Vitalik Buterin co-founder of Ethereum wrote an in depth piece on whether the pricing for ENS domain names should be changed. He titled the piece, “Should there be demand-based recurring fees on ENS domains?”
He starts out by saying the price is very cheap, at just $5 to renew a domain name.
From the article:
The question worth asking is: is this really the best way to allocate domains? By selling off these domains so cheaply, ENS DAO is almost certainly gathering far less revenue than it could, which limits its ability to act to improve the ecosystem. The status quo is also bad for fairness: being able to buy up all the domains cheaply was great for people in 2017, is okay in 2022, but the consequences may severely handicap the system in 2050. And given that buying a five-letter-word domain in practice costs anywhere from 0.1 to 500 ETH, the notionally cheap registration prices are not actually providing cost savings to users. In fact, there are deep economic reasons to believe that reliance on secondary markets makes domains more expensive than a well-designed in-protocol mechanism.
Could we allocate ongoing ownership of domains in a better way? Is there a way to raise more revenue for ENS DAO, do a better job of ensuring domains go to those who can make best use of them, and at the same time preserve the credible neutrality and the accessible very strong guarantees of long-term ownership that make ENS valuable?
He goes on to pose different alternatives and also goes back and forth on the potential problems these new alternative might expose.
Alternative solution 1: demand-based recurring pricing
Alternative solution 2: capped demand-based recurring pricing
It’s a very detailed thought piece. He seems to be looking at things from all angles. Investor rights, to the ENS Dao, to the most efficient way to run a domain extension.
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