Ethereum Domain Names Remain Popular as Bear Market Takes Hold
May was a record-breaking month for Ethereum Name Service domains.
More than 356,652 ENS domains were registered in May, double the previous record, according to Dune Analytics. That means customers are continuing to establish domains with the .eth address even though crypto is in the grip of a bear market.
Even so, ENS’ token has lost half its value in the last 30 days compared to a 36% drop in Ether.
ENS domains are NFTs that allow users to connect a ‘.eth’ domain name to cryptocurrency wallet addresses. This makes it easier to use cryptocurrency wallets by allowing its owner to request payments to a simple ‘.eth’ domain name that can be easily read by humans, rather than sharing an 64-character alphanumeric code.
The service is akin to the internet’s Domain Name System, which allows users to access websites via simple domain names instead of typing in the specific IP address of each website they wish to visit. ENS domains are built on decentralized smart contracts, meaning they offer greater censorship resistance and privacy than the internet’s DNSconventional domains.
ENS celebrated its impressive month on Twitter. The team flagged that the ENS DAO accrued a record $9.6M in revenue through registration fees during the month, and that 10,500 ETH worth of NFTs changed hands on OpenSea. The ENS DAO treasury now holds $858M in assets.
According to DappRadar, 64,634 unique wallets trading ENS domain NFTs drove $21.2M in volume over more than 274,000 trades during the past 30 days. ENS ranks as the top Ethereum-based NFT project by number of traders and sales, and the 17th-largest collection by volume.
Across all chains, ENS ranks second by number of traders behind Axie Infinity, and fourth by total sales.
The surge in activity came after ENS launched four-digit names, domain names solely comprising four numbers, at the end of April. The 10,000 domains sold out in just six hours for $200 each. Floor price for both three and four-digit names surged, with three-digit names commanding prices in excess of 50 ETH.
The spike in activity drove ENS to the top of Ethereum’s burn leaderboard, with the protocol destroying 1,274 ETH in 24 hours on May 3. The leaderboard tracks projects that are responsible for the largest sum of ETH removed from supply or “burned” through transactions fees, with the base fee of Ethereum transactions being burned since the EIP-1559 upgrade went live in August of last year.
Ultrasound Money currently ranks ENS as the eighth highest burning protocol of the past 30 days with 2,122.6 Ether or $5M worth of ETH burned during the past month.
Four-digit domains are fetching prices of roughly 2 ETH on secondary markets, while three-digit domains are going for upwards of 7 ETH.
The record-breaking month did not translate to value for ENS tokenholders. The token crashed 54% amid a brutal month for crypto, and is down nearly 87% since peaking during the weeks following its November airdrop according to TradingView.