What is the Ethereum Name Service (ENS) DAO?

Salomon Kisters

Salomon Kisters

Apr 14, 2023

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Built on the Ethereum blockchain, the Ethereum Name Service (ENS) is a decentralized domain name system that enables users to register domain names that are readable to humans and link them to any Ethereum address.

ENS proposes an open, decentralized, and flexible naming system (DNS) as an alternative to the standard functioning of centralized domain naming services. It gives Ethereum addresses a much-needed layer of abstraction, enabling more user-friendly interactions between users and the blockchain.

The development of the ENS DAO, however, has lately resulted in a dramatic shift in the ENS ecosystem.

In this article, we’ll explain the ENS DAO and provide you with the information you need to understand this exciting new development in the Ethereum ecosystem. Before we dive into the specifics of the ENS DAO, let’s first understand what a DAO is and how it works.

What is DAO?

A DAO (Decentralized Autonomous Organization) is a blockchain-based organization that operates without a central authority. It is essentially a group of network participants who work together to accomplish a common goal, but instead of being managed by a centralized authority, it is governed by a set of rules encoded on the blockchain. These rules are enforced through smart contracts, which are self-executing agreements that automatically execute when certain conditions are met.

Every member of a DAO has a say in the decision-making process, which is carried out through a process of decentralized governance. Members can vote on suggestions, make changes, and take part in the overall governance process. This allows for a decision-making process that is fairly democratic and transparent and where every member enjoys an equal say in the organization’s future direction.

What Makes ENS Vital For Ethereum Ecosystem?

The Ethereum Name Service (ENS) is a crucial component of the Ethereum ecosystem. It provides Ethereum addresses a much-needed layer of abstraction, enabling more user-friendly interactions between users and the blockchain. Without the ENS, users would need to memorize lengthy and complex Ethereum addresses in order to transfer and receive money, which can be a difficult task for those who are unfamiliar with the blockchain space.

The ENS also provides a way for users to associate a human-readable domain name with their Ethereum address, making it easier for them to receive payments and interact with decentralized applications. This is especially critical for organizations and people looking to establish a strong brand presence on the blockchain.

How is ENS Secured?

A Proof-of-Work consensus mechanism that necessitates miners to create fresh Ether helps secure Ethereum, which powers ENS. The Ethereum blockchain is secured by a group of decentralized nodes that validate transactions. ENS does not have a single point of failure and cannot be hacked as a result, thanks to Ethereum’s decentralized structure and over 10,000 nodes protecting the network.

ENS DAO Governance Structure

The ENS DAO is a decentralized autonomous organization that governs the ENS protocol and ensures its constant development and growth. It is managed by a set of rules encoded on the Ethereum blockchain, which are enforced through smart contracts. The ENS DAO is made up of members who hold ENS tokens, which gives them the right to participate in the governance process.

The governance process of the ENS DAO is designed to be highly democratic and transparent. Members can propose changes, vote on proposals, and participate in the governance process. Proposals can range from technical upgrades to changes in the governance structure of the DAO itself. Once a proposal is submitted, members have a set amount of time to vote on it. If the proposal receives enough votes, it is automatically executed through the smart contract.

ENS DAO Tokenomics

The ENS DAO is powered by a native token called ENS. Members who own ENS tokens are eligible to take part in the DAO’s governance. They are granted DAO voting rights, influencing its overall direction. The development of the ENS Constitution is one of the most significant partnerships involving ENS token owners.

For instance, the constitution is dedicated to not interfering with the owners’ right to name, extend, transfer, or withhold ENS names in order to build trust in ENS domains for users. Holders of tokens may also propose other constitutional proposals or changes, but they would need 100,000 votes to qualify as a voting candidate.

Similar thresholds exist in many other countries, where gathering signatures is required before a referendum can be voted on. Owners of ENS tokens can cast ballots for DAO directors, Web3 project funding, and other matters. This is comparable to thresholds for referendums in many countries, where getting signatures is necessary before a referendum may be put to a vote.

Owners of ENS tokens may also vote on issues such as choosing DAO directors and allocating funding to Web3 initiatives. The ENS Foundation, a Cayman Islands-incorporated organization, represents DAO legally in the off-chain community.

The total supply of ENS tokens is fixed at 100 million, of which 20% are currently in use. 90% of the tokens were kept in a reserve that was under the DAO’s authority; however, only 10% of them were first released. The reserve is intended to be used to pay for the ENS protocol’s further expansion and development in the future.

ENS DAO Use Cases

The ENS DAO has numerous use cases, both for individuals and businesses. Individuals can receive payments and interact with decentralized apps more easily by using the ENS protocol, which enables users to link a human-readable domain name with their Ethereum address. Companies can utilize the ENS to create a brand presence on the blockchain, facilitating client interaction with the discovery of their products and services.

The ENS DAO can also be used to fund and support new projects and initiatives on the Ethereum blockchain. By submitting proposals and voting on them, members can help to shape the future of the Ethereum ecosystem and support the development of new and more innovative applications.

ENS DAO vs. Traditional Domain Name System

The ENS DAO offers several advantages over traditional domain name systems. First and foremost, it is decentralized, meaning that it is not controlled by any central authority. This makes it more resistant to censorship and allows for a more democratic decision-making process.

Additionally, the ENS is built on the Ethereum blockchain, which provides a high level of security and transparency.

Another advantage of the ENS over traditional domain name systems is that it allows for the registration of domain names with any top-level domain (TLD). This means that users can register domain names with TLDs such as .eth or .xyz, which are not available through traditional domain name systems.

Future Developments of ENS DAO

The ENS DAO is still in its early stages, and there are many exciting developments on the horizon. Some of the future developments planned for the ENS DAO include the following:

  • Integration of the ENS Protocol: One of the most significant developments in the ENS DAO is the Integration of the ENS protocol with the Ethereum Name Service Manager (ENS Manager), which will allow users to manage their ENS domain names directly from their wallets.
  • Integration with Other Blockchain Networks: The ENS DAO is exploring the possibility of integrating with other blockchain networks, such as Bitcoin and Polkadot, to expand its reach and functionality.
  • Decentralized Website Hosting: The ENS DAO is working on developing tools and services that will enable the creation of fully-decentralized websites and applications that are hosted entirely on the Ethereum blockchain.
  • Improved Governance: The ENS DAO is constantly refining its governance structure and decision-making processes to ensure that it remains transparent, democratic, and effective.

The launch of ENS name auctions, which will enable users to bid on premium domain names, is an additional step. Users will have a brand presence on the blockchain and a brand-new, exciting way to get premium domain names.


The high level of technicality and complexity involved in the crypto industry sometimes discourages newbies from entering the crypto space. However, ENS overcomes this significant adoption barrier by making crypto more approachable and simple to use.

It converts lengthy, machine-readable public addresses into brief, memorable links that users can use for performing transactions and dApp interactions, and makes it possible for them to receive any kind of crypto and NFTs in their digital wallets.

On top of that, the ENS DAO, which airdropped 20% of the entire token supply together with the DAO’s activation, has also gained a lot of attention in the past few years. It is decentralized in the sense that no central authority has control over it.

This makes decision-making more democratic and strengthens the system’s resilience to censorship

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Please note that the Content may have been generated with the Help of AI. The editorial content of OriginStamp AG does not constitute a recommendation for investment or purchase advice. In principle, an investment can also lead to a total loss. Therefore, please seek advice before making an investment decision.

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