‘.com’?
at least a few grand and up


now—

How much does it cost to interact with ethereum for the average person per year?

probably be surprised at the deal that a 3L .eth is getting on a creme de la creme blockchain

38

After reviewing and deliberating on the ongoing discourse within this discussion, I’ve noticed there is a prevailing trend expressed by members of the DAO that warrants deeper discussion.

The current dialogue seems to favor the protection of a select group of domains—an estimated 10,000 ‘magnificent’ 3L domains, which command a renewal fee of $640 per year.

This approach, while seemingly meant to preserve the value of these specific domains, inadvertently imposes a significant limitation on the broader potential of ENS, particularly in light of the expansive possibilities introduced by Unicode.

To provide context, there are 17,576 possible alphabetical 3L combinations (from aaa.eth to zzz.eth) and 1,000 digit combinations (000.eth to 999.eth). We’ll also graciously add in roughly ~1,500 potentially valuable emoji domains as to be nice even though this number is realistically smaller in practice.

Folks, we’re looking at under 20,000 total domains that could ever be considered universally ‘premium’ under this current schema.

More so, this estimation generously includes all possible 3L alphabetical domains, even though less than a third are actively registered. This brings us to a more realistic figure of about 10,000 domains that are actively being protected at this premium price point.

Now, let’s juxtapose this with the trillions of unique domain combinations made possible by the inclusion of Unicode.

The current pricing model applies a uniform, prohibitively high renewal fee across this vast spectrum of domains. This approach seems to disproportionately favor a minuscule fraction of domains, while severely restricting the registration and use of a significantly larger pool of potentially innovative and unique domains.

The core issue here isn’t just about protecting a subset of domains deemed ‘premium’ but about how this protectionist policy impacts the ENS ecosystem at large. By maintaining such high fees, we are effectively gating off an entire realm of creative potential.

This not only contradicts the ethos of inclusivity and accessibility but also hampers the innovative spirit that forms the bedrock of ENS as a primitive naming protocol within the web3 community.

Therefore I believe it is imperative that to foster a thriving, more dynamic ENS ecosystem, we must reassess our pricing strategy.

It is crucial that the ENS DAO seek a balance that recognizes the value of certain domains, without imposing undue financial barriers on the vast majority of possible domain combinations, especially those enabled by Unicode.

A more equitable and balanced pricing model would encourage the exploration and utilization of these domains, therefore enriching the ecosystem with a diversity of names that reflect the creativity and ingenuity of its users.

In conclusion I believe that while the intent to protect certain domains is understandable, the current approach may be short-sighted in its scope.

It’s time we consider a pricing model that not only respects the value of premium domains but also embraces the expansive potential of ENS, allowing it to evolve into a more inclusive and creatively robust platform.

Thank you.

39

I really admire your enthusiasm about this topic. You should consider participating in other discussion topics as well.

I’m not so sure that a three character domain is going to spark innovation. A developer can provide the same sort of innovation with 4,5,6
+ character domains.

The financial burden that you believe will be lifted by unicode inclusion would not occur. Rather than an alleviated financial cost, the ecosystem would see exponential numbers in fraudulent domain imitation and thus end up ruining the reputation of ENS and perhaps ethereum in general for allowing such to occur. There are many long discussions about this on here. If you have not read them, you should.

I could type all this out paraphrase, but that would take too long. To understand why, here is a comprehensive FAQ about the security issues related to unicode domain inclusion. Although, I am sure you already know this.

Hypothetically, if the price were to be lowered, they would be scooped up in a heartbeat by speculators that would nonetheless still ask more that $1000 for them on secondary. I’m just not seeing it. Also, I’m not the DAO in whole.

1 Like
40

If you take the pricing structure away from just character length, then you could bring in names like single emojis with less than 3 code points and price them the same as the current single emoji names that have 3 code points

This will introduce the possibility of using names like :heart:.eth or :+1:.eth

This will bring in many more names to be able to be used and allow creativity and individualism in the chosen name and help promote ENS in general as they stick out so much on things like Etherscan

As visually single character emojis are possible I don’t see why an exception to the 3+ code point rule should really matter as it will still produce a visually single emoji name, the only downside is that it will increase the supply of the single emoji club, some may think this is good, some may think this is bad