A Decaying Price Premium for Newly Released .ETH Names
A steady stream of people have been renewing ENS names in the last few months. We had a “renewal rush” in May since the expiring date was May 4th, 2020.
We are currently in the final month of the 90 day “grace period” in which the owner can no longer transfer the name and modify records but can still renew the name to regain the control. But come August 2nd, names that haven’t been renewed will be released for other people to register. And the number of names that are set to be released right now is quite high, around 280,000.
There are people who have been waiting for this moment for a long time. Some people want to claim the name they couldn’t get beforehand to make a great use of it, but there are people aiming to snatch good names to squat on (you can read my prior blog post introducing some of the “high value” names set to be released).
As you are aware, Ethereum gas prices have been very high for the last few months, and the last thing we want to do is to exacerbate the problem with people competing with higher and higher gas prices to get newly released names all at once (aka a “gas auction”). Since March we have been discussing a more granular way to release these names with a decaying price premium, and we have finally released the new mechanism.
Decaying price premium
The premium beyond the normal registration price for the name starts at $2,000 USD the moment the name becomes available and decreases linearly to $0 over a period of 28 days ($71 decrease a day). So after 28 days the cost to register is the normal price (e.g. $5/year for most names).
Based on our stats from the short name auction, $2,000 is greater than the price that 99% of names went for, so it should prevent all but a few names from being sniped via high gas prices the moment they expire. That combined with the 28 day period should give people plenty of time to obtain the name at the price they believe it’s worthwhile to them. If you’d like to obtain a newly released name without any premium added to the registration price, simply wait out the 28 days after the name is released.
The way to register these names is exactly same as how you register names normally. Go to app.ens.domains and search for the name you are interested in. It’ll show the current premium which you can see in the line chart below.
If you find the current premium too expensive, type the amount of premium you are willing to pay in the “Premium” field or click on the price chart, and it will show you when you will need to come back and register it. Clicking “Remind me” will allow you to add the date to your calendar so you won’t miss it.
This decaying premium will apply to any name which expires in the future (this is not a one-off event). We acknowledge that the premium could impose an extra hurdle to some users. We will monitor how this decaying premium will work and may adjust it in the future.