Ethereum Name Service (ENS): Explained

Now those who are familiar with blockchain or distributed ledger technology, will also be familiar with the concept of decentralized application (dApp). The Ethereum Name Service (ENS) is nothing but a type of dApp, which is based on the Ethereum blockchain.

Those looking to get a domain name, for their wallet addresses, can make use of this ENS. The entire service is based on the idea of smart contracts. An user can choose to get a domain using this service, post which, they can transfer their funds directly to a name instead of searching for an address.

The benefit of ENS is such, that it eliminates the need to copy or type long hexadecimal addresses. So while sending funds, a simple domain name will suffice, instead of typing out a very long address.

It enables users to conveniently browse and gain access to files on various networks, and also allows users to interact with their smart contract at mycontract.eth and check out swarm-hosted sites listed at swarmsite.eth. One massive benefit of ENS is that because of being based on blockchain, it does not have the same security concerns that DNS does.

The system is completely decentralized, and guarantees full security. Users with a domain on ENS can also create new sub-domains and distribute them as they deem fit. The creation of new domains under the “.eth” top-level domain can be done via an auction process hosted on the Ethereum blockchain. The auctions process is completely based on a Vickery auction model.

What Happens During Auctions?

During an auction, the user places bids on the name that they want to secure for themselevs. After that, a three-day timer starts, which opens that name for bids from other users.

During that period, other users can bid on that same name. However, the details of the bids remain hidden in this stage. The entire process is anonymous, and other users won’t know what the bids are. Post the three-day period, a two-day “reveal” period will begin, during which, all bidders must disclose the details of their bids. Whoever doesn’t place the highest, the system refunds their money without a 0.5% fee that gets ‘burned.’

Once the ENS auction is won, the winner gets the name with the interval of the chief registrar. ENS is thus a great way to secure a domain name for yourself.