ENS Finance Report (February 2021)
The Ethereum Name Service (ENS) is a public good that belongs to the community. As such, we’d like to offer more transparency on where our funding comes from and where it’s going. This is the first of what we plan to be many regular financial updates.
To understand the finances of ENS, you first have to understand a bit about how the ENS team is structured.
ENS is an open source project, so technically no one “works for ENS.” The team listed on the Organization page of the ENS homepage works for True Names LTD, a Singapore-based non-profit organization dedicated to the development of ENS. Though True Names LTD is incorporated in Singapore, the True Names LTD team is spread across New Zealand, Taiwan, Europe, and the United States.
The ENS root is managed by a 4-of-7 multisig, the key holders of which are also listed on the Organization page. Only one of the multisig key holders also works on ENS development: Nick Johnson, who is the creator and lead developer of ENS. The rest are Ethereum community members from other projects. Having most of the root key holders from outside projects provides accountability for the project.
Among the jobs of the ENS root multisig key holders is managing the ETH raised from .ETH name registrations and renewals. For the ENS development team at True Names LTD to access that ETH, we would have to submit a request/proposal to the ENS root multisig key holders and they would have to decide to dispense it to us. So far, True Names LTD hasn’t requested any ETH from the ENS root multisig key holders and no ETH has been dispensed from the ENS root multisig.
ENS is an open source project. The non-profit True Names LTD is the organization that de facto manages and develops ENS. The 4-of-7 ENS root multisig receives the ETH paid for .ETH name registrations and renewals and will determine how it is used.
ENS development has had two funding sources: (1) grants and (2) revenue from .ETH name registrations and renewals.
True Names LTD has received grants from the Ethereum Foundation (the largest source), Chainlink, Protocol Labs, and others listed on our website.
.ETH name revenue
In May 2019, ENS switched from a deposit model (reclaim your pre-May 2019 deposits here) to an annual spent fee model. As mentioned above, all ETH spent on .ETH name registrations and renewals goes to the ENS root multisig, not to True Names LTD. True Names LTD plans to petition the ENS root multisig key holders for regular dispersals of these funds for the long-term funding of ENS development, but True Names LTD has not yet requested any ETH from the ENS root multisig key holders. (There is a precedent in the legacy Internet community for this kind of long-term funding: the IETF and others are funded by registrations and renewals of .ORG domain names on DNS.)
In late 2019, 3–6 character .ETH names were opened for registration (previously only 7+ character .ETH names had been available). For the initial distribution, we hosted a one-time auction in collaboration with OpenSea. The ETH raised by that auction (5,699 ETH, worth ~$1.1 million at the time) went to True Names LTD. True Names LTD has sold off some of that ETH over the last year to fund development work.
The short name auction and the first year and a half of the spent fee model for .ETH name registrations and renewals happened to take place while the price of ETH was significantly lower than it is now ($100–$300 range). True Names LTD and the ENS root multisig key holders have kept most of those funds as ETH, which has recently appreciated greatly in value, significantly increasing the value of ENS development funding reserves.
The ENS development team at True Names LTD has so far been funded by a combination of grants and selling some ETH raised from the .ETH short name auction in late 2019. The plan for sustainable long-term funding of ENS development is to petition the ENS root multisig key holders for periodic dispersals of the ETH raised from .ETH name registrations and renewals.
2020 Income and Expenses
- $310,000 from various grants
- $700,000 from selling ETH
- $760,000: mostly salaries, but also banking fees, accounting, legal advice, hackathon prizes, bounties, travel expenses (prior to COVID-19 lockdowns), and hosting costs for the website and other services.
True Names LTD has 3 full time devs, 1 full time director of operations, 2 part time devs, and a part-time graphic designer.
- $362,000: how much True Names LTD had in its bank account at the end of 2020.
Below are the balances as of this writing of the various Ethereum wallets controlled by True Names LTD and the ENS root multisig, as well as the True Names LTD bank account.
The estimated values of ETH in USD provided in parentheses is based on the market price as of this writing of $1700/ETH (though of course this is volatile).
True Names LTD
- True Names LTD hot wallet, hotwallet.ens.eth: 169 ETH (~$287,300)
- True Names LTD cold wallet, coldwallet.ens.eth: 1730 ETH (~$2,941,000)
- True Names LTD bank account balance: $1.2 million
Most of the current bank account balance comes from selling off 720 ETH at ~$1350/ETH for ~$1 million at the end of January. Nick Johnson announced this sale on Twitter.
ENS Root Multisig
- .ETH Controller, controller.ens.eth: 5,626 ETH (~$9,564,200)
This is where ETH paid by users for .ETH name registrations and renewals (the ENS fee; not Ethereum network gas fees, which go to miners) initially goes. This is controlled by the ENS root multisig.
- ENS Multisig, multisig.ens.eth: 2,272 ETH (~$3,862,400)
This is the ENS root multisig itself. Currently it holds ETH from .ETH name registrations and renewals prior to the bug fix migration in early 2020.
Total value (ETH + USD) held by True Names LTD: ~$4,428,300
Total value held by ENS root multisig: ~$13,426,600
Total value held by True Names LTD + ENS root multisig: ~$17,854,900
Plans for the Future
We’re building ENS for the long-term; we want ENS to last for decades as a new core piece of Internet infrastructure.
Given the increased resources now available for ENS, there are two things we’d like to do:
1) Expand the core ENS dev team at True Names LTD
The ENS team has accomplished a lot, but there’s more work still to do: DNS namespace integration, layer 2 work, other scaling work, preparation for ETH2, overhauling the ENS Manager App UI, registration and management improvements, new record types, documentation, support, more integrations, outreach to users and legacy Internet communities, et al.
We’re interesting in possibly doubling our core full-time team from four to around eight if we can find the right people. Types of roles we’re looking to fill, roughly in this order (someone could possibly do more than one thing):
- Senior level developer able to tackle complex problems building new tech that doesn’t exist yet
- Front-end developer who wants to help make the most user-friendly UI in the industry
- Full stack developer capable of filling in gaps in a fast moving project
- Business development person with the skills to make ENS ubiquitous with more integrations
- Support person knowledgable and patient enough to help anyone with ENS
- Community manager who can help us better communicate with our great users
We may post more information about this in the future, but if you’d be interested in something listed above shoot us an email at firstname.lastname@example.org to start a conversation.
We’re grateful for the grants we’ve received, particularly at key moments in the history of ENS. Now that we’re in a stronger position, we’d like to pay it forward, with grants supporting the ENS ecosystem and beyond, possibly seeking help from the ENS community about who to support.
We’re still thinking about the best way to do this, so stay tuned.
Feedback, comments, ideas? I’ve posted this on our forum here, feel free to discuss it there.