Want to jump straight to the answer? You can buy ENS by purchasing ETH on an exchange like eToro and then swapping it on Uniswap.
While crypto picked up a lot of steam in 2021, many are still hesitant to join the wave. These people are right to be worried considering the crypto downturn in the summer of 2022. The reluctance may be partially from the difficulty of sending cryptocurrencies between accounts, the volatility of the market, that the technology is fairly new or that it can be confusing.
Ethereum Name Service (ENS) is hoping to fix the problem by simplifying transactions on the Ethereum, Bitcoin and Dogecoin blockchains. Review this information to learn how tokens such as this can add value to your portfolio and if this is, in fact, the right investment for you.
What Is ENS Token?
The project hopes to simplify the transaction process by shortening wallet addresses. Wallet addresses are a string of 64 random numbers and letters. Whenever ETH is sent or received, wallet addresses need to be entered to confirm where the ETH is going. The slow entering process can be an issue for those looking to transact as a 64-character address can be tedious to enter in. ENS fixes this holdup by creating a shortened version of wallet addresses.
Instead of a long wallet address, ENS can change a wallet address to “alice.eth” or something short and more customizable than a typical wallet address. This alteration can be extremely beneficial for those looking to transact with friends or make payments. Instead of having to know and enter in the wallet address, users type in the much shorter .eth domain.
ENS uses smart contracts to accomplish its goal. Smart contacts are essentially programs that automate tasks on the blockchain. ENS has a smart contract that stores the list of all .eth domains along with their associated wallet address. When ETH or other ERC-20 tokens are sent to the .eth domain, the funds are automatically rerouted to the wallet address.
ENS also allows for unprecedented customization in the crypto sphere. Users can choose their domain and customize it however they like. They can also feature their favorite non-fungible token (NFT) alongside their domain as their crypto wallet’s profile picture.
Brief History of ENS Token
ENS token was released on Nov. 7, 2021. It soared from less than $15 to over $80 in under 2 days. It also reached a market cap of over $1 billion in this timeframe, 1 of the fastest projects to reach this milestone.
The token was released via an Airdrop, which means that the developers selected a certain number of people to receive the token for free.
The token entered 2022 around $40, but it sank to around $9 in June of 2022.
ENS Token Airdrop
On Oct. 31, 2021, ENS developers recorded all the users who held a .eth domain at the time. This record was then used to determine who received ENS tokens on the airdrop day.
On the day of the airdrop, over $500 million of ENS Tokens were distributed to users for free. The amount each person received was based on several factors, including how long the domain had been registered and the term of registration. However, most users received around 200 to 300 tokens, worth over $10,000. It's worth keeping in mind, however, that crypto airdrops and swaps may be subject to taxation by the IRS.
How to Buy ENS Token
Now that you understand the basics of ENS and its uses, you may be interested in purchasing the token. Because it is so new, it is a bit more difficult to buy than other tokens but should still be fairly easy.
- Open an online account.
The first step to purchasing ENS Token is to open an account on a crypto trading platform. While many trading platforms are available, a few in particular stand out due to their security, ease of use and low fees.
eToro, Coinbase Global Inc. (NASDAQ: COIN), Gemini and Voyager are all great exchanges to open an account on.
Once you have opened an account and entered in some basic personal information, you need to purchase ETH. To do this, fund your account using an ACH or credit transfer. Navigate to the Ethereum profile and purchase the desired amount.
- Buy or download a wallet.
The next step to obtaining ENS Token is to acquire a wallet. You need a wallet to connect to a decentralized exchange (DEX) and swap your ETH for ENS. There are 2 types of wallets: software and hardware. To learn more about cryptocurrency wallets, checkout the best crypto wallets for ENS below.
- Make your purchase.
Once you have ETH on an exchange, send it to your wallet address. If you want to make this process simpler, you can obtain your own ENS domain from its website.
Once the ETH is in your wallet, connect it to Uniswap. Then, select the ETH/ENS pair and enter in the amount of ETH you would like to swap. Execute the trade, and your ENS should arrive in your wallet after a few seconds.
Best Cryptocurrency Wallets For ENS Tokens
Best Hardware Wallet: Ledger
Hardware wallets are physical devices that store the private keys to a crypto wallet. Essentially, crypto cannot be sent without the physical device present. This process is widely regarded as the safest way to store crypto.
Ledger currently offers 2 models: the Nano S and Nano X. The Nano S is designed for beginners and only has necessary features. The Nano X is for more advanced users and offers features such as more storage space.
Best Software Wallet: Coinbase Wallet
Software wallets store private keys online. Most software wallets are either programs or Chrome extensions. Coinbase Wallet is a wallet from Coinbase that allows users access to decentralized finance (DeFi) projects.
If you are looking for an easy and quick way to obtain ENS Token, Coinbase Wallet is probably the way to go. It has a smooth interface and supports hundreds of tokens.
Keep an eye out for celebrities and influencers that begin to use a .eth domain. Their adoption could spark interest in the project and further increase the price.
Trade, Sell or Convert Your ENS Token
To sell your ENS Tokens, you need to convert them back to ETH. To do this, navigate back to the ETH/ENS pair and trade your ENS for ETH. After this, your ETH will be stored in your wallet. You can then send your ETH back to a trading platform and sell it for fiat (USD).
Remember, however, that many investors may choose to HODL their tokens. There is no reason for you trade your tokens if you’re prepared to sit on them. Moreover, you should only buy, sell or trade if you have properly researched the move and believe that you can benefit from an adjustment to your portfolio.
Current Crypto Prices
Apple Inc. (NASDAQ: AAPL)’s CEO recently voiced his support for crypto. Tim Cook said that he owns crypto and is interested in it. This announcement made waves in the crypto community as institutional investors have often been reluctant to invest in crypto.
Apple may open the floodgates for more companies to enter the crypto space. This occurrence would be huge not only for crypto prices but also use cases.
Keep in mind that the crypto meltdown of 2022 may have stunted the prices of certain tokens more than others. While there is no way to know which tokens will be affected most in the longterm, you should account for those changes when making your investments—even if you plan to HODL.
Is ENS Token a Good Investment?
ENS token has already provided strong returns for its investors. It simplifies the transaction process and adds new levels of customization. However, it is not the 1st project to create a domain service. Another downside of ENS is Ethereum transaction fees. Gas fees can often surpass $200 per transaction. This cost makes it extremely inefficient to transact on the Ethereum chain. If ETH2 can lower gas fees, ENS may prove to be a solid investment.
Frequently Asked Question
Questions & Answers
Yes, you can make money trading ENS, but you must properly research and budget for your investments and never invest money you are not prepared to lose as all investments involve risk.
You can trade your ENS tokens if you believe they are not benefiting your portfolio. Complete a full analysis of your situation before placing a market order.
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