While overall NFT volume has fallen off a cliff since January, Ethereum Name Service (ENS) domain sales have soared over the past week.
The collection is now the most highly traded Ethereum-based collection on OpenSea, beating the likes of both CryptoPunks and Bored Ape Yacht Club (BAYC). What’s behind the collection’s sudden climb to the top of the marketplace?
According to OpenSea, ENS has generated 876 ETH in sales over the past 24 hours alone, at writing time. At current prices, that’s $1,376,196 in trades.
By comparison, CryptoPunks have only generated 253 ETH in trades, while BAYC has generated 157 ETH in trading volume. ENS now ranks second on OpenSea overall, beaten only by the “yoots mint t00b” collection’s 191,000 SOL ($5,730,000) volume following its minting event on Tuesday.
The weekly volume for ENS stands at 2565 ETH, demonstrating that the bulk of it has been generated over the past two days. Multiple other top NFT collections including BAYC and Moonbirds are down roughly 50% each within that time.
NFTs – short for Non-Fungible Tokens – are unique digital blockchain tokens tradeable over a cryptocurrency network. They can be used to represent other tangible/ non-tangible assets or as independently valued assets all their own.
While the most popular NFTs today are mostly used as speculative collectibles, ENS domains operate slightly differently. While tradeable as NFTs, ENS domains also let owners attach human-readable names to their cryptocurrency addresses.
This can make transactions more convenient and natural to perform, rather than using long strings of numbers and letters to identify another user. Given that each domain is one of a kind, certain domains – especially for popular words – are highly valuable.
OpenSea data says that there are over 510,000 ENS owners.
Part of the rise in ENS volume may be attributable to longer-term trends. The collection is the only top 5 collection by trading volume that’s risen in volume over the past 30 days. August went down as the service’s third highest month of revenue.
Khori Whittaker, the executive director for ENS, told Decrypt that falling ETH prices have likely contributed to this. Prices for registering with ENS are denominated in ETH, meaning the bear market has made registration cheaper in dollar terms.
However, a more recent contributor is likely Merge excitement. Ethereum’s Beacon chain completed its Bellatrix upgrade on Tuesday – the final step before the network moves on to proof of stake. The excitement surrounding the upgrade could have users seeking to mark their territory on Ethereum with a domain name before its too late.
“[Users] registering their personal ENS is a staple for every Web3 user heading into this new chapter of Ethereum’s life,” said Whittaker. “Since our launch we’ve steadily grown in tandem with Ethereum.”
ETH as an asset has considerably outperformed Bitcoin and other cryptos over the past month as excitement builds for the upgrade. Even Ethereum Classic has soared by 28% in its wake, reclaiming its position as a top 20 cryptocurrency.