Analyzing ENS: Becoming an Identity for Digital Resources
May 9th, 2022

Key Takeaways

  • The ENS market cap rose 114% in a week, and its trading volume over the past two weeks is greater than all previous transactions combined. Over 389,000 unique addresses hold one million domains, averaging out to about three per address.
  • On April 26th, a domain name was sold for an exorbitant price, which triggered a war of numeric domains and the third wave of ENS hype. Popular ENS domain names share similar characteristics such as being three- or four-digit, special numbers, sequential, etc.
  • The prices of ENS domain names of famous trademarks and IPs will gradually match their actual values. There's plenty of room for Web3 domain names to grow in the future.
  • In addition to the hype factor, ENS domains still offer the values of NFT and new approaches to DAO.

The Ethereum Name Service (ENS) is a domain name management system of Ethereum which started at the Ethereum Foundation in early 2017. It provides users with ENS domain names in the format of "XXX.eth". On the fifth anniversary of its establishment, this project saw a new wave of ENS registration in the market.

Market fever

With the number of ENS registrations increasing dramatically over the past week, the ENS domain market fever has also skyrocketed. This week, the market value of ENS reached a new high of $47,677,198, a 114% increase compared to the market value on April 24. At the same time, ENS trading volume started an upward trend on April 26, which continued until May 2 when it hit a new high of $8,668,314 in a single day. From there, signs of decline were observed. Nevertheless, the trading volume of ENS domains in the past two weeks has far exceeded the combined trading volume of all previous transactions.

Chart for the trading volume of ENS.
Chart for the trading volume of ENS.

When comparing ENS with the overall market, it is clear that ENS did not follow the bearish trend of the market, and doesn't seem to do so in the foreseeable future. Instead, ENS has established its unique pace.

Market cap (in red) and volume (in blue).
Market cap (in red) and volume (in blue).

According to the figure above, April 26 to May 3 was the period trading volume boomed. Focusing on data obtained from this period, we will further analyze the drivers behind this boom.

The war of numeric domains

Transaction records show that before April 25, NFT transactions of ENS domains have been rather sporadic, and the domain types involved are largely personal names and meaningful words such as lazybum.eth, pick-up.eth, etc. Even three-digit domain names such as 095.eth were sold for only 0.6E—not a high price at all.

ENS domain name prices at different times.
ENS domain name prices at different times.

On April 26, a domain name 914.eth sold for 2 ETH, which marked the beginning of the ENS trading volume explosion. Four-digit names including 0115.eth (0.115 ETH), 0589.eth (0.16 ETH), 7304.eth (0.199 ETH), and 9283.eth (0.2 ETH) rose in transactions much more frequently and further drove up the prices. Then again, April 27 to April 30 saw another two transactions closed with exorbitant prices: 9559.eth (0.99 ETH) and 2049.eth (1 ETH).

We may consider May 1 as the dividing line, after which the floor price of four-digit domains fluctuated around 1 ETH, gradually reaching the "1 ETH consensus". The most expensive ENS domain 6000.eth was sold for 6 ETH. In the meantime, three-digit names soared to 10 ETH.

Floor prices of three- and four-digit domain names.
Floor prices of three- and four-digit domain names.

However, this war of numeric domains is far from being over. As shown by the three arrows in the figure below, apart from the upward trend of three- and four-digit names, a third trend is observed.

This trend encompasses multiple categories, which are:

  1. Registrations for five-digit names (19367.eth)
  2. Registrations for popular IPs or web addresses (mfer.eth, 58x.eth)
  3. Registrations using acronyms of personal names (zpg.eth)
    These categories indicate that while there is still a tendency to grab five-digit domain names, people's focuses are shifting toward personal use instead of going after the hype. According to, there are currently 2.21 million unique wallet addresses on the market, yet the number of ENS domain registrations has just passed 1 million this month. Judging from media popularity, the overhype of ENS has once again broken through old boundaries and made people realize the importance of owning a personal Web3 domain name, which also explains why more people are choosing to trade on practical ENS domain names.

Rarity classification of domain names

As of the time of writing, three-digit ENS domains often sell for more than 15 ETH. Meanwhile, four-digit domains typically sell for more than 1.5 ETH, which is equivalent to about $4,000 based on the current price of Ether. We have listed the prices of numeric domain names from April 25 to May 3 and divided them into three ranges.

Stratification of numeric domain names.
Stratification of numeric domain names.

We found that four-digit domain names are the most common in the 2-3 ETH range, and three-digit domain names take up the majority of the 3-10 ETH range. Stratification of ENS prices is observed. The shorter the domain name, the more expensive it is.

Secondly, special numbers such as "6", "8", "0", and whole number names such as 00X.eth and X00.eth are relatively expensive. For example, 6000.eth meets both of these criteria, hence it was sold for the price of a three-digit name despite having four digits.

Finally, sequential domains are also much pricier. For instance, 987.eth and 3456.eth are both top-priced domain names. Besides, alphabetic sequences like abc.eth were sold on May 3 for 90 ETH (about $250,000). This transaction is the second-highest ever recorded in ENS history.


An interesting fact is that some users take a part of the domain name as the selling price. For example, 0115.eth was sold for 0.115 ETH and 555.eth was sold for 55.5 ETH. There are also domains that take stock symbols as names. Needless to say, it will definitely have an impact on the final price.


Liquidity and supply and demand

Apart from rarity, liquidity is also a key indicator in numeric domain names. The fact that three-digit domain names are priced higher than four-digit and alphabetical domain names reflects, to some extent, the supply and demand. Frankly speaking, numbers are much more universal than the English alphabet. And the real world has also proved to us that people are willing to pay for rarity: whether it is in license plates or any other things, people would go for special numbers like 8888 and 001.

Matching to true values

paradigm.eth was the first priciest domain name ever sold. The domain was named after a well-known crypto venture capital firm and was sold for 420 ETH. In a similar sense, domains with web addresses of companies or famous IPs, like amazon.eth, nba.eth, pornhub.eth, are generally more expensive. However, these prices were not the results of critical evaluations. It is believed that the prices of these domain names will slowly but eventually match their actual values.

Some examples of expensive ENS domain names.
Some examples of expensive ENS domain names.

If you look at the number of wallets of Web3 users and the actual number of ENS registrations, a rough calculation (offsetting the factors of "one person with multiple wallets" and "one person with multiple ENS domains") shows that the current ENS domain names remain insufficient to accommodate everyone. Also, with new users rushing in, the demand will only increase. Thus, ENS domain names possess great room for value growth in the long run.

The underlying reason and value

In essence, ENS domain names are designed to resolve the need for address names among Web3 users. Therefore, memorable and special domain names deserve to have a higher value. This dynamic is similar to the early days of the web, where easy-to-remember and catchy domains such as have been sold for $345 million. If Ethereum is the world computer, ENS is its modern and decentralized DNS.

Identity is one of the most important attributes of the NFT world, and many BAYC holders believe that it is necessary to have domains that are consistent with their BAYC numbers. These whales who own blue-chip NFTs snatched ENS domains, thus causing a disruption on-chain and triggering FOMO.

Aside from the hype, where does the actual value of ENS lie?

First of all, we must, of course, mention the strong support ENS has from Ethereum and the Ethereum Foundation. If a person possesses an ENS domain name, he or she will be spared from memorizing the long address and thus obtaining a better experience in Web3. What's more, ENS domains are royalty-free and completely decentralized. Secondly, the empowerment of NFT. ENS domain names not only have the function of proving one's identity, it is also customizable. For instance, one may view "eth" as the family name and the prefix as the first name, people may even create and trade their own names. This gives ENS domain names the attributes of NFT such as creation and trading.

Third, application scenarios. This includes web hosting, decentralized websites, subdomains, DNS solutions, etc. Moreover, platforms such as Unstoppableweb also provide names with Web3 identifiers such as ".nft".

Last but not least, embrace the community. People who share similar attributes form a community DAO. Take 10k Club, for example, all members of the club possess at least one three- or four-digit domain name. On top of that, many are KOLs and own a handful of blue-chip NFTs as well. They have found a sense of belonging in ENS domain names and have come together to build a community of their own.

Official Twitter page of 10k Club.
Official Twitter page of 10k Club.

The bear and the bull case for ENS

The Bull Case

The number of active Ethereum addresses has been growing rapidly. According to GlassNode, over 8M addresses have been actively participating in the Ethereum network just in the past 30 days. As blockchain adoption increases, products that provide a familiar and easy-to-use interface like ENS will have a surge in demand. Not only is ENS a decentralized public good, but it is also key to providing a better user experience for mainstream users. NFTs were able to attract a large community of folks who would not use cryptocurrency otherwise. This community would much prefer typing a simple .eth name in their transactions than copying and pasting a 40-character hexadecimal number.

The Bear Case

Hype and FOMO are short-term stimulators in the NFT market. These short-lasting cycles of mania tend to force individuals to act irrationally and lose money. One of the biggest losses in the NFT market would be the Jack Dorsey Twitt that sold for millions and it's now worthless. This example is an extreme case and does not match ENS's underlying value one to one at all. However, it can provide perspective for retail investors as to the possibilities of buying into the hype when you're in the middle of it. We should treat such manias sensibly and take them as opportunities to probe deeper— people are now diverting their attention towards "uniqueness" in the Web3 world.

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