Understanding Web3 Name Service
Hello everyone!
I’m Neo — Admin — Community Manager of Optimus Finance and Growth Marketing of LECLE Vietnam.
Web3 is gradually reshaping how we interact with the internet and Web3 Name Service (WNS) stands out as a crucial technology contributing to this transformation.
In the Crypto market, WNS plays a significant role in enhancing user experiences and fostering the development of DeFi and NFT applications. But what exactly is Web3 Name Service?
This article aims to provide a deeper understanding of this concept and highlight the key features of Web3 Name Service, bringing maximum benefits to both users and participants in the Crypto market.
Let’s delve into the details of Web3 Name Service to gain a comprehensive and insightful view of this technology and how it is changing the landscape of the Crypto space.
1. Web3 Name Service Overview
1.1. What is Domain Name System (DNS)?
Domain Name System (DNS) is a crucial concept in the field of technology, especially when it comes to identifying and accessing websites or online resources. In the blockchain environment, domain names operate similarly, but instead of merely identifying a website, they have the specific function of pinpointing an address within the blockchain system.
With the uniformity and uniqueness of each character string, Domain Name System becomes a crucial foundation for understanding how we search for and connect with online information. In the context of blockchain, domain names play a vital role in identifying and accessing blockchain addresses, creating a flexible and easily accessible linking system for the user community.
1.2. What is Web3 Name Service (WNS)?
Web3 Name Service (WNS) is a decentralized domain platform deployed on the blockchain, aimed at providing a convenient experience for users accessing blockchain addresses. WNS allows users to utilize easily memorable domain names instead of memorizing complex and lengthy address strings, creating convenience and consistency in communication on the blockchain (Example: instead of 0xabcdex…, you can use myname.eth).
The operational mechanism of WNS is designed similarly to DNS (Domain Name Service) in the Internet space. Just as DNS converts domain names into IP addresses, WNS converts its domain names into blockchain addresses, enabling users to easily conduct transactions, access blockchain applications, and participate in the community without the need to remember complex addresses. WNS plays a crucial role in creating a flexible and convenient environment for users to engage in the Web3 space.
2. The key features of WNS
- Decentralized: Not reliant on any single entity, making it resistant to censorship and increasingly stable over time.
- Security: Stored on the blockchain, ensuring immutability and robust ownership.
- Cross-Platform Interoperability: Can be used across various blockchain platforms.
- Simplified Wallet Addresses: Possesses user-friendly and shareable characteristics, creating a more pleasant user experience compared to complex blockchain addresses.
3. The developmental history and notable milestones of Name Service
Here are some notable milestones in the Web3 Name Service market:
- 5/2017: Ethereum Name Service (ENS) was launched to bring identity to the Ethereum network.
- 12/2018: Unstoppable Domains emerged with a more diverse domain extension. Initially operating on various blockchains, Unstoppable Domains later shifted its focus to the Polygon network.
- 3/2020: Lens Protocol was introduced with the .lens domain extension operating on Polygon. Lens stood out for developing a Dapp ecosystem using .lens.
- 7/2021: ENS reached the milestone of 1 million registered domains on the Ethereum network.
- 8/2021: Budweiser, one of the world’s largest beer companies, purchased the domain beer.eth for $100,000.
- 10/2021: Ethereum Name Service announced an airdrop for those who had previously registered domains. ENS’s market cap reached a peak of $1 billion.
- Late 2021 — Early 2022: Numerous Name Service projects emerged following the trend on various blockchains such as Polkadot, Harmony, Oasis, Cronos, Evmos, etc.
- 4/2022: The domain market heated up as numeric domains were sold at high prices.
- 5/2022: RTFKT (owned by Nike) spent an additional $35,000 to acquire more ENS domains for their collection.
- 7/2022: Unstoppable Domains, the second-largest player in the market, raised $65 million at a $1 billion valuation from Pantera.
- 8/2022: ENS reached the milestone of 2 million registered domains on the Ethereum network.
- 8/2022: Space ID, the next major domain project, was launched with investment from Binance Labs, stirring up the domain market not only on BNB Chain but across the entire industry.
- Early 2023: The market witnessed a surge in the trend of minting domains on various blockchains to hunt for Retroactive tokens from Name Service projects.
- 3/3023: Ethereum Name Service revenue reached 38,000 ETH, and transaction volume on Opensea reached 74,000 ETH.
In addition, there is a plethora of domains being sold at very high prices in the market. Here are the top 5 highest-priced domains ever recorded: paradigm.eth ($2M), pjfi.eth ($463,000), 000.eth ($317,000), abc.eth ($254,000),…
4. How Web3 Name Service works
Web3 Name Service (WNS) is a system that establishes a link between memorable domain names and blockchain addresses by creating and managing special NFTs. Information about the domain name and address is recorded in the NFT, ensuring certainty and ownership rights on the blockchain platform.
When you register a domain on WNS, you can use it for various purposes, including transferring cryptocurrency assets, accessing websites, and interacting with other blockchain applications. This simplifies the user experience, eliminating the need to remember complex blockchain addresses. Instead, users can easily use WNS domain names to execute transactions and interact with cryptocurrency assets, making blockchain usage more convenient and intuitive.
For instance, rather than having to remember a complex blockchain address, users can simply use a WNS domain name to send coins/tokens.
5. The role of Web3 Name Service
Web3 Name Service (WNS) plays a crucial role in creating and providing a decentralized domain system for Web3, where applications and resources are built on blockchain platforms. Here are some key roles of WNS:
- Domain Management and Linking: WNS provides a decentralized database for registering and managing domains on the blockchain, enabling users to easily manage their domains.
- Easy Interaction with Blockchain: WNS facilitates user interaction with the blockchain more conveniently by using domain names instead of complex blockchain addresses.
- Ownership and Information Security: Domain information is stored in decentralized tokens like NFTs, ensuring immutability and security.
- User-Friendly Interface: WNS provides a user-friendly interface that allows users to easily manage and interact with their domains, integrated with browser and app functionalities.
- Integration with DApps and Blockchain Systems: WNS can integrate with DApps and other blockchain systems, creating a flexible infrastructure for linking and interaction.
- Partnerships and Standardization: WNS plays a clear role in defining standards for domain management in the Web3 space, creating a unified environment for users and developers.
With these benefits, WNS not only establishes an efficient domain management system but also contributes to the widespread adoption and integration of blockchain technology into the daily lives of Web3 users.
6. The challenges of Web3 Name Service
Here are some drawbacks and challenges faced by Web3 Name Service projects:
- Usage fees: Name Service projects require usage fees for domain registration and system maintenance. Striking a balance between setting reasonable fees to attract users and ensuring the system’s sustainability poses a significant challenge.
- Security: If a user loses their private key or falls victim to a hacker attack, they may lose control of the domain and might not be able to recover it, unlike in traditional markets.
- Speculation limitations: Domain speculation is a legitimate activity that attracts many speculators, creating a vibrant buying and selling market. However, if some parties decide to register brand domains they do not own, they may render valuable domains useless.
- Blockchain adoption: The success of Name Service projects is directly proportional to the number of blockchain users. Therefore, if a Name Service project chooses to operate in a less appealing or non-growing market, it may face limitations.
- Application support: This is a significant challenge for Name Service projects. If applications do not support or integrate with them, their impact and scale may be negligible.
Therefore, Web3 Name Service is considered a suitable market for blockchain infrastructure organizations or large-scale projects, rather than for individual small-scale builds in other fields. The term ‘Winner takes all’ is most fitting to describe the characteristics of this market.
A critical determinant in the development of Web3 Name Service projects is recognition from foundations, communities and other projects to enhance awareness and adoption of the created domains. This can help build credibility, attract interest from partners and users, and lay the groundwork for sustainable development in this competitive market.
7. Closing thoughts
Web3 Name Service (WNS) plays a crucial role in the advancement of the Web3 space, bringing significant improvements to user experience and simultaneously providing favorable conditions for the development of DeFi and NFT applications in the crypto market. With the substantial growth of the current crypto market, WNS solutions promise to continue evolving robustly in the future, aligning with the trend towards an increasingly diverse and vibrant Web3 ecosystem.
What about your thoughts? If you want to know further about it, don’t hesitate to share it with us! 😀
This post is for educational purposes only. All materials I used were the different reference sources. Hope you like and follow us and feel free to reach out to us if there is an exchange of information. Cheers! 🍻
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