The token will enable users of ENS to vote on future proposals and participate in governance through the ENS DAO (decentralised autonomous organisation).
The amount of tokens a user can claim is dependent on three factors:
– How long they’ve owned their ENS domain name
– How long their ENS domain name is registered for
– Whether a ‘reverse record’ is set for the name
$ENS has launched!
Blog or 🧵 for more👇
— ens.eth (@ensdomains) November 9, 2021
Users will have until May 4, 2022 to claim their tokens, after which any remaining tokens will be sent to the DAO treasury.
An ‘ENS domain’ essentially allows a user to ‘shorten’ their alphanumeric wallet address into a ‘domain name’ format and is often used as an ‘identity’ on social media channels like Twitter.
How the DAO works
Users are given the opportunity to ‘delegate’ their governance tokens to another user, who can then use the tokens to vote on decisions made within the DAO.
The structure behind the DAO means that decisions have to be voted on by token holders to pass, creating a decentralised voting process.
According to ENS Domains, the first decisions made by the DAO will involve token holders requesting the ability to “govern protocol parameters, like pricing, the price oracle” and “control funds from the existing community treasury”.
ENS has been praised on Twitter for its approach towards governance and the importance of the platform towards Web3.
The $ENS claims flow will demonstrate the importance of governance.
Most importantly – you don't need to be an expert in DeFi, NFTs or DAOs to receive ownership in a fundamental part of web3.
— Coopahtroopa.eth 🔥ᴗ🔥 (@Cooopahtroopa) November 8, 2021
Others have commented on the capabilities of a decentralised Web3 network, with Twitter user ‘Solarpunklabs‘ saying “how radical it is that in Web3 we will collectively own our own domain name system”.
Cryptocurrency exchange Coinbase also announced it was taking an “active role in the @ensdomains DAO, to support the future of ENS.“
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.