Ethereum Name Service’s native token ENS surged over 40% on Jan. 3 after Ethereum co-founder Vitalik Buterin spoke positively about the platform and said it was “super important” for the ETH ecosystem.
As of press time, ENS was trading at approximately $13.94, up 40.38% over the last 24 hours. The token has a market cap of around $423.20 million.
The token’s trading volume over the same period stood at roughly $364.28 million, indicating a high level of market activity.
Addresses linked to Ethereum names collectively control around $277 million in various cryptocurrencies, including ether, wrapped ether, USDC, and Uniswap tokens. The large sum is indicative of substantial financial activity within the ENS ecosystem.
ENS integration
Buterin’s endorsement of ENS, describing it as “super important,” has played a pivotal role in the upward trend.
He believes that Layer-2 blockchains must integrate ENS domains to enhance the user experience in decentralized finance (DeFi) as they need a trustless, Merkle-proof-based CCIP resolver. Such integration would allow ENS subdomains to be registerable, updatable, and readable directly on Layer-2 platforms.
Buterin also recently proposed a new tax on ENS domain names, aiming to ensure broader brand adoption and decentralized ownership of ENS addresses. The proposed tax involves a 3% annual fee based on the highest bid for a domain name.
This fee model is intended to discourage the hoarding of domain names for profit and encourage their use by entities who will actively use them, thus promoting wider adoption and potentially benefiting ENS token holders as the funds from these fees would support the DAO (Decentralized Autonomous Organization) associated with ENS.
Demand-based recurring pricing
Buterin also previously suggested alternatives to Harberger taxing ENS domains in 2022.
Instead of Harberger’s model, where asset owners set their asset’s value and pay a percentage of it in yearly taxes, Buterin proposed a demand-based recurring pricing model.
This model would see annual domain fees rise in proportion to a domain’s valuation, which in turn would increase based on open bids made by other users. The goal of this approach is to create a fairer and more dynamic pricing mechanism that reflects the actual demand and value of ENS domain names.