Understanding ENS and the Power of Decentralized Identity

The Ethereum Name Service (ENS) is a domain name system built on the Ethereum blockchain. ENS domains are similar to traditional domain names (e.g. google.com, console.xyz), although unlike these traditional domains, ENS names are decentralized. This means that if I own an ENS name, castig.eth, then it’s 100% owned by me.

Why buy an ENS name?

Most people are familiar with domains like .com, .net, .org, and .xyz—these are called top-level domains (TLDs). TLDs are sold on domain registries like GoDaddy.com. But behind GoDaddy (which is just a distributor), all domains are owned by one organization, the Internet Corporation for Names and Numbers, known as ICANN.

For anyone passionate about privacy and decentralization, the centralized ownership of the Internet’s global address system is problematic. For example, the Electronic Frontier Foundation has reported numerous times how centralized domain names represent a threat to uncensored content.

The solution: ENS.

ENS names (.eth) provide a censorship-resistant domain name for both people and websites. They do this through the use of the Ethereum blockchain, and through the decentralized organization (or DAO) that manages the project, rather than one centralized company.

In this piece I chat with Alisha.eth (@futurealisha), Governance Lead at ENS Domains. In our talk we discuss the future of ENS, public goods in Web3, and the ENS Constitution.

Why is ENS important?

Alisha.eth: ENS was my gateway into the Ethereum community. That’s often true for a lot of people. I first got into Bitcoin around 2014 or 2015, when I accepted Bitcoin as a form of payment from a customer on my Shopify store. I became more interested in Bitcoin in 2017. After the bull run came back, in December 2020, that’s when I discovered the Ethereum community.

I happened to be looking at ENS when one of my domain names had expired. I managed to register it. (I’m like one of those people who register a domain every time they have a random business or project idea.)

What is exciting about ENS?

Alisha.eth: I understood .eth names as ENS—an evolution of DNS. I get that ENS is domain names on the Ethereum blockchain. I started to create content with my Crypto Native podcast. I thought that it was really interesting that ENS was a public good being used in a tangible way.  

Now that I had an .eth, I could use it as my identity on Twitter. I thought that was really cool.

Public goods—things like military defense or clean water or clean air—can feel very removed from our day-to-day experience, so it can be hard to appreciate what it would mean if those public goods didn’t exist.

However, Nick Johnson, the founder and leader of ENS, created ENS with the intention from the beginning that it would be a public good. So actually, all of the .eth registration fees have always gone into a multi-sig (a wallet with multiple keyholders for shared-ownership of funds).

That money has never gone to True Names Limited (TLN), the company that I am contracted to, which is like the dev shop for ENS. It’s never gone straight into the pockets of the devs or anything like that, because as a public service that treasury felt owed to the community.

There’s never been a better time than the present to build a for-profit company in Web3. And I have so much respect for Nick Johnson, for the fact that ENS didn’t take on VC investment and kept building through the bear market so that the team could always bake in the best interests of the protocol—and essentially, humanity—rather than prioritizing the motives or incentives that might benefit their investors.

How did you get involved working with ENS?

Alisha.eth: I had a Web3 podcast that I invited Nick on, and we hit it off. He could tell I was excited about ENS. Then I joined ENS as the community manager. As soon as I joined one of the team members said, “We are launching a DAO.” And I said, “Cool, what’s a DAO?”

How did ENS decide to become a DAO?

Alisha.eth: The reason that ENS decided to launch the DAO, in November 2021, was because ENS had matured over the nine months before that, and the treasury had also started to get to a point where the funds were sitting there, unutilized. It just seemed to be the right time to launch a DAO. To do that we launched a token, which is the Governance token, the ENS token, which can be used to govern the protocol.

What are the responsibilities of the ENS DAO?

Alisha.eth: The two primary uses of the DAO are protocol upgrades, and development and maintenance.

The DAO handles voting on whether to move forward with the name record contract, which is currently being developed. This will be put to a vote by the DAO, and then the entire community—the token holders—will vote on that. Then the other major thing the DAO does is distribute the treasury funds.

Castig: There’s this whole history of DNS that I don't think we really appreciate. We take it for granted sometimes. But essentially, the domains—for example, google.com, facebook.com, yourwebsite.org—are all part of DNS (the domain name system). Since the beginning of DNS in the 1980s, there’s always been this looming question of, Who owns the domain name servers?

Back then, DNS records were managed by one man in San Diego named Jon Postel. He was the sole person, and he had a lot of power. He could potentially take down the Internet in one day, if he just deleted all the records. This was a real concern.

Since then there’s been this entire debate (for two decades) around who owns the names of the Internet. It went from John Postel to ICANN. And then it wasn’t until the Snowden revelations, in 2013, that ICANN was finally decentralized, so that it wasn’t owned just by the United States, but by a global alliance.

What is a public good? And how does Web3 create public goods?

Alisha.eth: When I came across the Bitcoin community, lots of people were building open-source software, and yet they struggled to capture donations and grants from the community just to sustain their work. If it’s open-source then often developers don’t charge for it.

The traditional standard—the standard economics definition of public good—is that it’s nonexcludable and nonrivalrous. That means that you can’t stop someone else from using the good, and if you use the good, then it doesn’t prevent someone else from using it. A public good doesn’t diminish someone else’s ability to also use that good.

Ethers.js, within the Ethereum ecosystem, is a good example of a public good. Ethers.js is a library, and you can use that library freely, yet your using Ethers.js doesn’t diminish anyone else’s ability to build or use it.

And so, open-source [projects] fall into the traditional definition of [public goods] very easily.

My hope is that the ENS public goods working group will actually do a lot to help fund that particular category of public good.

But within Web3, due to Gitcoin, the definition of a public good has expanded. Gitcoin is a platform where people get paid to work on open-source software. There are grants from every corner of the Internet that are putting forth this idea that open source is a public good. These are projects that are serving the public and that are providing positive externalities to the world.

Chris: When we talk about DAOs, there are a lot of communities or groups of people looking for ways to organize their members. We hear a lot about coordination, especially in the Gitcoin world.

How did ENS come up with the idea for the ENS airdrop and voting delegation?

Alisha.eth: The ENS airdrop, the distribution, and things like that were heavily inspired by Uniswap, which I think was the first in terms of the airdrop mechanism.  

Regarding delegation, we took a lot of inspiration from Gitcoin, which had launched a couple of months earlier and used delegation. So, we observed bits and pieces that DAOs had already rolled out. The thing about a constitution, and about DAOs in general, is that you can have a token, but I would say that for DAOs to really thrive, all the token holders need to be rowing in the same direction.

And so, if you imagine a longship, and every token holder as the holder of an oar, the way that I think about it is that something like a constitution is like a coxswain (the person who sits at the front of the boat).

The ENS Constitution is like the North Star. And no matter what the conditions of the water that you’re in, as long as you know which direction you’re heading—say, you’re heading north—it is always there to align you. It doesn’t matter where these different rowers are holding the oars.

What is the makeup of ENS token holders?

Alisha.eth: The ENS token holders are distributed geographically—there are all sorts of people. I think, 137,000 different wallets were eligible for the token for the ENS airdrop.

Why create a DAO Constitution?

Alisha.eth: The DAO Constitution is a straightforward way to set out the intention of the ENS DAO.

And I think it’s been effective. It’s actually incredible how effective it’s been in the sense that if you go to the ENS forum, you can see references to the Constitution and conversations, and the legitimacy of the Constitution is derived from the fact that to claim the airdrop, you had to either approve or reject the different articles—the five different articles of the Constitution. The Constitution was a way to get legitimacy. It means that every decision that is made by the DAO from here on, as long as the Constitution stands, can be done in alignment with that, and there will be no major dispute, because everyone, or a supermajority of people, agreed to the Constitution.

Can you give a summary of the ENS DAO Constitution?

Alisha.eth: Sure.

I. Name ownership shall not be infringed

Alisha.eth: That means that the name ownership (a.k.a., owning an .eth name) shall not be infringed. That relates to the fact that if you are a member of the DAO, there is nothing anyone can do—not the core team, not the DAO—to take your ENS name away from you.

II. Fees are primarily an incentive mechanism

This means that the reason the fees exist in the first place is to prevent squatting. And to ensure that someone can’t just write a script and register a gazillion names.

The $5 a year for five characters or more was based on the fact that it’s enough friction for someone to have to think, “Do I want to renew this, extend the registration or not?”

A big part of how we want ENS and .eth to be used is as an identity on the Internet. And so you know, it’s no good to anyone if these things are just sitting in wallets registered; we really want people to be using .eths.

III. Income funds ENS and other public goods

This means that income from fees must be used to support ENS as a public good. If someone comes to the DAO for a grant, through the working groups or a proposal, you can essentially look at the Constitution and say, Okay, is this going to fund the maintenance or development of ENS Protocol? Is it going to benefit the ENS ecosystem? Or is it a public good? And if it’s none of those things, then it’s essentially unconstitutional.

VI. ENS integrates with the global namespace

This is about integrating the global namespace. Just because, again, Nick Johnson has been really intentional about ENS being complimentary with DNS.

Will ENS become a TLD like .com?

Alisha.eth: I think it’s not in the best interest of .eth to be a TLD. I think that .eth as the native ENS domain makes sense. And then every other kind of DNS extension can be integrated into ENS. But at the moment .eth is reserved for Ethiopia, the country. We are working actively to see if the DAO can secure that. Just kind of peace of mind.

ENS vs. DNS: Are you saying they will merge?

Alisha.eth: Everyone thinks of .eth names when they say ENS. So if I say alisha.eth, people are like, “Oh, cool, you've got your ENS name”. But if I went by alisha.xyz, and I had integrated it into ENS, which you can, that would also be an ENS name. It's just that at the moment, we’re kind of early in the adoption phase. And also just based on the features that are available with the platform, DNS integrations aren’t really a big deal.

As an example, some integrations that I fantasize about are things like Shopify, or Adobe integrating its DNS into ENS, and then issuing all of its users subdomains, and those would all be ENS names.

And so for example, if you have a Shopify store, or if I had like, alisha.shopify.com, I could use it to receive funds directly to my wallet on my Shopify store, because it’s integrated with ENS, which means it can be used to receive crypto. I know that’s a mind bend.

Are you saying we can take console.xyz and merge it with our ETH name?

Alisha.eth: If you have a .eth, that doesn’t mean that you obviously have any of the TLDs. And if you have any other TLDs, it doesn’t mean that you have the .eth.

We’re actually in the process of shaping out a name wrapper, something called CCIP read, which basically means it will become easy for organizations, companies, and institutions to issue subdomains, literally in their own servers, to their users or community. I don’t know if Coinbase has officially announced this, but it issued its users subdomains with ENS on cb.id. And so that’s like a DNS; you know.

Chris: Keep us in mind as we build Console. At Console we are integrating .eth names. To me, I believe identity is the building block of the internet, and I think we take it for granted. And I think it’s still early days for Web3 to run. I think we’re still building the infrastructure and I think you guys are leading that, and so I am just super excited to watch and support what you guys are doing.

Where can we learn more about you and ENS?

Alisha.eth: People should follow the main ENS account, @ENSdomains. And I’m @futurealisha on Twitter, and pretty much everywhere.

Note: This post has been edited from the original audio for grammar and clarity.