ENS sees the day: project and transaction data analysis
Original title: "ENS Clearing the Clouds——Project and Transaction Data Analysis"
Original Author: Tiga, W3.Hitchhiker; Revised: Evelyn, W3.Hitchhiker
Basic situation of ENS project
Business basics
Ethereum Name Service (ENS) was launched on Ethereum in May 2017. The service provided by ENS is to map user-defined domain names with the suffix .eth to user addresses. For example, when a user needs to transfer money, they only need to enter vitalik.eth to transfer money without entering complicated wallet addresses. When using a wallet such as Little Fox to connect to a website, the user's ENS domain name will also be displayed directly on the front end. Each ENS address is an ERC721 NFT, which can be traded on NFT trading markets such as Opensea.
ENS's domain name service is charged according to the character length of the domain name.
5 character domain name: $5 per year;
4 character domain name: $160 per year;
3 character domain name: $640 per year;
Business data performance
The current total number of registered domain names under the ENS protocol has reached 112w. At present, 500+ wallets or protocols have been integrated, and the number of users exceeds 40w.
Among the historical total revenue of all projects, the historical revenue of ENS is about 56.7m, ranking 15th among all projects, with strong profitability. Different from other protocols, the ENS protocol only generates income when the user makes an initial purchase or renewal. For nearly 90% of players, they have a 90% probability that their annual consumption in ENS is $5.
Since ENS announced the airdrop, the revenue data of ENS has shown explosive growth, and the revenue of ENS has increased by more than eight times in the past year. The revenue has exceeded 180w for 11 consecutive months.
From business composition See, new domain name registration fees are the main source of ENS' revenue, and new domain name registration revenue is more than 10 times the renewal fee revenue. At present, most of the income of ENS is incremental income.
The registration volume of ENS has gone through two periods of explosion (as indicated by the yellow circle in the figure above Shown):
The first explosive period ENS announced the airdrop, and a large number of users entered the field at zero hour to "mix" the airdrop
The second explosive period It's the wave of ENS domain name hype starting in April 2022.
With the influx of trying users, especially domain speculators who purchase ENS domain names on a monthly basis, the average registration time of ENS has also been continuously diluted. The registration period is 1.64 years.
Team, investment, partner strength
ENS was founded in 2016 by Nick Johnson, a former software engineer at Google. At first, ENS was a sideline project authorized by the ETH Foundation, and then the ENS team was established with the support of the ETH Foundation. There are currently 16 team members. Team members CEO 1, CTO 1, "customer service" 1, community 1, consultant 1, technology 7.
ENS has not made any investment since its establishment. Only got donations from ETH foundation, biance_x etc.
Partner
Currently, there are 500+ projects integrating the ENS protocol, and almost all well-known projects have integrated the ENS protocol. And integrating the ENS protocol is becoming a standard.
Among them, there is a sign of an important partner that cannot be ignored, that is, every user who changes the twitter username to a .eth suffix. These include crypto twitter big V, ordinary retail investors, VCs, project parties, and even traditional brands such as PUMA.
The screen name with the .eth suffix comes with a web3 identity label, allowing various users to "emphasize" their own web3 attributes invisibly. And every user with a .eth domain name suffix is a living signboard of ENS.
ENS business data
Valuation rising driving force
If the valuation of ENS shows explosive growth in the future, what factors will drive it?
- Income side (business): ENS domain name sales continue to skyrocket
- Function side (imagination space): ENS domain name in the future Play an important role in web3
The revenue of ENS business can be divided into two parts: stock and incremental:
- Stock income refers to the income brought by users renewing the domain name they hold
- Incremental income refers to the income brought by users who purchase new domain names
At present, the ENS protocol has entered a period of rapid expansion, and the number of new ENS domain name registrations continues to grow.
From the most recent According to the revenue component data of the year and a half, the renewal revenue of old users has increased steadily, accounting for about 10% of the total revenue.
ENS domain names are currently more of an identity label. The account function actually represented by ENS has not been fully explored yet. Not everyone needs a domain name in the web2 era, but in the web3 era, a wallet address is essential to enter web3, and ENS will have a vast market in the future. With the gradual improvement of the web3 infrastructure and the prosperity of the ecology in the future, ENS will become an important part of DID. ENS will have a lot of room for imagination in the future web3 world.
Competitor
ENS, as the only .eth domain name seller in ETH ecology, has an exclusive franchise monopoly. As a domain name provider, there are no competitors on ETH, and it will be difficult to have competitors in the future. At present, the ENS brand has been deeply rooted in the hearts of the people, and it is used as the default standard configuration of the project. Due to the brand advantage, ecological advantage, and especially the first-mover advantage that ENS currently has, it will be difficult for competitors to compete with it in the future.
Token Model Analysis
ENSToken will be issued for the first time on November 9, 2021, with a total of 100 million Tokens. Token allocation is as follows:
5kw (50%) treasury [unlocked in 4 years]
10% DAO will be released
2.5kw (25%) airdropped to users (>137k accounts) [release immediately]
Only 1.96kw (78.5%) was claimed.
2.5kw (25%) airdropped to ENS contributors (100 individuals and groups, plus hundreds of Discord users). [Unlocked in 4 years]
18.96% Core Development (11 people)
0.58% Lauch Advisors (2 people)
< p>1.25% Future Contributors1.29% Extemal Contributors(17 people)
0.05% Translators(13 people)
2.5% Select Integrations(54 people)
0.25% Keyholders (10 people)
0.125% Active Discord Users (> 400 people)
Years The inflation rate is up to 2%, and the specific amount is determined by the DAO.
Overall, ENS airdrops 50% of the total Token to ENS users and contributors very web3, although the total amount of airdrops to ENS contributors 25% of the tokens have a 4-year unlocking period, but such a huge amount of airdrops is bound to cause a lot of selling pressure on ENSToken in the future.
Token basic information (data sampling time June 29, 2022):
Circulation Supply: 20,244,862.09 ENS (20%)
Maximum Supply: 100,000,000
Total Supply: 100,000,000
Market Cap: $176,105,477
FDV: $870,415,465
Rank: 135
Coin Release Date: November 9, 2021
Historical Highest Price: $85.69 (November 11, 2021) , the highest price of BTC in history is November 10, 2021.
ENSToken was issued on November 9, 2021. At that time, the market was very good, and BTC reached its all-time high of 6.9 on November 10, 2021 w. Then ENS followed the market all the way down. It is currently fluctuating around $9.
Risks to ENS
The development of ETH determines the development of ENS. Therefore, the important risk that ENS faces in the future is also the risk that ETH may fall behind in the future public chain competition. However, according to the current ecological development of capital, technology, and users, it is more likely that ETH will maintain a strong competitiveness in the future.
From last year to this year, a large number of hype and early adopters poured into ENS. Income figures may face sharp downward pressure in the short to medium term.
For ENSToken, the ENS project party has not empowered $ENS. And in the next 3.5 years, 25% of the total Token will be unlocked, and ENSToken will be under considerable selling pressure.
ENS domain name NFT is still in the midst of hype, and the price of domain names may fluctuate greatly in the short term. The current high-priced domain name may be faced with a sharp drop in price in the future.
ENS Valuation Evaluation
The function of ENS itself is to perfect ETH, take advantage of the first-mover advantage, and gradually establish the network effect of the domain name field on ETH when ETH is fledgling. And obtained official endorsement and support, and finally obtained the exclusive franchise monopoly of the ETH ecological .eth domain name. Due to its relatively simple business, ENS has less pressure on subsequent innovation and development after the core function development is completed in the early stage. ETH will likely continue to be the leader in the future L1 competition, and ENS can almost get a large piece of cake from the ETH development dividend in a lying posture.
As crypto further expands the market in the future, web3 will move from concept to application popularization step by step. Blockchain-based web3 will inevitably stimulate the demand for readable domain names. The sales of ENS will also continue to grow predictably with the development of the industry. In contrast to the predictable growth of sales revenue, ENS domain names have no cost, and are essentially a business with zero marginal effect.
At present, the user base of ENS is still relatively small, and the number of ENS users is only 46w. According to the current ENS domain name sales rules, when a large number of new users flood into web3 in the future, users will find that domain names with 3 and 4 characters are already sold out, and they can only buy "second-hand" domain names from the NFT market, or register domain names with 5 characters or more . At present, the proportion of domain names with 5 characters and above is about 91%, and the influx of new users in the future will cause this proportion to continue to increase. In this way, when the number of ENS users reaches a certain scale, the annual revenue of ENS is close to the user base of $5. Without changing the charging rules, there may be an invisible ceiling for ENS revenue.
According to the spirit of web3, users' data, assets and other digital assets are kept by the users themselves. The service provided by ENS is only to convert the Ethereum address into "beautiful "Number" shows that in essence, users still participate in web3 through the Ethereum address, even if users do not use ENS, they can still participate in web3. Therefore, the value capture of ENS to web3 is not a "direct" relationship, but an unnecessary indirect relationship.
Summary
ENS is a monopoly company that exclusively sells .eth domain names. It has a broad mass base and a deep moat.
ENSToken does not have a strong connection with the ENS project. Currently, ENSToken can only capture the emotional value of the good news of the ENS protocol.
ENS is a very important part of web3, but not necessarily an integral part.
ENS domain name NFT transaction analysis
Macro angle
According to Opensea's data, there are currently 183,680 ENS domain names that have been placed on Opensea, and the proportion of pending orders is close to 13%.
Judging from the data of ENS domain names in the NFT market, ordinary users are still the main theme of ENS. More than 70% of users hold one ENS, and about 87% of users hold three or less ENS. From the perspective of holding time, users who have held for more than 3 months account for about 55%.
From the transaction data of ENS domain names, the turnover rate of ENS is nearly 5.74%. According to the transaction data of Opensea in the past year, especially the transaction data after the issuance of ENS tokens, before the domain name hype boom, the daily transactions were only in the order of dozens of transactions, but after the domain name hype boom, the number of transactions dropped sharply. Dropped to the order of hundreds of transactions per day. Corresponding to such a large market of ENS, the overall liquidity of ENS domain names is low.
Considering the particularity of ENS domain names, the proportion of domain names with trading attributes is relatively small in the overall domain name market, and the trading depends on "fate". However, at a time when the trading volume of the NFT trading market is shrinking, the trading volume of ENS domain names is showing an upward trend against the trend.
Specificity of ENS domain name NFT
Quasi-official production
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ENS, as a project supported by the ETH Foundation, has also been named by V god To my credit, ENS is by far the most successful non-financial Ethereum application. V God also changed the Twitter name to vitalik.eth to "bring goods" to ENS. The ENS project does not accept any external investment, and only receives funding from various foundations such as the ETH Foundation, thereby maintaining the independence of the ENS project.
The ENS project can be regarded as the "son" of ETH, and the ENS domain name NFT can be regarded as the official NFT issued by ETH.
Long-term and stable real use requirements and potential application scenarios
The difference between ENS domain name NFT and the current mainstream PFP/PASS card NFT is that ENS domain name NFT meets a long-term and stable real demand , replace the wallet address with your favorite .eth suffix domain name, this basic requirement is difficult to be replaced.
ENS domain name transaction data analysis
According to NFTGO data, the total historical transaction volume of ENS domain names is 10.954w, from November 01, 2021 (announcement of currency issuance) to July 06, 2022 The total volume of transactions is 10.509w, accounting for 95.9% of the total number of transactions. The total transaction volume from April 27, 2022 (the first day of ENS domain name hype) to July 6, 2022 was 9.247w, accounting for 84.4% of the total transaction volume. The ENS domain name transactions in the past three months accounted for the absolute proportion of the total transaction volume, and all subsequent data in the past three months were used as the time interval for analysis.
Micro perspective
Data Statement:
< /p>
Data collection range: April 25, 2022 - July 7, 2022
Some of the data captured by the API used this time mistake. The reasons include the use of other ERC20 Tokens as settlement currencies, errors caused by API reasons, and the inability to find the transaction volume of a specific single NFT in batch transactions. Ignore the data for various reasons of error. And ignore the transactions whose transaction amount is less than 0.001.
The subsequent data analysis of this article is inevitably wrong, and it is not used as any investment reference
To sum up: the number of effective statistical transaction samples is 94883.
ENS Domain Classification:
Adopt the classification method in ENS official API, a domain name has two attributes:
length : domain name character length
trait_type: domain name characteristics
digit: purely numeric domain name
letter: pure English letter domain name
alphanumeric: only Contains numbers and characters (Chinese, English, Arabic, etc. are counted as characters)
mixed: domain names containing special characters, such as emoticons, punctuation marks, etc.
From the perspective of price range
Among all transactions, turnover <0.1 accounted for 66.94%, and turnover <1 The ratio is 91.84%. There are only 623 transactions with a turnover greater than >5, accounting for only 0.66%. Judging from the results of transaction data, low-priced ENS domain names are the mainstream of transactions. The data shows that the average price of all transactions is 0.344. The 25th percentile price is 0.02, the 50th percentile (median) price is 0.05, and the 75th percentile price is 0.18.
Transaction price>1 The transaction quantity accounted for nearly 8.16% and contributed nearly 68% of the transaction amount. In particular, transactions with a transaction price > 5 accounted for 30% of the transaction quota with a transaction volume ratio of 0.66% (623 transactions). Combined with the transaction volume, the transaction volume contributed by TOP 0.66% and 91.84% The transaction volume contributed by the trading platform is evenly matched.
The transaction of ENS domain name NFT is divided into transaction amount <1, between 1-5 between, >5 three intervals. There is an order of magnitude difference in the number of transactions in these three price ranges, but the transaction volume is close to 1:1:1. The turbulent transaction wave of ENS is mainly provided by transactions with a transaction price greater than 1. These "big fish" are the promoters of the wave and the contributors to the bubble.
From the perspective of ENS domain name categories
Judging from the median and average transaction prices of domain names in various categories, the average transaction price and median transaction price of domain names with only 3 digits and 4 digits can obviously exceed The gas fee when the ETH main network is congested. In addition to these two categories of domain names, the average and median transaction prices of other types of domain names are low. Combined with the characteristics of poor liquidity of NFT transactions, investing in these domain names may have high liquidity risks.
From the perspective of domain names, digital domain names are the largest component in terms of transaction volume and turnover. For other types of domain names, the volume-price relationship between the number of transactions and the amount of transactions does not match. To put it simply, digital domain names are well received and well received. Alphabetic and text domain names are popular but not popular, while mixed domain names are neither popular nor popular.
In the subdivision of digital domain names, 3-digit domain names start with 1 % of the transaction volume, contributed 29% of the transaction amount. The 4-digit digital domain name accounts for a relatively large proportion of both the transaction volume and the transaction amount.
It can be seen from the proportion of TOP10-100 transactions of each digital domain name to the overall turnover , 3-digit, and 5-digit domain names accounted for nearly 50% of the top transaction amount, indicating that some special domain names were sold at a price far exceeding similar ones. ".
The data shows that the number of transactions of 3-digit domain names is 522, and the number of 3-digit domain names with transaction records is 344. The transaction volume of 4-digit domain names was 12,790, and the number of 4-digit domain names with transaction records was 6,135. The number of transactions of 5-digit domain names was 28,118, and the number of 5-digit domain names with transaction records was 24,418. From the above transaction data, it can be seen that the liquidity of 4-character domain names is the highest among digital domain names.
On the whole, 4-character domain name is the most cost-effective investment target among digital domain names.
Other types of domain names
For other types of domain names, there are too many domain name combinations, and the number of scarce domain names is relatively small. In the investment process of this type of domain name, the difficulty of selecting investment targets is far greater than that of digital domain names.
In these domain name transactions, the TOP trading platform accounts for an excessively large proportion of the total turnover. Average and median prices remain low. Compared with digital domain names, unless you encounter obviously better domain names, it is more difficult to invest.
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