Business

Record surge in Ethereum Name Service domains sparks 90% rally in ENS

A handful of industries and techs are moving from Web2 to Web3, and with that move, awareness of blockchain technology is also spreading.

The Ethereum Name Service (ENS) is a project that aims to help ease the adoption of Web3 by making it easier for DApp users to interact with the Ethereum network. This is achieved by creating human-readable Ethereum addresses that can be converted to the normal machine-readable alphanumeric codes.

Data from Cointelegraph Markets Pro and TradingView shows that the price of ENS has surged 91.75% from its low of $14 on April 26 to an intraday high of $27.65 on May 2, amid a raging 24-hour period -Trading volume.

blank
ENS/USDT 1-day chart. Source: TradingView

Three reasons for the recent price reversal at ENS are the sudden surge in demand for 3- and 4-digit ENS domains, a new record number of domain registrations in April, and a surge in log revenue that has helped increase the funds available to ENS decentralized autonomous organization (DAO).

The demand for 3 to 4-digit domains is increasing

The sudden increase in the price of ENS began on April 26, and this move coincided with an increase in demand for 3- and 4-digit ENS domain names, which may have come into the focus of the non-fungible token (NFT) community.

blank
Daily ENS registrations. Source: Dune Analytics

Along with new registrations, secondary sales for ENS names on OpenSea reached a peak volume of 446 Ether (ETH) in the last week.

Some analysts suggested that the demand for shorter ENS domains could be related to NFT investors preferring the shorter tag reflecting their NFT’s token ID — but for now, this is an unproven theory.

Record domain registrations in April

The sudden surge in registrations in late April capped a record month for the project, which saw 162,978 new domain registrations, according to data from Dune Analytics.

blank
Monthly domain registrations. Source: Dune Analytics

The record month of growth for ENS also helped overall enrollment surpass the 1 million mark for the first time in history.

At the time of writing, the daily coin count for May 2 stands at 48,702, and since the project started, a total of 1,063,982 ENS domains have been minted by 393,894 unique participants.

Related: Concept and future of decentralized Web3 domain names

Increase in log income

As a result of renewed interest in ENS domains, the protocol saw its second-highest monthly revenue from registrations and renewals at $7,838,962.

blank
Monthly enrollment/renewal earnings for ENS. Source: Dune Analytics

This makes a total annual revenue of $42,767,760 for the protocol, which is ultimately funneled back into the project treasury for use by the ENS DAO.

According to ENS, the primary purpose of registration fees is “to prevent the namespace from being swamped with speculatively registered names.” A secondary function of the fees is to provide the ENS DAO with sufficient revenue to fund the ongoing development and improvement of ENS.

All ENS token holders have the opportunity to participate in governance votes through the DAO.

The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.