Original author: Hao Tian, View on the Chain
The wind suddenly picked up and wrinkled the spring water in the NFT market. No bragging, the next thread, based on my in-depth observation of the @ensdomain digital domain name market in the past few days, combined with the objective reaction of the on-chain data on @duneanalytics, I will talk about this wave of ENS domain name NFT community The remarkable points of the hype and some hidden worries:
This is a typical NFT community action flash show. In just one week, not only the 3- and 4-digit domain names were successfully popularized, but the floor prices reached 10ETH and 2ETH respectively, and @ens.eth officially created Record revenue for several consecutive days, only two days from 5.1 to 5.2 created a revenue of nearly 3 million US dollars, approaching the level of the whole month of March. In addition, it also stimulated a wave of doubling of $ENS. The actual economic benefits are very successful!
There are three main reasons why it is hot:
1) Digital domain names are absolutely scarce resources of the ENS system and are easy to NFT. As a portal-level strategic entry to web3, ENS’ original practical-oriented domain name value discovery is too slow, and once the 3- or 4-digit domain name is locked, there are only 11,000 in total, and the digital domain name is short and easy to remember, which can give the holder a kind of social interaction. Cultural labels, like avater NFTs, can quickly gain momentum;
2) In the NFT world, the power of the community is terrifying, and it can build tall buildings against the trend. The wave of digital domain name hype was initiated by @10kclub. There are many BAYC bosses in the community, and they have received responses from hundreds of thousands of fans on Twitter. The most important thing is that there are big capital and chaebols. The consensus is strong, and it is easy to set off an upsurge in a short period of time;
3) Unlike other NFTs, the quantity is locked. If you miss the best time to enter the market, you can either take the order at a high position or you can only wait and see. ENS digital domain names have great scalability. If you miss 3 digits, there are still 4 digits. If you miss it, there are still 5 digits, and it can also be extended to 3 or 4 digits. This kind of gameplay can maximize the emotional follow-up participation of fomo, so it will continue to receive attention.
However, through observation of some on-chain data, it is found that there are actually hidden secrets behind this wave of digital domain name hype:
1) The head holder controls more than 30% of the scarce domain name resources: for example, through on-chain data tracing, it is found that the 3-digit domain name holds the number one address starting with 0xed02912 and the 4-digit domain name starts with the number one address starting with 0x270e962 The address is owned by the same chaebol, and some of the top holders are already shipping profitably;
2) Although the digital domain name is a scarce resource of the ENS system, it lacks official endorsement: this makes it difficult for the community consensus to be twisted into one rope, from 3 or 4 digits to 5 digits and then spread to three or four letters. Obviously this deviates from With the original intention of the 10k club, I went to the 100k club. If the community cannot reach an absolute consensus on digital domain names, it will undoubtedly dilute the scarcity attributes of digital domain names, which will ultimately be detrimental to the establishment of NFT cultural attributes;
3) Hoarding short domain names requires a higher annual renewal fee. Taking a 3-digit domain name as an example, a renewal fee of 0.2 ETH is required per year, which makes investing in ENS domain names only short-term speculation. The longer it takes too long, the more likely it is to sell. This means that ENS domain name NFT has a strong demand for transaction depth, and this is precisely the weakness of the lack of liquidity in the NFT market;
4) What we hype about NFT is actually not numbers or JPG, but the expected development value of the cultural parent company behind it, just like investing in BAYC a year ago, and owning yuga labs APE airdrop, land airdrop, etc. a year later and other cultural added value. However, what is the expected value of investing in the Ethereum public chain digital short domain name now? The airdrop has already been sent, even if there is any more, it is impossible to favor the digital domain name market;
5) The domain name is a better NFT cultural target, but it is different from the traditional .com website domain name. The website domain name is just needed for brand owners, but the current blockchain market is still a market that only focuses on the back end, and few Some brand owners consider optimizing the front-end experience of users, so the current demand for brand domain names is also very weak. Therefore, we cannot fully invest in products in the web3 era from the perspective of the Web2 era;
6) At present, domain names cannot meet the needs of cross-chain scenarios. From ENS to TNS and then to unstoppable, domain name suffixes also include .eth, .ust, .bit.crypto, .coin, etc. As an entry-level product of web3, the domain name The cross-chain demand is naturally the first to bear the brunt. Which suffix will eventually become a phenomenon-level product at the .com level is not yet conclusive;
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