Some just bought the “0.00eth” ENS domain name for 300 ETH on Sunday resulting in a sudden surge of Ethereum Name Service registrations amidst the low gas fee.
According to lead ENS developer Nick Johnson, the platform increased in users, almost 108,000 ENS domains were signed up over the past week, and ENS earned $684,000 on Sunday. OpenSea also saw a $7.9M volume trade in the ENS domain secondary market for the past week.
As crypto winter remains consistent for July, Ethereum Name Service has managed to push Ethereum’s activity in the community. For the past few months, blockchain networks saw a massive decline in trading or any other activity. Many experts believe this was because the crypto prices keep dropping every day.
Now, it seems the crypto community might have gotten used to the bear market because, despite the declining prices, the activities within the Web3 world haven’t stopped for once.
However, this week, the Web3 world saw a sudden hype for owning domain names among people.
What is Ethereum Name Service?
Ethereum Name Service is a domain name protocol that enables users to buy and own domain names on the Ethereum blockchain. ENS offers users the facility to name their wallet addresses and websites based on one username, so whenever someone searches for a domain name, all the information about it will pop up.
ENS is composed of two Ethereum smart contracts: the ENS registry records domain names, and the Resolver transcribes domain names to machine-readable addresses and vice-versa.
Wallet addresses tend to be quite hard to remember but with an ENS domain, the user can name their wallet with a simpler name that can appear on search results.
The domain name is just like in the Domain Name Service in Web2. In the early internet days before DNS, people would have to type out machine-readable addresses to access a website. With DNS, people were able to simply type out a name and the URL pops up. With ENS, a user can own a domain name as NFT and make it their signature identity on Web3.
Why the sudden popularity of ENS?
ENS domain name hype seems to be July’s first-week highlight expected to increase again in the second week. According to various sources, the sudden burst of ENS registrations came after someone bought “0.00eth” for around 300 ETH (373k USD), making it the second-largest sale in USD and ETH.
There is always something about buying items related to #1 or #0 that holds value in the market like the first tweet by Jack Dorsey that was bought for $1M. So, buying a “0.00eth” domain name holds much value because everyone easily searches for it.
This caught people’s attention and everyone joined the bandwagon of buying domain names. The low gas prices on the Ethereum blockchain made it even better because people could buy domain names without having to pay high gas fees.
Days went by and the registrations on the ENS protocol increased to over 64,000.eth only on Sunday and Monday. In the last 7 days, 108,000 ENS names were signed up.
According to Dune analysis, the biggest domain name holder, ensed.eth bought 2944 names, while 6912.eth ranks on the weekly high with 924 names under their ownership.
As a result, OpenSea, which has been experiencing record-breaking lows for the past months, got filled with traffic last week as secondary sales of ENS domains soared over 300%. ENS now ranks in the top NFT collection with 6,900 ETH ($7.9M) volume trade
For the past few weeks, the Ethereum community was worrying that the decline in gas fees might have to do with the NFT crash that dropped to a 12-month low. However, the low gas prices turned out to be an opportunity for people to buy domain name NFTs at a lower price.
According to the DappRadar data, ENS protocol rose on the top sales chart of NFT collection in the 7-day tracking week. This shows that the hype for NFTs isn’t over and has now shifted towards buying domain name NFTs.
As Web3 increases in popularity, these domain names are most likely to profit the buyers in the future when they sell at a higher price in the secondary market. In other words, this might be another investment strategy for the buyers amidst the bear market.