Domain names in NFT, the new crypto-speculators trend

Forget the pictures of monkeys and other works of art. The new treasure of NFT and cryptocurrency enthusiasts is now buying … domain names.

Just as known “. it “or”. com ”, there are“. eth ”, addresses on the Ethereum blockchain. They do not give access to websites but to cryptocurrency wallets. And these addresses, in the form of NFTs, have been the subject of growing interest from cryptocurrency enthusiasts for several months. According to the specialized site CoinDesk, on April 28 the tokens of the “Bored Ape Yacht Club” collection – the most prominent – even recorded a lower volume of sales than those of the Ethereum Name Service on the OpenSea platform.

Parallel to classic domain names

Since its debut in 2017, Ethereum Name Service (ENS) has been an address book on the Ethereum blockchain. Their role: to simplify access to cryptocurrency wallet addresses. “On the blockchain we are identified by a fairly complex code made up of a series of numbers and characters. It’s not easy to convey or remember and it’s not the easiest way to identify, ”explains Simon Polrot, head of European affairs at the Association for the Development of Digital Assets (Adan).

To remedy this, ENS “converts” Ethereum addresses into a domain name (numbers or a common name, for example) ending in “.eth”. This is the same principle as “classic” domain names on the web: a domain name, such as lesechos.fr, allows you to associate a legible and understandable name with an IP address made up of numbers. The ENS is therefore a service comparable to the Domain Name System (DNS), which was established at the beginning of the Internet.

Easier access to an Ethereum address

Registering a new address is quick, instant, and costs the equivalent of at least $ 5. Once created, “we can put everything that works into the Ethereum ecosystem,” notes Simon Polrot. The eth address corresponds to a “wallet” (digital wallet), and therefore allows you to see the history of transactions, but also the NFTs owned, for example.

“The address can also be used to make donations, which is easier than copying and pasting a long address made up of numbers and letters,” adds the cryptocurrency specialist.

Since 2017, the functions of the domain name have expanded. The addresses in. eth therefore allow you to host the connection to other cryptocurrencies.

“We speculate on the future”

While this service has been around for five years, the number of domain name registrations on the ENS has skyrocketed in recent months. More than 378,000 new addresses were registered in July according to ENS, a record. This excitement is explained by the fact that domain names, once purchased, are NFTs and can be resold on platforms such as OpenSea. And some names can be very expensive.

“We can really draw a parallel with the acquisition of domain names in the early 2000s, when people speculated about them,” recalls Simon Polrot. “The idea is to say that if Ethereum is the financial infrastructure of the future, owning a domain name can be useful in the future. Finally, few today find real use in owning a domain name.” We are speculating about the future. ” , blows the cryptocurrency specialist.

Collection phenomenon

Since the beginning of the ENS, brand names and common names, but also aliases and personality names were the most popular. Chanel.eth or nike.eth, for example, have been sold for tens of thousands of dollars, according to the American media outlet Quartz.

But interest has focused on three- or four-digit domain names for several months. “This is clearly a rather speculative phenomenon, an anticipation of the rarity and usefulness of these names”, analyzes Simon Polrot. It’s hard to know what triggered this movement, but “there is a gathering phenomenon taking place, like with the ‘Bored Ape Yacht Club'”, he continues.

To become the proud owner of a collectible – 187.eth or even 000.eth -, you’ll still have to pay the price: currently, the cheapest three-digit domain names on the OpenSea platform are trading over $ 40,000. As for 000.eth, it sold for nearly $ 300,000 in early July.

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