Vitalik Buterin has released an article on ENS name registration costs and strategies for long-term namespace sustainability. It raises several very important issues and departs from the straightforward Harberger Tax model in favor of a more complex one that takes into consideration some key requirements of decentralized naming systems, such as the requirement for stability in how a name resolves. Let’s delve on a few issues and design limitations that should be addressed in any proposal to alter how ENS names are priced.
Name Categories
The “right” owner for a name is frequently the subject of proposals, bt there are different applications of names:
The first category is on people’s names like nick.eth or vitalik.eth are examples of names that are used to identify a person. A given name is typically available to a large number of people, yet I believe there are more Nicks than Vitaliks in the world.
Company names come second. These are names that, for our purposes, denote a brand or a product but have no other significance. Think about names like Google.eth, Facebook.eth, or Microsoft.eth as examples; names like Twitter.eth or Chevron.eth are less appropriate because they’re also…
Thirdly, there’s the term Category. Names like bookings.eth, wallet.eth, or god.eth, where the owner is not immediately apparent
Name brands. For our purposes, they are names that signify a company or a product but have no other significance. Google.eth, Facebook.eth, or Microsoft.eth are a few examples; names like Twitter.eth or Chevron.eth are less common because they are also…
Generalized Terms names without a clear owner, or even characteristics that would a priori distinguish one owner from another, such bookings.eth, wallet.eth, or god.eth.
Externalities
The implications that exist in a name system are another aspect that is frequently not given enough consideration. Let’s say Bob Wallet buys bobwallet.eth and offers its users free subdomains. Ledger values having bobwallet.eth because of their reputation and the damage losing it would cause, but because they receive no income from it, they might not be able to afford a high rent.
A hostile actor who purchases the domain from under Bob Wallet may end up misdirecting money paid to any Bob Wallet user*, incurring expenses that are carried by the users rather than the developers. In addition, the majority of the costs associated with losing the name fall on their customers.
Harberger Registers
A Harberger tax plan would be used to compensate for 1- and 2-character names. The DAO receives a rent payment from the existing owner that is proportional to the value they place on the name (let’s say 1% PA), and anyone is free to purchase them at any moment.
However, the name is set up so that the parent domain cannot transfer ownership of the name and that all subdomains must be wrapped in the name wrapper.
Ethereum Name Service and GoDaddy Dispute
The Ethereum Name Service (ENScreator, )’s True Names Ltd, has sued GoDaddy, a well-known domain registrar and ENS’s rival in the space. A web domain that belonged to ENS in the past is at the center of the litigation.
According to the complaint made by True Names Ltd., GoDaddy incorrectly declared the eth.link domain to be expired and as a result, sold it to a third party.
Source: https://crypto.news/vitalik-shares-ideas-regarding-the-restructuring-of-ens-fees/