Crypto

Domain names in NFTs are a new fad for crypto speculators

Forget pictures of monkeys and other works of art. The new favorite of NFT and cryptocurrency enthusiasts is buying… domain names.

Just like the famous “. en” or “. com”, is “. eth”, addresses in the Ethereum blockchain. They give access not to websites, but to cryptocurrency wallets. And these addresses in the form of NFTs have been attracting growing interest from crypto enthusiasts for several months now. On April 28, the Bored Ape Yacht Club collection tokens — the most famous — even recorded less sales than Ethereum Name Service tokens on the OpenSea platform, according to specialized site CoinDesk.

Parallel to classic domain names

Since its debut in 2017, the Ethereum Name Service (ENS) has been a registry of addresses on the Ethereum blockchain. Their role: to facilitate access to the addresses of cryptocurrency portfolios. “In the blockchain, we are identified by a rather complex code consisting of a set of numbers and symbols. It’s not easy to convey or remember, and it’s not the easiest way to identify yourself,” explains Simon Polroth, European Affairs Manager of the Digital Asset Development Association (Adan).

To fix this, ENS “translates” Ethereum addresses into a domain name (such as numbers or a common name) ending in “.eth”. This is the same principle as “classic” Internet domain names: a domain name such as lesechos.fr allows you to associate a readable and understandable name with an IP address consisting of numbers. Thus, ENS is a service comparable to the Domain Name System (DNS), which was created in the early days of the Internet.

Easier Access to an Ethereum Address

Registering a new address is fast, instant, and costs at least $5. Once created, “we can host anything that works in the Ethereum ecosystem,” notes Simon Polroth. The eth address corresponds to the “wallet” (digital wallet) and therefore allows you to see the history of transactions, as well as, for example, owned NFTs.

“The address can also be used for donations, which is easier than copying and pasting a long address consisting of numbers and letters,” adds the cryptocurrency specialist.

Since 2017, the functions of the domain name have expanded. Addresses in eth allows you to link to other cryptocurrencies.

“We are speculating on the future”

While the service has been in existence for five years, the number of domain name registrations with ENS has skyrocketed in recent months. More than 378,000 new addresses were registered in July, according to ENS. This enthusiasm is due to the fact that once purchased, domain names are NFTs and can be resold on platforms such as OpenSea. And some names can be very expensive.

“We can really draw a parallel with the domain name hijacking in the early 2000s, when people were speculating on them,” recalls Simon Polroth. “The idea is to say that if Ethereum is the financial infrastructure of the future, owning a domain name could be useful in the future. Finally, there are few real uses for domain name ownership today. “We are speculating on the future,” shouts a cryptocurrency specialist.

Collection Phenomenon

Since the beginning of ENS’s existence, trademarks and common names have been the most popular, as well as pseudonyms and personal names. Chanel.eth or nike.eth, for example, sell for tens of thousands of dollars, reports Quartz.

But interest has been focused on domain names with three or four digits for several months now. “It is clearly a rather speculative phenomenon of the expectation of the rarity and usefulness of these names,” analyzes Simon Polroth. It’s hard to say what sparked the movement, but “there’s a collecting phenomenon going on, like in the case of the Bored Monkey Yacht Club,” he continues.

There is still a price to pay to become the proud owner of a collectible – 187.eth or even 000.eth – currently the cheapest three-digit domain names on the OpenSea platform are traded for over $40,000. As for 000.eth, it sold for almost $300,000 in early July.

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