ENS: Why are users shunning .eth registration despite lower gas fees on ETH? 

• Name registration on Ethereum Name Service [ENS] was at its lowest point in 2022.
• Revenue declined severely during the year.

According to on-chain analytics platform Dune Analytics, Ethereum Name Service [ENS] closed 2022 with the lowest monthly count of .eth domain registrations over a 12-month period. 

Domain name purchases on Ethereum Name Service embarked on a steady decline after it logged a monthly high of 437,365 .eth name registrations in September. Since then, the count of monthly registrations dropped by 88%.

Source: Dune Analytics

The steady fall in monthly .eth registrations was an indication of dying interest in domain name services within the web3 ecosystem. 

Read Ethereum Name Service’s [ENS] Price Prediction 2023-2024

ENS domain name purchases are made with Ether [ETH]. As the price of Ether [ETH] declined significantly over the year, the cost of gas fees for transactions on the Ethereum Network also fell. 

One might expect that this would lead to an increase in the number of .eth domain name registrations, as users took advantage of the lower fees. However, doubts about the continued utility of this asset class and rising inflation rates caused users to reduce their spending on domain name registrations.

Source: Messari

More pain for Ethereum Name Service

With 15,683 at press time, monthly primary ENS name registrations closed the year at its lowest level. 

A primary ENS name is a unique, human-readable name that is used to identify and locate a specific Ethereum address. With a primary ENS name, decentralized applications (dAPPs) can find and display such a user’s ENS name when connected to the user’s Ethereum account.

How many ENS can you buy for $1?

On a year-to-date basis, the count of primary ENS registrations made monthly on Ethereum Name Service fell by 42%.

Source: Dune Analytics

As expected, with a reduced demand for .eth names, the protocol closed the year with its lowest revenue in the last 12 months, data from Dune Analytics revealed. Total revenue logged for new registrations and renewals in December was $1. 52 million. This represented a 73% drop in protocol revenue on a YTD basis and an 84% decline from the high of $9.5 million recorded as total revenue in May. 

Source: Dune Analytics

The protocol’s native token ENS did not fare any better. At $10.76 at press time, its value dropped by 72% in 2022, data from CoinMarketCap showed.

Source: CoinMarketCap