Cold thinking behind the explosion of the ENS digital domain name market

When the wind blows, the wrinkled NFT market is full of spring water. Not to brag, I will talk about my thoughts on this wave of ENS domain NFT community based on my in-depth observation of the @ensdomain digital domain name market over the past few days, combined with the objective response of on-chain data on @duneanalytics The remarkable points and some hidden worries of the hype:

This is a typical NFT community action pop-up show. In just one week, not only did the 3- and 4-digit digital domain names become popular, but the floor price reached more than 10ETH and 2ETH respectively, and also created an official creation for @ens.eth Record revenue for several consecutive days, generating nearly $3 million in revenue in just two days from 5.1 to 5.2, approaching the level of the entire month of March. In addition, it also stimulated a wave of doubling of $ENS. The actual economic benefits are very successful!

Cold thinking behind the explosion of the ENS digital domain name market

There are three main reasons for the fire:

1) Digital domain names are absolutely scarce resources of the ENS system and are easy to be NFTized. As the portal-level strategic entrance of web3, the value of ENS’s original practical-oriented domain names is too slow to discover, and once the 3- or 4-digit domain names are locked, there will be 11,000 in total, and the short and easy-to-remember digital domain names can give holders a kind of social interaction Cultural labels, like avater-like NFTs, can quickly gain momentum;

2) In the NFT world, the power of the community is terrible, and it can buck the trend and build high-rise buildings. This digital domain hype wave was initiated by @10kclub. There are many BAYC bigwigs in the community, and many hundreds of thousands of Twitter fans responded. The most important thing is that there are big capital and chaebol operators. Therefore, the community The consensus is very strong, and it is easy to set off a boom in a short time;

3) Unlike other NFTs, the number is locked, and the best time to enter the market is missed. Either take the offer at a high position or can only wait and see. The ENS digital domain name has great scalability, missing 3 digits, and 4 digits. There are 5 digits to be missed, and letters that can be extended to 3 or 4 digits. This kind of gameplay can maximize fomo’s emotional follow-through participation, so it will continue to receive attention.

However, through some on-chain data observation, it is found that there is actually a mystery behind this wave of digital domain name hype:

1) The head holder controls more than 30% of the scarce domain name resources: for example, through the data traceability on the chain, it is found that the 3-digit domain name holds the first-ranked address starting with 0xed02912 and the first-ranking 4-digit domain name starting with 0x270e962 The address is owned by the same chaebol, and some head holders are already shipping profitably;

2) Although the digital domain name is a scarce resource of the ENS system, it lacks official endorsement: this makes it difficult for community consensus to be twisted together, from 3 or 4 digits to 5 digits and then to three or four letters, which is obviously a departure from the With the original intention of 10k club, I went to 100k club. If the community cannot reach an absolute consensus on the digital domain name, it will undoubtedly dilute the scarce attribute of the digital domain name, which will ultimately be detrimental to the construction of the NFT cultural attributes;

3) Hoarding short domain names requires high renewal fees every year. Taking a 3-digit domain name as an example, a renewal fee of 0.2 ETH is required every year, which makes investing in ENS domain names only short-term speculation. The more likely it is to pull too long and sell. This means that ENS domain name NFTs have a strong demand for transaction depth, which is precisely the soft underbelly of the lack of liquid NFT market;

4) What we hype about NFT is actually not numbers or JPGs, but the expected development value of the cultural parent company behind it, just like investing in BAYC a year ago, and owning yuga labs’ APE airdrop, land airdrop, etc. a year later and other cultural added value. However, what is the expected value of investing in the Ethereum public chain digital short domain name now? The airdrop has already been sent, and even if there is another, it is impossible to favor the digital domain name market;

5) Domain names are good NFT cultural targets, but they are not the same as traditional .com website domain names. Website domain names are just in demand for brands, but at present the blockchain market is still a market that only pays attention to the back-end, and there are few Some brand owners are considering optimizing the user front-end experience, so the current demand for brand domain names is also very weak. Therefore, we cannot fully invest in products in the web3 era from the perspective of the Web2 era;

6) At present, domain names can not solve the needs of cross-chain scenarios. From ENS to TNS to unstoppable, domain name suffixes also include .eth, .ust, .bit.crypto, .coin, etc. As an entry-level product of web3, domain name suffixes Cross-chain demand is naturally the first to bear the brunt, which suffix can eventually become a .com-level phenomenon-level product, and it is not conclusive for the time being;

Overall, the NFT community’s pop-up show for the ENS domain name market was quite successful. At least it made everyone realize the charm of cultural output after domain name NFTization, and provided another way to the currently hot PFP market. The NFT track, but as for how long this direction can last, it is a test for the NFT community, every practitioner of web3, and even every developer in the Crypto industry. Because the NFT tone in the Yuga labs era is that everyone is led by the project party, and the NFT tone in the domain name era is jointly defined by every web3 practitioner.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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