Unstoppable Domains VS Ethereum Name Service

Unstoppable Domains (UD) and the Ethereum Name Service (ENS) are both used to map crypto wallet addresses to human readable names. They do similar jobs but there are important distinctions between the two. Let’s explore some of these similarities and differences.

Similarities

The Domain Name System (DNS) is critical in the world of Web 2.0, and maps IP addresses to human readable URLs. There are similar systems that map 40 character crypto wallet addresses to human readable names and they will be equally important to the next generation of internet technologies.

Anyone wanting to send crypto via wallets must know the wallet address of the recipient but a 40 character wallet address is difficult for humans to remember. UD and the ENS are the two leading protocols that convert these wallet addresses into a human readable name. For example an address could be converted from 1BpatSLRitKN2gkdXEeobR76b53LETtpyT  to example.eth using the ENS or example.crypto using UD. Both ENS and UD also offer the ability to extend the primary domain with subdomains.

History and Goals

ENS was founded in 2017 and was a project led by the Ethereum foundation. Their website states that the ENS is  “a public good, a basic piece of Internet infrastructure that belongs to the community. Anyone and everyone is free to interact with the protocol”. As of 2018 its development and standardization has been led by True Names Limited, a Singapore based non-profit company.

Unstoppable Domains, the company which shares its name with the protocol, was founded in San Francisco in 2018 by Matthew Gould and Bogdan Gusiev who now act as the project’s CEO and CTO respectively. Their website claims that they “are creating NFT domains that put you back in control of your data” through the use of “domains with superpowers”. They also want to onboard 3 billion people to the decentralized web.

Funding

The ENS was initially launched by the Ethereum Foundation who also gave a $1 million loan to the creators to create True Names Limited in 2018. In November 2021 ERC-20 tokens were airdropped to users of the service. Holders can use these tokens to vote on policies much like shareholders of a company can vote on some decisions. The tokens can also be traded for currencies on exchanges, providing another source of income for the project’s developers.

UD is funded by venture capital and as of September 2022, the company has been through 3 funding rounds, raising a total of $71.9 million from 27 investors. $65 million of this came on July 27th 2022 in a series A round led by Pantera Capital with backing from 19 other investors.

Centralization

One of the biggest differences between the two protocols comes down to their levels of centralization. ENS is operated by a Decentralized Autonomous Organization (DAO) and allows users to vote on policies and submit proposals of their own for changes to the protocol.

Since UD is a private for-profit company, users of the protocol have little direct input into how it’s run but it does mean that the protocol’s policies can be controlled more stringently. One example of this was the lack of domain squatting on the system, an issue which plagues the ENS, through reserving domain names of famous people or companies so only the respective person/company could use it. However this policy ended in April 2022 after the “sunrise period” for the policy expired.

Costs

ENS names can only be bought for set periods of time and must be renewed after ownership expires, the buyer must also pay gas fees when buying or renewing the domain which can sometimes cost hundreds of dollars. ENS also suffers from domain squatting where people buy domains, anticipating that they can sell them for much more in the future but have no intention of using them for any productive purpose.

UD on the other hand moved to the Polygon blockchain on November 15th 2021 and since then, requires no gas fees to mint the domain name.  The company says this will save the average user over $165 in gas fees per year per domain. UD also allows customers to buy extensions using fiat currency as well as cryptocurrency should they wish.

Popularity

ENS has 1.8 million names with 378,000 new .eth registrations in July 2022 alone. Many of these can be seen on Twitter where .eth is commonly put at the end of a Twitter username to make the Twitter username the same as their ENS domain.

UD has reportedly registered 2.5 million domains as of August 2022, quite impressive given it’s 1 year younger than the ENS.

Extensions

ENS only offers .eth extensions for domain names.

With UD,buyers can select from 10 extensions such as .crypto, .nft and .blockchain. .x however is supposedly the most prestigious because it’s only 1 character long.