ENS is a prototype for building a blockchain-based identity system. For it, the degree of “decentralization” determines how high its ceiling is.
Written by: Pan Zhixiong
As the underlying basic protocol in the Ethereum ecosystem that is closest to the form of decentralized identity (DID), the Ethereum Domain Name System (ENS) may be one of the few innovative projects that can be compared with Uniswap or Gitcoin, and it is worth mentioning. Yes, because the subscription fee system was selected in the early stage, it has continued to operate until now without the support of venture capital.
And these three projects also have relatively similar characteristics, such as:
It has been in operation for more than 3 years, and no tokens were launched in the early stage;
The role of tokens is based on the governance of the agreement itself, and both support the governance model of the agent;
It has a deep relationship with the Ethereum Foundation and is also a part of the core of the Ethereum ecosystem;
The protocol is relatively low-level and has significant composability advantages: Uniswap solves the problem of asset liquidity, Gitcoin solves the problem of public goods funding, and ENS provides users with a decentralized domain name and identity.
In addition, these three have considered the “decentralization” of the protocol itself, so they have adopted an airdrop mechanism to issue governance tokens for the early users of the protocol free of charge, and these three projects have used more than 60% of the total tokens. The Treasury (DAO) assigned to the community, early users, contributors, or agreement. Although the degree of decentralization is not as good as the Year (YFI) DeFi protocols that adopt completely fair distribution, these three protocols are relatively fair. Among them, ENS is because it has not received VC investment and will not give any Only institutions that provide financial support distribute tokens.
Horizontal contrast
On the whole, among these three agreements, ENS is the one with the longest operation and maintenance time and is relatively more decentralized. The user base is also very large. However, because these three are three completely different tracks, the difference between them The financial situation cannot be directly compared.
From the perspective of the timeline, it can be found that ENS is the first agreement to launch the mainnet and the latest token, which has gone through more than 4 years. In contrast, Uniswap seems a bit anxious, perhaps because it was forced by Sushiswap to counterattack, otherwise they may launch governance tokens later.
Judging from the number of early users, although the number of users of ENS is only about half of that of Uniswap, it can also be regarded as one of the protocols with the largest number of users in the Ethereum ecosystem. And because Gitcoin is mainly aimed at developers and other groups, the user scale is definitely not as good as the above two.
On the other hand, how to maintain the iteration and update of the agreement for a long time. All three of them can rely on a large number of native tokens in the treasury to support the development and operation of the agreement. In addition, Uniswap can also rely on potential transaction commissions (not yet enabled), Gitcoin can rely on community donation commissions to obtain additional income, and ENS has adopted an annual subscription system, so they are in the Ethereum fund Soon after the incubation, it will rely on these incomes to become an independently operated organization.
Token distribution comparison
Uniswap
The total number of UNI tokens is 1 billion. After 4 years of unlocking, it will inflate at an annual rate of 2%. The initial distribution method is:
60% is allocated to Uniswap’s communities and users (15% of the total amount has been airdropped retroactively and liquidity mining has been carried out)
21.266% allocated to employees, unlocked in 4 years
18.044% allocated to investment institutions, unlocked in 4 years
0.69% allocated to consultants, unlocked in 4 years
Specific details link
Gitcoin
The total amount of GTC is 100 million, and the initial distribution method is:
Specific details link
ENS
The total number of ENS tokens is 100 million, and the initial distribution method is:
25% airdrop to .ETH holders
25% allocated to ENS contributors
50% allocated to DAO’s treasury
Specific details link
How important is decentralization to ENS?
When the ENS team decided to launch the ENS token, they used one sentence to summarize why they did this:
ENS has always been an open public facility belonging to the community. The core part of ENS is decentralized and self-operating (for example, no one can steal another person’s ENS name), but there are also some things that require human intervention to determine.
It is also because ENS is one of the few projects in the Web3 protocol stack that can obtain continuous income, so they are confident that they do not need any financial support from investment institutions, and this feature happens to be a decentralized infrastructure. The components are particularly valuable.
However, this does not mean that selling tokens to VCs must be the worst choice. After all, many innovations are also realized with their help, such as the V3 version designed by Paradigm and Uniswap, which significantly improves the financial efficiency of AMM.
But if you really want to compare, ENS is a lower-level public facility than Uniswap. After all, “transaction” can be regarded as an application layer thing, and ENS is a prototype for building a blockchain-based identity system. For such an agreement In other words, the degree of “decentralization” determines how high its ceiling is.
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