ENS Token ($ENS) - why would you even buy that?

Let’s take a look at ENS Token and why it’s a waste of money buying it.

Starting with Tokenomics.

Current Circulating Supply is 25,783,233 out of 100,000,000 (Total Supply)

The main purpose for this token is to govern the ENS DAO. Economically there’s no incentive for this token to appreciate. Now by taking a look at the holders statistics:

We can see there’s about 64k addresses that govern the whole process. It’s heavily skewed towards top holders although we have to disregard the top holding addresses majority, ~75%, of the token is still undistributed.

But few holders still hold the most. On top of that, the protocol has grown

There’s about 676k unique participants now. That is x10 the amount of ENS token holders. And when the token drop happened there was about ~137k holders eligible but only 100k claimed their share.

Using duneanalytics again, we can check to see that the majority of the users have gotten around 200ish tokens, which is an equivalent of spending $2714 to get those today, and more active users have gotten around 500, $6785 as of today.

However, as the protocol’s base has grown exponentially after the airdrop, the governance is still held in the hands of minority. Remember, only 1/10th of ENS domains owners have ENS tokens and then top 100 holders hold the 90%. Fortunately, the delegation of tokens to representatives helps to give some power to people with less tokens but nowadays it’s nothing more than just an illusion of power.

Take this one of the recent proposals that has passed. It had a total of 2.34M votes casted. And as we can see from the picture above, we are getting into a territory of parties, still mostly delegates, that has only around 10k tokens.

That’s only about 0.01% of voting power for…$135700

And while with the raise of new domain owners, that has happened after the airdrop, we do have more new people who care about ENS, build tools and want to get involved more maybe simply through the governance process.

In reality, buying ENS tokens, as it’s often suggested as a direct and tangible way of make a change, not only is not going to create any change, it’s a very likely waste of hard earned money for new users.

Going forward I’m hoping the users that are coming in the cycles as the protocol keeps growing exponentially will be eligible for next waves of airdrops that are proportionate to the users. For example, an average of 15-20 tokens to the new 550k of unique addresses since the last airdrop. That comes out to about 11M of tokens (550k*20), which is about 43% of the current circulated supply. And while it’s probably not going to be done, there needs to be some new step for new users to have an option to be involved in the governance in a way that’s more fair and doesn’t require spending insane amounts of money for nothing.

How it’s all going to unfold - noone knows. Maybe it’s too early to tell and yet, I’m curiously going to be watching how the governance process of the ENS DAO changes as it faces new challenges.

As of right now, your money would be better off than buying this useless for you token.