How To Unlock Better Safe Management Practices With ENS
“Man, I really love memorizing my wallet address whenever I set up a new wallet,” says No One Ever.
Despite the recent downturn in markets worldwide, interest in cryptocurrencies, non-fungible tokens (NFTs), and web3 technology has been growing. Decrypt reports the number of ETH addresses holding more than 0.1 ETH has increased by more than 50% over the past two years, and all this despite the mind-numbingly extensive series of alpha-numeric characters that make up a wallet address.
It’s a warm sunny day, and No One Ever sits beneath an awning, sporting a pair of crimson-tinted reading glasses and a black shirt with the phrase “Yuck Fou” splashed across the front in bold white lettering.
“It takes commitment to be this focused on the up and coming technology,” No One Ever continues, taking a drag on their custom vape, reminiscent of the popular contraptions of the early 2000s. “You really have to want to be here. Only posers use copy paste.”
Except copy paste is a godsend when considering the length of these addresses. For example, Ethereum’s blockchain explorer Etherscan reports that:
“An Ethereum address is a 42-character hexadecimal address derived from the last 20 bytes of the public key controlling the account with 0x appended in front e.g. 0x71C7656EC7ab88b098defB751B7401B5f6d8976F.
The Ethereum address is the ‘public’ address that you would need to receive funds from another party.”
Other blockchains, such as Bitcoin and Cosmos, use complicated algorithms to determine the address of a new wallet, resulting in addresses with alpha-numeric strings of varying length, all of which would be an absolute nightmare to memorize.
If being a true cypherpunk requires memorizing these lengthy strings, we’d all be posers.
While web3 technology is improving, the protocols underlying address generation aren’t changing. If anything, in an effort to combat malevolent users who continue to grow more skillful and savvy, they’re becoming more complicated. As a result, the likelihood of ever being able to generate a simple and secure 10-digit address that’s easy to memorize is extremely unlikely.
Because of the cumbersome nature of cryptographic public wallet addresses, a number of protocols have sprung up to ease the use of these unwieldy strings. Services like Ethereum Name Service (ENS), Unstoppable Domains, EmerDNS, and Handshake all offer naming solutions that enable one name, like nonsensetwice.eth (on ENS), to resolve to wallet addresses on multiple blockchains. These protocols offer a wealth of features that greatly contribute to the web3 ecosystem.
Considering the prevalence of DAOs and how web3 is changing the way organizations operate, the complexities of treasury management by way of a community-owned wallet increase. While other services may offer support for these community wallets, these shared “Safes,” ENS is an excellent example of a protocol that provides multiple use cases, easing the burden of community wallet management by way of one domain NFT.
The Utility of ENS for Organizations
“Listen. I’ll tell you what matters: DOGE, SHIBA, and the latest pump. No one cares about utility,” says No One Ever, as they raise their cup of French-pressed black coffee to their lips. It’s clear by their expression they have arrived at the coffee dregs. They set down their cup, stating, “we don’t need easy; we need to find that next pump.”
While there are blockchain users whose sole focus lies in betting on the market and using arbitrage to manipulate gains, most of the participants in the web3 ecosystem operate out of a desire to democratize work and finance. Anyone spending any amount of time in a DAO can attest that the process of democratizing work is no simple matter. Among the many challenges brought on by decentralized management are concerns around multi-signature safe operations (herafter, a multi-signature safe will simply be referred to as “Safe”). This can be further complicated by smaller units operating autonomously within the larger structure of the DAO, each with their own Safes. ENS provides utilities that help ease some of the management concerns surrounding these often complex structures.
The ENS NFT
Despite continued controversy surrounding NFTs, the fact remains that nothing else in the digital realm solidifies ownership of an item better than this particular technology. As I describe in Is Good Art Worth Minting on a Bad Blockchain:
Metadata, artwork, and collectibles may change, but ultimately, the NFT itself represents the hash on a blockchain and ties that hash to the user that has created, minted, or purchased it. Holding an NFT, then, implies ownership of whatever that hash enables within the context of the blockchain ecosystem in which it is minted.
- Nonsense (Decentralized Arts New)
Accessing ENS utility begins at the very root of the product: the NFT that is minted when an ENS domain is registered. The wallet that registers the .eth domain mints the ENS NFT and is the wallet under which the domain is stored and controlled. Like most NFTs, these can be transferred, traded, bought, and sold on secondary markets.
“I love paying high gas fees,” says No One Ever, in response to a question regarding blockchain efficiency. Giving up on their dead vape, they light up a cigarette, inhale deeply, and proceed to cough for a solid two minutes. “There was a time when fees were so high,” they say between fits of coughing, “that people were burning 8 ETH just to mint a goddamned NFT. Those were the days.”
Given the considerable cost in gas fees associated with Safe transactions, it is often more efficient for a member of an on-chain organization to register a domain through their individual wallet and transfer the resulting NFT to the organization’s Safe, thereby saving on gas fees and relinquishing ownership to the organization. Furthermore, by transferring an NFT to a Safe, the primary ENS can be set for the Safe.
It’s important to note that ENS, as suggested by the name, primarily operates on Ethereum. The NFT is minted and managed on Mainnet. Due to ENS’ multi-chain support, if an organization operates on a different blockchain, it is advisable for the organization to maintain a Safe on Ethereum to own and manage the domain registered with ENS. While addresses to which the ENS domain resolves can exist on any supported blockchain, pointing the ENS domain to those addresses is managed either through the Safe on Ethereum, or by its Controller.
Registrant and Controller? Who wears the pants in this relationship?
The ENS dashboard provides several options for managing the details attached to the registered domain. The Registrant is the address in which the NFT is stored. The Registrant not only owns the domain, but has all the permissions for adding and editing records; adding, editing, and removing subdomains; and transferring, trading, or selling the domain.
When an NFT is moved into a Safe, the Safe owners are responsible for reviewing and approving any changes made to records attached to the domain. This means that for every change that needs to be enacted over the domain, a transaction is created in the Safe and the requisite number of signers must approve the transaction for the changes to be implemented. This can be cumbersome, depending on the frequency of changes that may occur over the course of an organization’s operations.
This is where the Controller comes in. The Controller is an address to which the Registrant has delegated all management operations with the exception of transferring, trading, or selling the domain. The Controller can be the personal wallet of an individual in the organization, or the Safe of a sibling or parent organization. Ideally, this is delegated to a trusted individual, and changes are managed through the ENS dashboard via the individual’s connected wallet. When records and subdomains need to be added, updated, or removed, the Controller can execute them without the necessity of initiating a transaction through the Safe.
Send me ETH. Or DAI. IDGAF.
“Community funds? Nah nah nah. None of this multi-sig shit. Just use a community wallet. Just gotta trust the goon holding the keys not to run off. Easy,” says No One Ever. Having discarded the cigarette in favor of more coffee, they rise. “Gotta get a refill. Bee-are-bee.”
With the proliferation of subDAOs, managing a network of autonomous entities within an organization becomes challenging. To paraphrase one BanklessDAO member, a subDAO can be defined simply as a “category in a Discord server and a multi-sig.” Depending on the size of the organization, this could mean a lot of subDAOs, each with a lengthy and complicated address to keep track of. One solution could be that each subDAO registers and manages their own ENS through their respective Safes, but ENS provides a more elegant solution: subdomains.
With subdomains, a DAO can register a domain through ENS, set all the requisite details for the main treasury, select a Controller, and proceed to create and distribute subdomains to autonomous entities operating within the larger organization. This could look like:
Each subdomain has an option for a Controller separate from the one managing the parent domain:
Who actually WANTS this kind of responsibility?
This allows subDAOs to add, edit, and remove records for the subdomains without having to request changes from the parent’s Controller. SubDAOs can point subdomains to their respective socials and Safe addresses without interfering with treasury operations of the larger organization. While simple, this is an often overlooked and severely underrated feature.
ENS, In Continuum, Ad Nauseam
“Alright, I’m heading out. Gonna drop 2 ETH on a picture of the moon someone minted on OpenSea. Pretty sure it’s just a copy of an image on Unsplash, but I want it in my wallet,” says No One Ever as they return with their freshly brewed coffee. “I’d say it’s been a blast, but all this talk about utility is really boring. Catch ya later.”
Not everyone is going to find these features exciting, or even useful. But for those who have been working in the trenches of web3 for a while, the utility provided by ENS NFTs may ease some of the effort around Safe management.
While this article covers ENS for organizational use, individuals shouldn’t shy away from taking advantage of ENS functionality for their own pursuits. A creator running a series of projects may opt to manage the income separately from each project by way of subdomains and independent Safes. Or a creator may purchase a number of ENS domains, set themselves as Controller for each of them, and distribute them to their respective Safes. With a handful of features, there are innumerable possibilities. With this information at your fingertips, how will you utilize ENS in your organization? In your personal endeavors? Feel free to drop your comments below.
nonsensetwice is a writer, editor, developer, and fitness professional. A member of, and contributor to, BanklessDAO since its inception, nonsense’s main drive to contribution is the development and growth of contributors in web3, particularly in the realm of governance. When he’s not engaged in DAO work or kicking clients’ asses with yoga, nonsense can be found playing Borderlands, producing work for his L V N A C Y project, or shitposting on social media. Follow the bastard at nonsensetwice and nonsensecodes on Twitter.
Hiro Kennelly is a writer, editor, and coordinator at BanklessDAO and the Editor-in-Chief at Good Morning News. He is also helping to build a grants-focused organization at DAOpunks.
Trewkat is a writer and editor at BanklessDAO. She’s interested in learning as much as possible about crypto and NFTs, with a particular focus on how best to communicate this knowledge to others.
BanklessDAO is an education and media engine dedicated to helping individuals achieve financial independence.
This post does not contain financial advice, only educational information. By reading this article, you agree and affirm the above, as well as that you are not being solicited to make a financial decision, and that you in no way are receiving any fiduciary projection, promise, or tacit inference of your ability to achieve financial gains.
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