TL; DR
-
A common pattern is: people hear something → compare it to another (unrelated) thing with the same name → get excited about it → buy it.
-
Vitalik Buterin (aka ETH daddy), named Ethereum name service (often called ‘ENS’) in an interview. Shortly afterwards, a token of the same name skyrocketed in price.
-
Crypto investors started buying up ENS tokens, driving prices up 50% in one day. All without really understanding how the two were connected – because the ENS token is more of a governance tool than an investment asset.
Full story
In the second quarter of 1997, sales of Mars Bars skyrocketed for no apparent reason…
There were no additional marketing spends… no new ad campaigns… but for whatever reason people couldn’t get enough of the nougat covered in chocolate and caramel.
Turns out this was all thanks to the extra coverage of the Mars Pathfinder mission that took place at the same time.
It was all completely subliminal!
People heard something → compared it to another (unrelated) thing with the same name → felt like it → bought it.
All without understanding how the two were connected.
And something similar just happened in the crypto world.
Vitalik Buterin (aka ETH daddy), named Ethereum name service (often called ‘ENS’) in an interview. Shortly afterwards, a token of the same name skyrocketed in price.
It didn’t make sense right away, because even though they have the same names, there are two of them terribly different things.
The Ethereum Name Service is the Web3 equivalent of a domain name service:
You can go online → buy yourname.eth → own that domain on the Ethereum blockchain for a period of time.
But Web3 is decentralized, meaning there is no central company(ies) that manage the purchase/exchange of domain names as there are in Web2.
So who maintains it all? The “Ethereum Name Service (ENS) DAO.”
That’s a confusing (but much more succinct) way of saying, “an organization that anyone can join, that helps manage the Ethereum Name Service protocol.”
This is the point where Ethereum Name Services and ENS tokens intersect…
People can participate in/help manage the Ethereum Name Services protocol, using ENS tokens.
If you own ENS tokens, you can submit proposals to adjust/change the operation of the ENS domain system, cast votes and manage future development…
So when Vitalik said that ENS is “an important part of layer 2 development”…
Crypto investors followed in the footsteps of Mars Bar fans of decades past, buying up ENS tokens and driving prices up 50% in one day.
All without really understanding how the two were connected – because the ENS token is more of a governance tool than an investment asset.
What a fun/weird world we live in.