The Ethereum Name Service (ENS) is a public utility that belongs to the community. Recently, the ENS took a major step in the right direction on their way to becoming a decentralized autonomous organization (DAO) thanks to the distribution of their $ENS tokens to everyone who owned an ENS domain on or before October 31st, 2021.
Before we dive into what the ENS DAO is, let's briefly discuss what a DAO is in general.
A DAO is a decentralized autonomous organization. A DAO’s core consists of open-source code controlled by the organization members, and typically without any kind of management structure or board of directors, as the rules are written into the code.
If a DAO wants to change the code, community members of the DAO could then vote on a new proposition for the code. DAOs can continually improve and grow because the community can submit and vote on new changes to the code. Generally, a DAO will launch with a set number of tokens which may be distributed to the community. Every token is essentially one vote, so the more tokens you have, the more voting power you carry.
This gives tokens a price and utility, and of course allows the DAO to continually innovate with the world.
To further grasp what a DAO is, let's use the vending machine analogy. A vending machine is a machine that has one job, to dispense stuff; however, it still needs humans to operate it. There needs to be someone to check the inventory, someone to order more products, eventually leading to someone who has to stock the machine, and finally someone to collect all the money.
All that being said, if you were to turn a vending machine into a DAO, all the jobs that were done by humans would be done automatically through code instead. So, the vending machine would check its own inventory, send the order to the distribution center, have a robot stock the product, and then the machine would automatically send the currency to the wallet address of the business.
Now that we understand what a DAO is in the macro, we can take a look at the ENS DAO specifically.
The ENS DAO is designed with a delegate model as its base. A delegate model DAO allows voters to elect their representatives as delegates for their constituency. This allows individuals to present their changes to other users, and other users delegate their tokens to support them.
The ENS said that most of the functions of the ENS DAO are operated without supervision from humans, but there are still some problems that need to be addressed by humans—such as the multi-signature contract that controls the DAO’s treasury, future funds, and the registrar contract.
To establish a DAO, users of the ENS domain all received a portion (25 percent) of the governance tokens ($ENS) according to various factors. The airdrop for the $ENS tokens went live November 8, 2021 and are available to claim until May 4, 2022. Another 25 percent of the tokens were distributed to the core ENS team, while the remaining 50 percent was sent to the ENS DAO treasury.
If you owned an ENS domain on or before October 31, 2021 you can learn how to claim your $ENS tokens in this article if you haven’t already claimed them.
The first act of the ENS DAO is for users to vote on the fundamental principles that proposes a series of rules with the goal of teaching users how the ENS should be controlled. The constitution establishes decentralization and integration as the main task of the DAO.
Overall, the ENS DAO is still in the early stages, however, the $ENS token airdrop looks promising as the $ENS token saw over a 180 percent increase from $17.63, to an all time high of $51.
Not only that, Coinbase also made-known their desire to be a delegate for the ENS DAO. This does have some users concerned though, considering Coinbase's size as a company and the roll they would play in this crucial part of Web3 development and decentralization.
ONE37pm will continue to cover the ENS DAO as more information becomes available.
