Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Nick Johnson: ENS – An Update on the Global Naming System for Ethereum

Episode Date: May 25, 2022

The Ethereum Name Service (ENS) allows users to register .eth domain names, which can be used natively in some browsers and all Ethereum wallets. It provides a solution to long crypto addresses with a human-friendly format, analogous to DNS domain names that point to IP addresses. There are now 1.1 million registered domains on ENS.Nick Johnson, Lead Developer of ENS, was last on the show 5 years ago when ENS had just been created. We had him back on to give us an update on how the project had evolved and to chat about the kinds of content ENS domains point to, the ENS token airdrop, the governance of the platform, and the road ahead, particularly with respect to scaling solutions and spiralling Ethereum gas costs.Topics covered in this episode:What is Domain Name Service (DNS)?How do you register a top level domain?The relevance of ICANN (The Internet Corporation for Assigned Names and Numbers)The kinds of content ENS domains point to and some use casesThe fees associated with .eth domainsThe ENS token airdropGovernance - how the process of using delegates workedThe kinds of decisions delegates have made so farTrading ENS tokensNick's views on the major challenges facing the ethereum ecosystem todayEpisode links:Episode 183 - ENS – A Global Naming System for EthereumICANNENSENS GovernanceENS on TwitterNick on TwitterSponsors:ParaSwap: ParaSwap aggregates all major DEXs and makes sure you beat the market price at every single swap and with the lowest slippage - paraswap.io/epicenterChorus One: Chorus One runs validators on cutting edge Proof of Stake networks such as Cosmos, Solana, Celo, Polkadot and Oasis. - https://epicenter.rocks/chorusoneThis episode is hosted by Friederike Ernst. Show notes and listening options: epicenter.tv/445

This is Epicenter, episode 445 with guest Nick Johnson. Welcome to Epicenter, the show which talks about the technologies, projects, and people driving decentralization in the blockchain revolution. I'm Friedricha Ernst, and today I'm speaking with Nick Johnson, who is the founder of E&S, the Ethereum Name Service, which is a service that lets you register an Ethereum top-level domain. But before we talk with Nick about E&S, let me tell you about our sponsors this week. So our first sponsor is Paraswap. Paraswap is a multi-chain dex aggregator. So this means that through Paraswap, you can easily access the liquidity of various different decentralized exchanges. The protocol automatically finds the cheapest liquidity for you so you can trade knowing that you're getting the best price.

Paraswap is also very gas-friendly, helping you to keep your transaction costs low. Paraswop recently added support for Avalanche, Polygon, B, SRAP. and Phantom. And you can also use Paraswap directly from your ledger and ledger life. In addition to that, they are also becoming a DAO. So if you have any PSP tokens, this is something that you might want to look into. The Paraswop DAO just voted for a gas refunds program, and this allows Paraswap Stakers to get up to 100% gas refund on their trades on top of

their auto-compounding yield. Visit Paraswop to learn more, pariswop.io slash epicenter. Our other sponsor today is Chorus 1. So Chorus 1 secures blockchains and earns rewards without this needing to be energy intensive or complicated. And by staking your assets with Chorus 1, you contribute to network security and earn rewards too. Corus 1 has been a pioneer in this space since 2018 and secures billions of dollars in assets on over 25 decentralized networks, including Solana, Cosmos and Ethereum. So if you're an institution or want to run. your own branded note, you can also use Chorus One's white label service and their battle-proven

infrastructure to participate in proof-of-stake network works in an easy and direct manner. Head over to chorus.1 and start your staking journey today. So, hi Nick. Thanks for joining us again. Hello, it's a pleasure to be here and shocking to realize it's been so long. Yeah, so just before the show, we actually looked it up and it was just over five years ago. So five years, five years in normal time is a long time. Five years in crypto is like... Two eternities, yeah. Two eternities ago.

So five years ago, you were still at the Ethereum Foundation, but you were already working on ENS. And we actually already talked about ENS back then. So I think, first of all, an update is in order, but maybe let's rehash what E&S is first. So ENS is kind of... It's an equivalent to the domain name service that the internet has. So maybe let's talk about the domain name service first. So what does the domain name service do?

What are the responsibilities and duties? So the primary reason most people interact with DNS, the domain name service, is to resolve websites these days. But of course, it was developed before websites even existed. and the basic purpose of it was to name servers, name machines out in the world. And it was there to replace, you know, the original solution when the internet was very small indeed, which was just having everyone had a file listing all the computers on the internet and what their names were, which worked well enough when there were 20 of them and they were all universities and not so well as it grew.

So the DNS was the Internet's first scaling solution for names, and its goal was, in many respects, very much the same as ENS's, which is to ensure that end users don't have to deal with long and difficult to memorize numerical identifiers like IP addresses or in the case of ENS like Ethereum addresses, but can instead use a simple human readable name to identify whatever resources is that they're trying to look up. So how is DNS administered? It's, is it a non-profit? So ENS has a DAO, the creatively named ENSDAO, and the DAO administers most of the sort of levers and switches that control ENS. So it controls how name registrations for DOTETH names happen. It controls the reverse registrar, it controls pricing and so on and so forth. there is one thing that it still doesn't control, which is what's known as the

the ENS route, which gives the power to create new top-level domains and replace existing ones and so on. And for now, that is still under the control of the keyholders, who are a group of seven individuals from the ecosystem who are sort of entrusted with the route. In the short to medium term, that will also shift over to the control of the ENS Dow. Once, you know, we're confident that everyone's confident that the Dow's been functioning well and is able to take on that responsibility. Other than the Dow, there's the organization I had called True Names Limited and we basically we develop E&S.

So we build the infrastructure, we write smart contracts and so on to keep things running and improve things. Cool. So the Web 2 equivalent or Web 1 equivalent even, the DNS, how does that function? Is it a similar setup? Administratively, the route is controlled or managed by an organisation called IANNA, the Internet Association for Names and Numbers. I may be fudging that.

And the majority of top-level domains are controlled by an organisation called ICANN, the Internet Corporation for Names and Numbers. and they are the ones that control, you know, that sort of hand out contracts to the owners of dot com and dot org and dot domains and every other top level domain you can think of with the exception of the country code ones. And then those are all managed individually but under ICANN's oversight. And then finally you have the country code domains like dot nz and dot us and, you know, dot UK and so forth. And they're all administered by their individual countries. So the DNS is actually fairly decentralized as well. It's fairly decentralized.

Okay. So I've always wondered, and I mean, you've got fast-hand experience with this. How do you register a top-level domain with the DNS? Because, I mean, you guys have .eath, right? Yes. So it's not a simple process. The internet started off with just three general purpose top-level domains. dot net and then all the country code domains.

And there wasn't really a process for registering new ones. Some time ago, and I think it was around 2005, I can decided they were going to auction off a whole lot of new top-level domains, which was a controversial move at the time. And they basically people could apply to the option. And then if multiple people wanted the same top-level domain, they all bit against each other. and if not then there was some minimum fee you had to pay in order to get it

and you had to sign up to their terms of service effectively and agree to administer it the way they think domains should be administered and so on and so forth. And that's what led to the current explosion of top-level domains that we see today. They haven't actually run another one of those since then, so there's no generalised process for getting a new ICANN top-level domain. The whole, the route in general is controlled by IANA, but generally they've handed off responsibility to ICANN into the countries.

So if you want to get a domain, your top-level domain, your options are basically I-Can or somehow convince Leanna that your case is so exceptional that it should bypass all of these steps, which may be the right solution if we want to try and get Dot-Eath into the route. But we'll prove to be a long and complicated process if we do pursue that. and just to complicate things further, the three-letter country codes such as USA and NZL and I don't know what Britons is, are also reserved. They're not actually given out to the countries, unlike the two-letter codes, but they're sort of held back and weren't available to bid on in ICANN's auction and so forth. and Ethiopia's three-letter country code is ETH. So, you know, the further complicating factor there is that Ethiopia has some sort of implied claim to,

or at least write a first refusal to that. And that's sort of a double-edged sword, I guess. On the one hand, you know, you might see that as a threat, but no country has expressed any interest in using their three-letter country code. On the other hand, it practically guarantees that nobody's going to try and register dot-eath with ICAN, you know, or if they do that it will be rejected. So we have a reasonable assurance that it's going to stay the way it is. So basically, because it's not registered with ICAN,

so basically if I put your nick.eath into my browser, it will only resolve if I have certain plugins installed like MetaMask, right? Yeah, if you have MetaMask or a couple of others, or if your browser directly supports it, like Bray. does, but otherwise no, it won't resolve. Okay, and there's this trick to kind of put link behind the ETH, right? ETH. How does that work?

So we originally developed that in association with IPFS, and basically we registered ETH. Just a standard second level domain, and then we set up a service so that all the subdomains map to E&S, basically. So if you enter nick.eath.link, then you're querying our service at eith.link and it looks up nick.eath, and then it uses that to resolve it and serves up the content from there. So it's a gateway that anyone can use. And since we launched it, Cloudflare has taken over responsibility for that, so they now host that. And a second service has sprung up from the community, eth.limo.

And similarly, you can add. You can add.limo at the end or replace.link with dot limo, and you get the same result. you get a distributed gateway. Oh, cool. I will try the limo one. I didn't know that yet. Fantastic. They are often faster than Cloudflare,

which is a pretty big tick in their book. Nice. Super nice. At the technical level, the essence of it, it maintains a big smart contract that has registry of other registered E&S domains, right?

Yes. So what kind of content can E&S domains? means point two. So the central registry that you mentioned only has two records for each domain. It has the owner and it has the Resolver. And the Resolver is another contract and its job is to actually answer queries about that domain. And that means that the system is very flexible. So at the moment, our public Resolver, which is sort of the default implementation that everyone can use, supports a large number of things including Therium addresses, addresses for other

blockchains, content on IPFS, Rweave, swarm, etc. Profile fields such as an avatar, a background image, email address, Twitter handle, etc., etc. And just arbitrary text records. So it's been used for a number of other things as a result. And the nice thing is that it's permissionless. So anyone can add a new field to their own resolver and deploy it and use it without needing to upgrade the entire ENS system or come to agreement with everyone. Obviously, it's helpful if people standardize on their things because standards make it more widely usable, but there's no obligation to do so.

So it's a very, you know, it's decentralized in that sense, and it's a very easily extended system. Ah, okay. Interesting. So what are the use cases that people use it for most? I mean, so basically, if you look at the total number of registered domains, what? Yeah, what's kind of the distribution across these use cases? Do people actually make use of these? Yes. So I'd say that probably the primary use case is, of course, resolving to E&S names to Ethereum addresses, followed by people using them as personal profiles these days.

So in addition to resolving to an address, it also has a profile picture and it has information about their social media handles and so forth. And there's a lot of D websites now where you can log in and it will use that profile information. Secondary to that would be people using addresses for other blockchains, embedding those in their EnS profile, and then distributed content primarily on IPFS. So there's a lot of D-Web sites that rely on, you know, rely on an Ethereum EnS name. For instance, NOS hosts some of their sites via ETH.Link. We do.

We do. Fantastic. So this has been functional for a number of years, right? How many domains are currently registered? We just crossed the mark of a million active domains. If I load up the console now, it is showing me we're now at 1.1 million active names. So in terms of actually registered, since if some of them expired, it's more like 1.2, 1.3. and if you're if you're curious in the last seven days people registered 400,000 years worth of registrations,

which always boggles my mind to think of like, you know, the equivalent of putting them in to end to go to the moon sort of thing, you know. Cool. So the main challenge for E&S today is I see it currently is the level of fees. So I mean, basically, if I think back, back in the day, registering an EMS domain, basically, there's a fee. So basically, it's nominal. So basically for five or more letters, it's something like $5 a year or something. It's pretty low. It goes up for four and three letter domains.

But, I mean, so basically the, especially the $5, they pale in contrast to the, you. Ethereum gas fees. And of course, this was not always the case, right? So how do you guys think about existing on an incredibly expensive Ethereum mainland at the moment? Yeah. Well, I mean, I guess, you know, silver-lying in everything the past week or so has made it a lot cheaper. But in terms of a long-term solution, it is definitely an issue. And it is, as you observe, an awful lot more expensive than it used to be. The short term, like the easy solution is just register for more years. Like, you know, don't renew it every year because you'll say it costs no more in gas to register

for 10 as it does for one. But obviously that is only, you know, a mitigation, not a solution. The real solution we're working on is enabling ENS records to be stored off chain, but still verified by the main ENS infrastructure. And so that's something called EAP668 or CCIP read. And the way it works is effectively you go to resolve the name and the resolver tells you, oh, in order to answer that question, I need you to fetch some data for me. And it asks you to go off and fetch it from a gateway to some other chain.

So that can be an L2 like optimism. It could be another L1 like Polygon. It could even be a permission database with an HGB API, which then returns the information needed to. resolve the name along with whatever's needed to prove the accuracy of that. So if you're hosting the data for your name on an L2 like optimism, it can return a complete state proof to prove that the value is correct. And then the original resolver gets that data back and can verify it's correct and return the result to you. And all of this happens at a call, not a transaction. So the end result is

once you have a one-time fee to set it up on a name, but then after that you could manage your records elsewhere without any L1 gas fees at all. And you can do all of this for subdomains too. So you can buy a domain, you can set it up using this, and then you can issue subdomains and set their records or without any L1 gas fees either. Cool. So does the register, so the person registers,

do they have to decide which infrastructure they want to use to register? So can I decide whether I want to do this an optimist or a polygon Or is that something you guys kind of said for everyone? So for now, the registration will still take place on Mainnet, but when you do so, you'll be able to select a gateway to use so that all further management takes place on the external system of your choice, basically. In the longer term, we may be able to move the registration itself onto an L2, but unlike this solution, we would have to pick just one L2 or off-chain system

as the solution. And given how nascent this whole environment is, we're very hesitant to sort of pick one and anointed as the ENS chain, you know. And we also anticipate that a lot of end users will not register their own second level eth names. They will use subdomains from wallets or from other providers or people who have set them up

for free or cheap subdomains and so forth, in which case they never need to pay an L1 gas fee at all. Oh yeah, that makes a lot of, sense. So how do you guys decide which layer twos and other networks to support in this? Well, so the nice thing is that like the Resolver system itself, this is permissionless. Anyone can write a gateway. Obviously, not everyone has the skills all the time to write a gateway. So we've already released the initial support for this with libraries and server side code and so on for doing this yourself. But our next step is to start to build this out for certain L2s initially.

and we're doing that in conjunction with chain link. And the initial target is optimism, followed probably by arbitram. And then we'll start looking at like non-EVM L2s such as ZK Sync and also non-L2s such as Polygon potentially. Things get a little more complicated when you move away from, you know, L2s that are EVM-based and trustless. I mean, I understand that that's technically a lot more challenging. But so basically are there plans to kind of expand out into the wider blockchain ecosystem?

So for instance, like cosmos or pocket dot. I mean, how do they feel about having an ETH domain? That's a good question. I guess, you know, I'd point out that we also have DNS integration, so they're welcome to use any of the other top-level domains if they don't like dot-eath. and when the next auction comes around they could always bid for dot Bitcoin or dot Solana or whatnot. I think we're going to keep working on new

sort of officially supported gateways with Chainlink for the foreseeable future, as long as there's demand. But I don't want to downplay how flexible the system is and that this doesn't all have to come from us. People can build their own gateways, whether they're trusted or trustless. and I sort of expect that to see that happen a lot with wallets and so forth, where they host their users name records and serve them up for in their own infrastructure

so they can offer entirely free subdomains and records, which I think is really cool that you could just, you could sign up for a trustless wallet on your phone. You know, you can hold the keys yourself, and you can instantly, without having to send any transactions or get any crypto to start, you can have an ENS name that allows people to identify your new wallet, which is not something that's really been doable until now, because we've had a bit of a chicken and egg problem there. Are there any wallets that currently already support this?

No, but we're working with a couple of major ones to integrate it soon. We only launched the L2 support earlier this year, so it's still work in progress, but hopefully we'll have some things to announce soon. A flip side of the medal is that everything is open, right? So basically, so I mean, your top level domain is nick.eathe, my, my, mine is ferns. And I mean, so basically, everything you do on that address is instantly attributable to you, right? Do you guys have thoughts on kind of integrating some zero knowledge services where basically I can show to certain people. that I own some assets, but not to the word.

I sort of view it as a wider problem for the ecosystem in the chain rather than NS-specific. I think rather than exacerbating it, ENS amplifies, like, how obvious it is. You know, when you look at your address on EtherScan without a name associated, you have this false sense of security that it looks obscure and how would anyone know it's mine. But it is depressingly easy to link names to people's identities. So it certainly it just makes it a lot more obvious.

We definitely support and encourage systems that use DNS to provide better anonymity and so forth. So for instance, Umbra is a it's not a mixer, it's more a way to send anonymously.

So you can send to an address to, you can send funds in a way that the recipient can claim them but without sending it directly to their address so that nobody can see exactly. who it was sent to. And they have built their system around ENS names as the way you address people's wallets and so forth. So that allows that sort of financial privacy that I think is very important.

And, yeah, I guess I like to see more systems like that spring up and with the NS support, and we really want to support that and help them out. It's definitely more of a challenge with non-fungible tokens like names, because if you could imagine a Ns name mixer. It wouldn't really work. You know, you put your name in, and a while later you pull it out somewhere else,

and it doesn't take a genius to realize that those two, that's probably the same person, you know. Yeah, that is totally true. So the other big topic for ENS currently is the governance process. So, right? So basically, so you guys did a super well-designed ENS token air drop. Thank you. Tell us about the tokenirdrop first.

How did you go about it? Sure. So we wanted to give governance power to the people who had had the biggest impact on ENS. And so part of that was simply identifying projects and people manually, but most of it was the community as a whole. And we could have done something like X tokens per year registered per domain or something like that. but I think there's a much, like the fact that somebody has registered 200 domains for a year each or for five years each or whatever doesn't make them 200 more times more useful a participant than somebody who's registered one or two.

And so what we wanted to do was try and recognise people who had been part of the ecosystem in the community for a long time. So like they joined us early and they've stuck with us or people who have a long-term commitment to the ecosystem who, who anticipate sticking around for a long time, and give those people the governance power to have a say in the future of it. And so the way we did it was we sort of split the eardrop in half, and we gave out half the tokens on the basis of how long you've owned a name for. So, you know, if you've owned it from day one, you've got the maximum amount. If you've owned it for two years, you got half the maximum amount and so on.

And then the other half we gave out in proportion to how far in the future your longest name. is registered for. And that was capped out at eight years because there's one person who's registered their name until the year 4772 or something. And if we've done it linearly, he would have just gotten all the tokens. But, you know, we felt that those two factors reflected both, you know, past commitment and future commitment. And then in addition to that, you can set a primary name for your ENS, for your Ethereum address,

which is, you know, this is the name that represents the citrus. And we doubled all of those amounts if you'd done that because we believed that represented a strong commitment to the ecosystem as well. So when people actually claim their drop, you made an interesting design decision. So you actually made people choose a delegate in the process of claiming. So I think in principle, you could bypass it if you had interacted with the smart contracts directly.

But basically, In the interface, it basically forced you to delegate your tokens to someone who had previously signed up for the job. Why did you go about it that way? I think, like, the purpose of the ENS token is to be a governance token, is to, like, meaningfully vote on the future of E&S and decide what technical improvements we should make, what, you know, how the funds should be used to advance the ecosystem. And for that, participation is really crucial. And we know from looking at other projects,

that delegation is necessary because it's simply not practical for most users to keep up to date on most things. You know, the same reason we have representative democracy instead of direct democracy, nobody can be an expert on everything. You just don't have the time. So we believed it was really important to have delegates. And we also believe that it was really important that everybody delegate as part of claiming because the whole point is to be representative and you're only doing that if you're

actually like making sure your tokens take part in this process. You could actually delegate to yourself and there was a button to do that in the UI but we made the conscious choice to sort of de-emphasize that to encourage people to think of somebody else who represents them first because, you know, we believe most people itself delegate without a real commitment will sort of wander off effectively. That wasn't the only unusual thing we did. We also had a constitution, we still have a constitution, which represents sort of core principles driving E&S and the ENS Dow. And if you claim during the first week, it presented all four clauses to you

and asked you to vote yay or nay on each of them. And the constitution was only passed if each one was voted yes by a supermajority. And after the first week, you were still shown the clauses, but the voting was over, but you were at least, you know, inducted into what it meant for E&S to be. a public good. How did delegates become delegates? And how do you think most of the people actually chose their delegate?

So there was a real temptation to do a big bang launch of like, you know, you didn't know this was coming, but now the eardrop is today. But in the end, we decided it made a lot more sense to talk about it before we did it, because amongst other things, that gave us an opportunity to put out a call for delegates and to give people an opportunity to step forward. So we did that. We announced the eardrop. We asked for people to come forward as delegates on our forum.

And each person, basically, to be considered as a delegate, you had to write a short profile of yourself, you know, why you wanted to be a delegate, how you believed you'd govern, you know, why people should delegate to you. And then you link to that profile from your ENS name using a text record because, you know, eat our own dog food, along with a profile picture and a primary name.

And then when it came to the claim app, we dynamically pulled in the list of delegates from a subgraph and from the chain directly to show everybody's E&S name, their profile picture and a link to their position statement, basically. We got far more delegates than we expected. We got over 500 submissions that actually followed through on the entire process, and far more who just started with the profile and never completed it. So, you know, initially we were thinking of a UI around like 50, you know, and like, well, that's a real challenge. How do we reasonably present as many as 50 candidates to people so that they can make an informed decision? And suddenly it was 10 times that. So we knew realistically that a lot of people wouldn't, like, they're not going to read everybody's position statement. They may not even read many or any.

So there were a few things we tried to do to combat that. One is we gave people delegate links. You could give somebody a link that would select you as the default choice if they claimed through you. And so then delegates could sort of go out and campaign for their own delegation. And it would clearly state to you, you know, this is the delegate that's been, you know, picked by the link, but you could override it. The second thing we did was we tried to get a little bit clever with how we sorted the delegates. So we didn't want to just sort things randomly because you might get a lot of people you've

never heard of and just pick somebody just to get through that step. We didn't want to sort it top down by most votes because then you end up with a very strong feedback loop of this person has the most votes, therefore at the top, therefore they get the most votes. So we tried to sort of thumb on the scales a little bit in that we shuffled it semi-randomly where the more votes you had, the more likely you were to come up to the top. But if you had more than a certain number of votes, then you would actually get downweighted. So the idea was that we wanted, you know, we decided like it would be healthy if we had sort of 20-ish really active delegates. So if you had more than 120th of the votes, you actually started getting bumped down the list and less likely to show

up. You know, and the idea was we wanted delegates who could meaningfully represent a group of people, but not be just an overwhelming voice who could over all everyone else. And nothing worked perfectly, but I think this worked reasonably well at sort of distributing the voting power and still giving people, you know, the executive choice to decide what they wanted. Yeah, absolutely. I saw it and I didn't read all the 500 statements, but I just throw it down to the first person where I thought, yeah, this guy here probably make decisions similar to the decisions I would make if I were asked personally, so I'll delegate to him.

sort of thing. So what's in it for the delegates? Not a lot, to be honest. You know, I think people may have, some of those 500 people may have put themselves forward because they sort of thought they would be richly rewarded for their participation. But, you know, mostly where it's a more or less volunteer position. You know, we have stewards inside the Dow who are also appointed by the delegates and they get compensation for the work they do. For the most part, delegates are acting volunteers. out of a desire to improve the ecosystem. And I personally am supportive of compensating them for their time because I think it's unreasonable to expect people to put a lot of effort into knowing all the ins and outs

of something in their spare time. If nothing else, it privileges people who have that time to spare and can afford to do so. But it's kind of problematic. It's very, very easy to set up a perverse incentive here where you get professional delegates whose job it is to just, you know, know things, but but not actually contribute to the governance process, you know, or that you have, you know, bot delegates who just vote on everything in order to get rewarded, you know, it's, it's a tricky situation, but I would like to, that's

something I hope the Dow evolves on as time goes by, because I think it's necessary for sustainability. So if I'm a delegate and I kind of, I made this commitment to do it, but then kind of my life circumstances change. So I can no longer afford to afford the time or it just doesn't make sense for me. How do I step down on what happens to the people who delegate it to me? This is a this is kind of a big problem with the compound based governance model that we adopted and that it doesn't have a great way to do that. If you thought ahead and your governance account, your delegate account was a multi-sig or something, you could hand the multi-sig off to your successor. But if it's an EOA, if it's an external account, there's no way to like

re-delegate en masse to someone else. You simply have to publicise to your delegates that you're no longer acting actively and then wait for them to reassign. But of course we have the whole inactivity issue. And so a lot of those people may not do that. And so you may be, you know, you could step down and you could say, I'm just going to vote how X votes. as time goes on, but then you've still got at least the commitment to be there and present for those votes. So that is definitely something that, you know, more work is needed on in future. We need better governance systems that can handle this sort of succession problem. Yeah.

I mean, this is, yeah, totally true. It's one of the, so governance is still so early, right? Very much so, yeah. So tell us about the kinds of decisions that, the delegates have made so far? Sure. So we, the very first decision besides ratifying the constitution was to formally petition the multi-sig, which, you know, previously controlled all of the, all of the funds

and all of the important levers to hand them over to the Dow. So that was a purely social vote. There was no like execution on chain by the Dow, but it was a, you know, basically a formal letter saying, hey, hand it over, it's time to decentralise. And that, of course, passed with almost unanimous consent. Since then, I'm glancing through the list myself to remind me, the second proposal was there were a few people who got smaller air drops than they should have because of basically an error on my part in calculating whether they had a primary name set or not.

And the community was motivated to give them what they. missed out on, which I thought was actually a really good litmus test of how the community is going to act around this sort of thing, because the selfish impulse might have been to keep it for the Dow. Then there was creating working groups and sort of getting the whole Dow started, and that's been very successful so far. We now have a system for sort of getting work done individually beyond like polling everybody in the entire Dow for every decision, which just isn't practical. and there has been a bunch of stuff around the price premium. This is sort of the first on-chain governance activities that the Dow has had to do.

When a name expires, it goes to a Dutch auction. So it starts at a high price and diminishes over was originally 28 days. Basically, you ensure one person can't snap up the name the moment it becomes available. Originally that was set at like the 95th percentile of all the short name auction values, which was $2,000, which seemed like lots at the time. But around the time at the Dow launch, it became really apparent that this was nowhere near enough. So we were seeing gas auctions going on. We were seeing MEV and stuff to snap up names as soon as they became available.

So the first thing the Dow voted to do was to replace that with a new version that started at $100,000, which seemed more than enough. that had two problems. One is occasionally $100,000, believe it or not, isn't enough, and people are willing to pay more than that for a name that just expired. The second is that even over 28 days, if you're going from $100,000 to zero, the last day or so covers like the entire $2,000 range in a bit, which means that if you're willing to pay $100 for the name,

you have like a 30-minute window in which you have to be at your computer in order to do this. So one of the most recent things the Dow did was to agree to replace it with a new version that's exponential. So now it starts at the completely absurd price of $100 million, not in the expectation that anyone values the name at that, but the expectation that that's too much. You know, we have to start at a price that's higher than anyone will pay. And then it halves every day for three weeks, by which point it gets down to six bucks or something. And that's so far been really successful. And then the most recent thing the Dow voted was to end the eardrops because the initial planned period for the eardrop was six months and that's now we've just passed that mark. Super interesting. So the Dow also has some treasury, right, from the fees from the registrations. So how does it spend that money?

I mean, so far not a lot. So, you know, we recently, with the recent popularity of numbered names and other sort of of ENS social clubs, the income has been really substantial. The sort of two main ways it's intended to spend it, well, three I guess. One is funding the ENS ecosystem directly. And so that includes, you know, funding projects directly associated with the ENS, such as true names, the company I run that does ENS development, and other efforts such as sign in with Ethereum through spruce and so on and so forth, and, you know, just sort of wider

ecosystem projects. And the other is, so it is two, the other is public goods more generally. So, you know, things outside E&S, but still within Ethereum or even sort of, you know, wider space public goods. And so so far, the Dow has funded the sign with Ethereum. server to the tune of 250K. It's requested budgets for the individual working groups, which they've used to do things like pay for Stewards' time and put through proposals for other work to do. And it's funded a couple of bug bounties for some small to moderate bugs that were found in ENS. It hasn't really processed any really large-scale grants yet, but I kind of expect that to change in the near future, especially given the returned funds, you know, the unclaimed AirDrop Funds,

that were returned to the Dow. I think it's really, there's a lot of legitimacy there to spend some of that on, on helping E&S community efforts and even, you know, wider public goods. So ENS is very much, it posits itself as a public goods project, right? So basically it's not for profit. But if you look at ENS tokens, I mean, you can buy them for money, right? I mean, it's a governance token. But, I mean, if you look at the past couple of years in this ecosystem,

I mean, there have been a lot of governance tokens, and somehow they give you an implied ownership of the project. And often there's an expectation of profit. So kind of how do you reconcile the implied valuation of D&S Dow at many hundreds of millions of dollars with, you know, it's very much, it's publicly stated nonprofit nature? I mean, I guess we've been, you know, we were always aware that people would want to trade them, you know, no matter what you do, you know, somebody is going to want to swap it for something else. But our emphasis has always been that these are governance tokens. And so we've been really clear about a few things. We, you know, it is intended to be a public good. And it's actually even stated in the ANS's constitution that it's not legitimate to pay out profits to token holders.

You know, that is explicitly not the indefinitely not the independent. intention of the funds. It's to be used for improving the ecosystem and so forth. So, you know, we've done our best to disabuse anyone of the notion that owning tokens is a route to dividends or profits or whatnot. That's just not what it's for. And, you know, in addition to that, like true names and the Dow haven't taken part in any, you know, offering liquidity or listing on exchanges or anything like that. All of that's been purely organic. But it is, You know, it is inevitable people will want to swap it. And even purely as a governance token, it's clear that it should have some value because,

you know, if you are a project seeking a grant from the Dow, then you have a financial interest in getting that grant and therefore, you know, the tokens would have some value to you. And it's healthy for the Dow if it's not trivial for somebody to buy enough tokens to grant themselves all the funds inside the Dow. but financial motivations for the tokens to have value are very much bottom of the list. And I think I've also really tried to establish a norm that the Dow has a lot of tokens itself. In fact, it has over 50% of the token supply. And personally, I've really tried to set a norm that those aren't used as monetary payment,

but they're used as recognition for work and proving ENS. So if somebody like sign-in with Ethereum runs a server, then their costs and so forth ought to be paid for in Ether or USD. And further, they can be given some tokens as a sign of sort of like the responsibility they've taken on and the fact that they should then have a voice in the future of the Tao. Yeah, no, that makes a lot of sense. So basically, I think it's kind of an area that we as an ecosystem kind of have to learn to navigate better. I mean, obviously,

direct democracy doesn't really work because there's no way to be, to be knowledgeable about anything that kind of needs, about everything that needs to be decided. But on the other hand, how professional do you want your politicians to become, right? So basically, do you want them to kind of go out and campaign and make campaign promises and say, if this happens, I promise to give you guys whatever?

So basically, how do you see the future of that? I mean, so basically in five years, how do you think, I mean, from aside, I mean, the technical implications and everything aside, how do you see this working? I guess I would rather a future where we have protocol politicians who go out and campaign for votes than one where the powerful people who want something done simply go out and buy those votes. and use them to enact their will. But I hope that we can build, like, I think it comes as much down to social norms as it does to technical measures. And that's why I wanted a constitution as a founding document and not just some sort of unwritten rules.

I hope that we can use that foundation to establish a sort of governance norms where those, where the sort of more mercenary end of things or the more politically end of things is rejected in favour of technical collaboration and sort of, you know, generally all pushing in the same direction. And I know that sounds kind of techno-utopian. But I do believe that we can build stable, sort of, if not democratic, at least accountable systems that do have that sort of longevity of vision. And the way you do it is, you know, starting on the right route and explicitly stating your goals in a way that anyone who comes along later understands that to be so, so that you don't drift off course effectively.

Okay, so basically culture over technology. Yeah. Yeah. Okay. So, I mean, basically, if you look at the Ethereum ecosystem over the last couple of years, there's been a very market shift in kind of the mind space of the ecosystem, right? What do you think are the major challenges facing us right now? I think, like, increasingly, I think backlash.

from people outside crypto is a bigger and bigger issue. And it's one that I sort of, you know, had worried about a bit even back when I joined, but never anticipated it would reach the sort of volume that it has today. And it's frustrating because there are legitimate issues with the wider crypto ecosystem, you know, both around legitimate concerns around sustainability because of proof of work currencies and also legitimate concerns around the sort of scams and schemes that a completely unregulated ecosystem attracts. But those get, you know, that seed of reasonableness gets sort of exploited for hyperbole. And it's kind of depressing to see people I otherwise like and respect throwing out the baby with the bathwater and saying the whole thing is rotten to its core and awful and so on because they don't like this particular problem.

du jour. I think reaching out to those people and convincing them that we are trying to build something valuable here, something useful to people, something that isn't just to get rich quick scheme or a platform for scammers or whatnot is going to be one of the biggest challenges in making sure that

crypto has real longevity. And that also includes things like Ethereum transitioning to proof of state to demonstrate that, yes, it is actually possible to move to a secure system that doesn't rely on proof of work and therefore has you know, doesn't have significant environmental sustainability issues.

Yeah, I think the switch to the proof of stake, I mean, this is in terms of narrative, it's so important. And in terms of technology, it's also so important. But I think basically the narrative, to me, currently seems even more important. There's a very distinct culture of money and mercenary dorm. that kind of has invaded the ecosystem somewhat. So basically five years ago when you were last on, I mean, this was during the first ICO craze.

So I mean, I'm not going to say that money wasn't an issue back then. But at least in my perception, the nature of people who come in and the reasons they come in for has changed substantially. and it's not always the best people. Do you think it's a threat? I think it's a significant issue, yeah, and I think it's self-reinforcing in the sense that as long as Crypto's image is as the way it is,

it will attract more people who see that as attractive, and then that will make it more true, you know, over time. And, you know, like I was talking about with how I want ENS to proceed forward, the same sort of inertia applies here, that it gets more and more difficult to change your course. And, you know, I have this sort of axiom myself that anything you don't come to agreement on ahead of time, you know, anything you don't set down as a principle, if you try it, it will be just effectively impossible to set later because you'll find people on every side of the argument if you try and do it because you'll attract to your community people who have every possible view on it. And that can make this sort of shift extremely difficult. Like it's the reason that I think transitioning to proof of stake is actually going to be relatively unconcable. because it was set right from day one that this would be the thing that would happen. So most people have joined the community, have joined that accepting this.

But, you know, it's much more difficult to set that sort of norm, and it hasn't been set around things like, you know, sort of self-serving attitudes to money and to the ecosystem and, you know, sort of desire to get rich quick and ignore the community and not build something useful for everyone. And to be honest, yeah, I do see it as a problem. I don't see an easy solution to it except, you know, continuing to make ourselves heard, which feels futile at times. Yeah, no, I mean, E&S is definitely, I mean, I think it can be said uncontentiously that it's a force for good.

And basically that it, I mean, you guys are seen as unserved serving. So I think you're in a good position to kind of set this moral compass. when you think about, when you zoom out and think about Ethereum and the future of Ethereum with respect to other blockchain ecosystem. So basically ecosystems that have been there a long time, so basically cosmos and Parker Dodd and so on. And then basically the self-proclaimed Ethereum challenges, Solana, Avalanche, Phantom and so on. How do you see those working together? I mean, I guess, you know, some degree of, you know, collaboration.

is inevitable and useful, and we have message bridges and we have token bridges and so forth that facilitate all of that. I do kind of think that if Ethereum delivers on its goal to, you know, to support scalability via layer 2s and so forth, that there is less appetite and interest for competing L1s, and I think competing L1s are aware of that too. And I'm not an Ethereum maximalist in that I think Ethereum has a lot to learn from innovations on other chains. and I also think that there's nothing that means that Ethereum has to be the winner, except that it's been around for a long time, it's very mature, and it has people working on it who are adaptable to change,

and in fact the ecosystem itself is adaptable to change. It could be some other chain, but I do think that in the long run, one chain will come to dominate as sort of the L1, because you have those strong network factors around both just interchangeability but also around security. And yeah, I guess that's my overall perspective. I think a lot of the chains are trying to distinguish themselves on things that, you know, effectively, they're not actually making an innovation, they're just picking a different point on the trade-off curve between centralisation and scalability, you know, or decentralisation and scalability.

You know, they're saying we can run 10 times as fast, but our nodes require 10 times as many resources. You haven't actually scaled it. You've just picked a different spot. And I'm not saying Ethereum necessarily has picked the perfect spot. But I think if it's all the way over on that end where you need a whole data center to run a node, that's not a future I'd want to see for the cryptocurrencies and blockchains, because I don't feel. it's meaningfully improved over just running closed systems, to be honest. Kind of focusing back on ENS. So we've already talked about your layer two strategies and kind of making it cheaper for people to interact with ENS domains again.

What else is on the roadmap for you guys? So we've got a big suite of contract updates that are due out very soon now. which will add new capabilities. So the primary one is called the name wrapper, and the idea is that will add new functionality to every name. It'll mean that names at all levels will become NFTs, not just. Dot-Eath second-level names. It also makes it easier for people to issue subdomains trustlessly.

So I could give you, you know, nick. You know, the wallet.eath or, you know, whatever name you would like, and you could be sure that no... that I couldn't take it back or reassign it or whatnot. And that makes it a lot more practical for people to use subdomains as a real-life tool. It also, you know, we're rolling in a suite of other upgrades to the registrar and to the reverse registrar and various other bits of functionality that allow doing a lot more in one transaction, which also reduces the gas fees there.

So you'll be able to register a name, you'll be able to set it up, and you'll be able to to set your primary name all in just a single transaction, which improves the ux and also reduces the gas fees there. And then the other thing, big thing we're working on is a complete redesigned in the manager, you know, our main app. And you can see a preview of that at preview. com.com. We're working on, you know, really soon getting out a feature parity version that will replace the current version, but with much, much better UX than the current one. And then from there, we obviously want to add a lot more functionality that we previously haven't had. And then I guess finally, we've got integrations for this L2 support coming from some major

wallet providers. Nice. It sounds like you have quite a roadmap there. Do you guys plan on building a notification service that that's, you know, that your name is about to expire? Because I accidentally let Epicenter.eathlapse and I had to buy it back. It was really expensive. Oh, wow.

Yeah. that's not great. Yeah, it's been an ongoing problem. And we've got, you know, in the app now, you can click to set a calendar reminder, which has probably been the most reliable one so far, because it relies on services people already use. And you can set to, you can click to set an email reminder via a third-party service. The problem with that is, you know, your domain expires in 10 years. How sure are we that that service will still be around in 10 years? It's an area where, like, we definitely want to improve, but we kind of view building our own notification service as like a last resort, because it's something that should be a useful tool for much more than just us,

and I'd love to see it built as a reliable decentralized service rather than us having to build it ourselves, but we will if we have to. Okay, so basically, if someone were to go to the ENS DAO and say, look, I need a grant to build this. This is 100%. Please do. So where do people go to find out more about E&SDAW? or maybe even participate in governance. Yeah, so ENS dot domains is the best place for just learning about ENS in general.

And if you add slash governance to the end, it will give you a landing page that will take you to, you know, learning about governance, learning how to delegate and claim your tokens, and participating in governance by joining our Discord chat and also our forum. Perfect. Thank you, Nick. As always, it's been a pleasure to have you on. and I hope we have you back on in fewer than five years. Me too.

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