What On Earth Is ENS (Ethereum Name Service) - A Token That Surged Over 600% In The Past Two Days?

2021/11/11 10:13:57

The Ethereum ecosystem is very special on its own. As the second-largest cryptocurrency with a market dominance of close to 20%, we can't imagine the crypto market without Ethereum and its native token Ether (ETH). Although Bitcoin leads the market in terms of market capitalization and trading volume, Ethereum has a wider fan base and a more robust community.

Etherum is not just any other crypto but an amazing platform that allows crypto start-ups to build their own dApps. As the platform is growing exponentially with increased participation in the DeFi space, a feature has been introduced in the form of a decentralized application - Ethereum Name Service with its token as “ENS.”

In this article, let's discuss what ENS is and why there has been so much hype surrounding this crypto in the past two days.

What is ENS?

It is impossible for any global business, organization, institution, or even a celebrity, not to have their own domain name on the internet. For instance, if you want to buy a Zara product, you just type in their URL - www.zara.com. To own this domain, Zara must pay a premium so that its customers can easily access their online store. It also supplements the authenticity of the Zara brand and protects its intellectual property.

However, this was not the case during the beginning days of the internet. Every website was assigned a specific IP address, and the users must enter that specific IP to visit a particular website. You can imagine how tedious this process is and the number of things that can go wrong during this process. Then came the DNS (Domain Name Service) service, which linked the specific IP address of a website to a readable text. This completely changed the game as accessing our favorite websites got way too easy and convenient.

This is the same feature ENS brings to the decentralized world. Typically, users of the Ethereum wallet will get a specific wallet address comprised of about 42 alphanumeric characters. To send or receive Ether, users must copy-paste the entire address, and while performing multiple transactions, it gets hard to memorize or identify which wallet address belongs to whom. Also, due to the irreversibility property of blockchain, canceling a transaction when sent to the wrong address is impossible, making this problem even more complex.

But now, with ENS, this problem is solved forever. Ethereum Name Service securely links a particular ETH address with the preferred domain name. This makes it easier for the senders as the domain name is searchable and memorable compared to a long string of numbers and letters. Like how most of the domains on the internet end with ".com", all the domains registered with the ENS end with ".eth" and if you have an ETH wallet, you can get your own domain registered by visiting the ENS dApp.

Below is an example where we attempt to register an ETH address with a domain name "KuCoinENStest"

Source: ens.domains

As you can see, the process is straightforward, and it takes less than a few minutes to register. Also, the registration price + gas fee is supposed to be paid to own that particular domain. Once the registration process is complete, the ENS network attaches your wallet address to your selected domain name.

This domain name can be used to identify your ETH details on various Ethereum products such as EtherScan. Below is an example of the same where we have entered a registered ENS domain of Rainbow Wallet - “rainbowwallet.eth” and we get to see all the details related to that domain such as wallet address registered to it, the expiration date of the domain, etc.

Source: EtherScan

The ENS AirDrop

The Ethereum Name Service dApp has offered an airdrop on 8th November right after issuing their ENS token, a governance token for the ENS decentralized autonomous organization. For those unaware, the airdrop is a token distribution method where a part of circulating tokens is given to the community for free. The purpose of this is to reward the individuals who have backed the project in its early stages.

The ENS airdrop was a huge success, and the entire phenomenon took Twitter by storm. The price of the free ENS tokens received has surged from $18 an ENS to about $80 at the time of writing. Many posted their free earnings reaching up to $18,000 in less than two days.

However, to claim the airdrop tokens, users had to follow a detailed procedure where they delegate their governance rights, acceptance to vote, etc. Also, the number of tokens received depends on the duration of the owned domain, number of NFTs purchased using that ETH address, demand for that domain, etc.

ENS Price Action Since The AirDrop

The price action of the ENS token has been very volatile ever since its launch a couple of days ago. But the volatility is only to the upside as the price continues to make back-to-back higher highs, as you can see below.

Source: TradingView | ENS/USDT

The ENS token price has grown by over 640% in just two days which is mesmerizing. With healthy pullbacks, there is less sign of any major price drop for this token, at least according to the technical analysis. The increase in price brought ENS to just above the top200 cryptocurrency sorted by market capitalization list.

Not only did the price of ENS increase, but its cumulative volume also increased exponentially - from $50 million on Nov 9 all the way up to a high of $1.76 billion on Nov 11.

The Future of ENS | Is It a Good Investment?

As Web 2.0 evolves into Web 3.0, it is crucial to consider how the future of the internet will seem like for online stores, artists, companies, and brands. Decentralized markets, DAOs, or anything that involves cryptos on the internet requires a standardized naming service that is easily identifiable and memorable for the masses.

ENS takes the front seat in this progression, and as the ETH ecosystem grows (which is obvious), the value of the ENS token will increase. Therefore, we believe that investing in ENS could be a great investment after all.

ENS on KuCoin

Our primary motive at KuCoin is to offer our users the latest trending, profitable opportunities in the crypto space. To support that motive, we have launched the ENS token on the KuCoin trading platform. With the ENS/USDT pair, you can now trade the ENS token in the spot market and profit from the price fluctuations. All the best!

Stay tuned and watch the KuCoin Blog for more interesting educational crypto content. All the best!

Did you know that KuCoin offers premium TradingView charts to all of its clients? With this, you can step up your ENS technical analysis and easily identify various crypto chart patterns.