Thank you @Favvz for this research summary. I have personally used ENS and I find this study very interesting. This is the only in depth research paper I have seen about ENS as well.
I will also try to answer @jyezie’s questions about main use cases. Although, most of it was covered in the OPs Key Takeaway section, I will try to expand on it and give some context to it.
First to address the concern
I think definitely yes. They play a part in the NFT speculation market that is going on right now. The following facts seem to support it. Some of these numbers are just mind boggling.
- The entire NFT Market Cap is currently at $12 Billion.
- The highest sale for an ENS is 420 wETH.
- The market participants also speculate on the ENS token - which is a governance token of the Ethereum Name Service. ENS currently trades at ~$10 with a market cap of ~$200M While reaching an all time high of ~ $82 with a market cap of $1.6 Billion.
- This is also equally fueled by celebrities owning ENS and posting them on twitter among others. The current minimum price (floor) for 3 digit numerical ENS (Ex. 00x) is 14.5 ETH and the highest sale at 83.5 ETH for 003.eth.
- ENS in its peak also generated $1M a day in revenue.
These numbers goes to show that there is definitely more monetary interest in ENS trading than in its’ use cases. The question that still remains is - How can we aim for global mass adoption with such squatting (as shown in the OP’s post) of ENS names? Would we have the same problems as we have currently in the regular DNS?
ENS would continue to have value as long as the Ethereum L1 exists and continue to scale. To take it a step further, I think the same ENS problems/issues will also be in any other competing naming systems by other smart contract protocols.
Having said that, I think ENS is a perfect way for blockchain address both for visualization and memory. Every application and use case built on Ethereum will want to represent themselves with a .eth domain be it on twitter or in any future decentralized social media.
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The next big use case after using it as a wallet, is representing content hashes on a decentralized file storage system to point to some text or metadata of some sort, this data can also be a website. By having some website on IPFS one can obtain a Content Identifier (CID) which is a sha-256 type hash and the ENS records can be updated to point to that CID and hence your website. As far as I am aware, the website cannot be altered without changing the CID.
These websites needs to accessed through web3 browsers like Metamask or Brave. To overcome the browser limitation, there is something called ETH DNS where normal browsers can be used to access the ENS domain with .link at the end of the ENS like - https://vitalik.eth.link/ . Here is a reference if you want to dig deeper.
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I can also imagine some sort of identity related services using ENSs like voting in polls etc. Although I am not sure how can that actually be implemented.
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One can also create and rent out subdomains of an organization. I can imagine something like KFC.eth to have a subdomain like NY.KFC.eth. Synonymous to DNS and emails.
It is very exciting to see what applications and use cases unfold through ENSs as they currently seem to be limited as far as our imagination goes. I would like to end this comment by posing a question to the community. Will we have a universal decentralized domain naming system or is a multichain domain system the future? Given that .ENS now has Multi-coin support.