
- ENS DAO has passed a proposal to fund a variety of initiatives, including the ENS Fairy project, which intends to buy domains in premium and gift them to celebrities and brands to increase ENS adoption.
- The project will get $50,000 in USDC and 174 ETH (around $270,000 at the time).
- The ENS community pointed out that the ENS DAO would effectively bypass the premium fee because the fee theyโd pay would go back to the DAO.
- ENS founder Nick Johnson responded by saying that the point of ENS was โalways to get names into the hands of people who will use them,โ not the speculators.
Ethereum Name Service (ENS) has been engulfed in controversy lately. The ENS DAO, the governing body of the ENS protocol, has passed a proposal allowing it to buy domain names in premium and gift them to celebrities and brands to spur ENS adoption.
The proposal, made by the ENS Ecosystem Working Group, asked the ENS DAO to fund its activities for the first and second quarters of 2023. One of the projects the ENS Working Group requested funding for is ENS Fairy, a tool used to gift ENS names.ย
Sponsored
The project will receive $50,000 in USDC and 174 ETH (around $270,000 at press time).
Alisha.eth, who works for ENS Labs, described the ENS Fairy initiative as a way to โcompete with speculatorsโ because โany ETH spent on premium names will then go back into the controller.ens.eth wallet.โ
In other words, as some users pointed out, this would allow the ENS DAO to effectively bypass the premium fee by snatching domains in premium and paying the fees back to the DAO.
On top of that, ENS founder Nick Johnson suggested on Twitter that the DAO might purchase ENS names that might be considered offensive and burn them. He also called ENS investors โsquatters.โ
None of this sat well with the majority of the ENS community members.ย
ENS Community Responds to ENS DAOโs Controversial Proposal
While the proposal did pass, the members of the ENS community, at least the ones active on Twitter, responded with criticism towards the ENS Fairy initiative and the way it was presented.
For example, a user under the pseudonym โsatโ said on the ENS governance forum that the presumed bypassing of the premium fee โshould not be allowed on principleโ and that no matter how good the DAOโs intentions are, it โshould not have powers to bypass this fair market mechanism.โ
Thatโs because, according to sat, the whole situation can become a โvery slippery slopeโ once thereโs a โpolicing systemโ in place.
โThis becomes a very slippery slopeโฆ Who decides what should be removed from circulation (at no expense to anyone)? We end up creating a POLICING system, and introducing bias to a credibly neutral system,โ they said.
Others on Twitter echoed satโs worries. tjlarking.eth said that itโs virtually impossible to determine what โcounts as a brand or celebrity name.โ
โIf gates.eth came up, would that count so they could give it to Bill Gates? What about the hundreds of thousands of other people with that last name?โ he asked, adding that everyday people would be unable to get their names because a โricher guy has it.โ
The second and most obvious issue; is who determines what counts as a brand or celebrity name.
— tjlarkin.eth (@TJLarkin23) January 30, 2023
If gates.eth came up, would that count so they could give it to Bill Gates? What about the hundreds of thousands of other people with that last name? pic.twitter.com/uHS2fjvag6
Others, like anon.eth, pointed out that the funding request โwas just bundled together with a lot of other requestsโ and that there were โno specific guidelines for how the funds would be used.โ
One of the main issues is that this funding request was just bundled together with a lot of other requests
— anon.eth (@player1_eth) January 31, 2023
There's a lack of insight and no specific guidelines for how the funds would be used
But, despite the criticism, the ENS DAO still defended the ENS Fairy initiative.
ENS DAO Defends the ENS Fairy Initiative
ENS founder Nick Johnson responded to the critics saying that the goal of ENS was โalways to get names into the hands of people who will use them,โ instead of speculators.
โAnyone considering buying names that clearly identify a trademark or notable individual might want to remember, too, that in such a situation the buyer holds all the cards. It's a monopsony, and as such the buyer gets to set the price,โ he said.
Johnson added that itโs hard to sell oneโs domains if they turn down offers, especially if the buyer publicizes the offer.
I feel like those people never got that the point of ENS was *always* to get names into the hands of people who will use them, over those who will speculate with them or attempt to resell them at a profit. This is particularly true when it comes to names with one natural owner.
— nick.eth (@nicksdjohnson) January 31, 2023
Other ENS employees like serenae.eth offered potential solutions to the problem.
โDon't allow the funds to effectively be funneled back into the DAO. If such a purchase is made, then the DAO could decide to donate the same amount to a charity or public good. So the DAO would not be able to do this for "free" ad infinitum,โ they said.
They also added that the DAO could do a snapshot vote before buying domains.
1. Don't allow the funds to effectively be funneled back into the DAO. If such a purchase is made, then the DAO could decide to donate the same amount to a charity or public good. So the DAO would not be able to do this for "free" ad infinitum.
— serenae.eth | 914.eth | 9767.eth (@serenae_fansubs) January 31, 2023
On the Flipside
- Itโs still unclear what the ENS Fairy initiative is going to look like, even though the proposal has passed.
Why You Should Care
ENS is one of the most effective and adopted projects in the crypto space. ENS users should follow this discussion and see how they could be impacted once the decision on what to do with the ENS Fairy initiative is made.
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