In November 2021, decentralized domain name project ENS (Ethereum Name Service) issued its token and airdropped it to the community. During the airdrop, nearly 138,00 addresses which holding Domain Names received about 46,000 ENS tokens, then worth about $5.5 million. It was the largest airdrop in 2021.
Just like the rush for .com domain names in the early days of the internet, many users registered .eth domains in the hope of profiting.
After ENS, domain name projects on other public chains also received attention. Many people registered domains and waited for the next explosion.
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What are Decentralized Domain Names
The DNS (Domain Name System) is the hierarchical organization of domain names operated by ICANN (Internet Corporation for Assigned Names and Numbers) in the United States, whose main job is to manage the assignment of domain names and IP addresses.
Decentralized domain names are built on a public chain. They work by converting addresses into easily remembered and recognized characters. For example, ENS is built on Ethereum and offers Ethereum domain names ending in .eth.
The status of domain names can be found on the ENS website. For example, Vitalik Buterin, uses vitalik.eth instead of his original 42-digit combination of numbers and letters for his wallet address.
In addition to the uniqueness, convenience, and tradability of traditional domain names, decentralized domain names have the following features.
- Decentralized: Unlike the centralized operation of DNS, decentralized domain names run on the blockchain and have the characteristics of non-codifiability and deletion.
- Easier interaction with the blockchain: Domains can link wallets and simplify operations. Decentralized domains are being integrated with other DApps. Users can login to DApps and wallets through the domain name, which also greatly enhances the user experience.
- Security: Due to the security of the underlying public chain, decentralized domain names can reduce the problem of server hacking or domain theft.
- As an on-chain identity and brand symbol: The decentralized domain name replaces the wallet address as the identity representation for on-chain users. On Oct. 8, ENS announced support for NFT avatars in profiles, which will also be displayed in DApps, further developing this aspect of on-chain personal branding.
However, decentralized domain names also have some problems:
- Not natively integrated with mainstream browsers. ENS and Unstoppable have been integrated with privacy browsers such as Opera and Brave. However, mainstream browsers (such as Chrome) still do not integrate with decentralized domains, so users cannot search for the corresponding website directly after entering the domain name in their browser.
- Restricted by chains. DAS is currently the only domain name project that supports cross-chain, and most of the cross-chain needs are still unmet.
- Unclear future. Unlike traditional domain names that had important roles like website functionality and content indexing, the domain name project is now more of a mapping of addresses.
With the development of Web 3.0, a new system will likely become an integral part of the new internet. As such, several decentralized domain name projects have emerged that now allow people to purchase domain names on the blockchain.
Unlike traditional domain names, blockchain domains can integrate DApps from various chains and could be more secure. However, at present, decentralized domains still cannot be accessed by most browsers, and development is at a very early stage.