Vitalik Buterin Proposes New Tax On ENS Domain Names, Says It Will Help Ensure Brand Adoption

Zinger Key Points
  • Vitalik Buterin proposes an upgrade to ENS DAO to collect a tax on domain names.
  • The tax would be based on active offers for ENS Domain names, presenting revenue opportunities for the DAO.

ENS domain names have significantly grown in popularity. You’ve probably seen .eth names on Twitter, with more than 100,000 ENS owners now using their domain names in their Twitter profiles.

Unfortunately, many of the address purchases are coming from a concentrated group of investors who look to flip company or celebrity names for profit. But, this could all change.

What Happened: Vitalik Buterin, the co-founder of Ethereum ETH/USD, proposed to charge a 3% annual fee based on the highest bid for a domain name. So if the holder of Drake.eth has a million-dollar bid on the address, the holder must then pay a $30,000 fee annually to maintain ownership over the address. This would motivate more holders to sell the address to those who would actually use it.

It could also potentially benefit the ENS token holders because the funds from these proceeds would make their way back to the DAO. As purchasing domain names are relatively inexpensive, this could become a more consistent and sustainable revenue model.

Why It Matters: While this sounds unfair to investors who have already made good purchases on ENS addresses, it would be a big step in widening adoption.

Hoarding addresses is a practice that has slowed brand adoption. Ethereum transactions would become much simpler if brands, celebrities and nations owned their own domain names.

This 3% annual fee could help move dormant addresses into the hands of big-time players. It also would further decentralize ownership of ENS addresses.

Finally, if the fees were allocated to the DAO treasury, this could be a bullish move for ENS token holders. After all, ENS is a governance token and with more money in the chest, the DAO can explore more opportunities for expansion of the protocol.

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Posted In: CryptocurrencyFintechMarketsTechEthereum Name ServiceVitalik Buterin
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