Compared to the token distributions of Uniswap, Gitcoin, and ENS, what makes ENS special?

Author: Pan Zhixiong, Chain News

As the underlying protocol closest to decentralized identity (DID) in the Ethereum ecosystem, the Ethereum Name Service (ENS) may be one of the few innovative projects that can be compared to Uniswap or Gitcoin. Notably, it has been able to operate continuously without the support of venture capital due to its early choice of a subscription fee model.

Moreover, these three projects share some similar characteristics, such as:

• They have been running for over 3 years without launching tokens in the early stages;

• The role of the tokens is primarily for governance of the protocol itself, and they all support a governance model with agents;

• They all have deep ties with the Ethereum Foundation and are part of the core Ethereum ecosystem;

• The protocols are relatively low-level and have significant composability advantages: Uniswap addresses asset liquidity issues, Gitcoin tackles public goods funding challenges, and ENS provides users with decentralized domains and identities.

Additionally, all three have considered the "decentralization" of the protocol itself, adopting an airdrop mechanism to distribute governance tokens for free to early users. Furthermore, all three projects have allocated over 60% of the total token supply to the community, early users, contributors, or the protocol's treasury (DAO). Although their level of decentralization may not match that of DeFi protocols like Yearn (YFI), which adopt completely fair distribution, these three protocols are still relatively fair, with ENS particularly notable for not having taken any VC investments, thus not distributing tokens to any entities that only provide financial support.

Horizontal Comparison

Overall, among these three protocols, ENS is the one that has been operational the longest and is relatively more decentralized, with a large user base. However, since these three belong to completely different tracks, their financial situations cannot be directly compared.

From a timeline perspective, it can be observed that ENS was the first to launch on the mainnet and the last to issue tokens, taking over 4 years to do so. In contrast, Uniswap appears to have been a bit hasty, possibly pressured by Sushiswap to take countermeasures; otherwise, they might have launched their governance token even later.

In terms of early user numbers, although ENS has only about half the number of users as Uniswap, it can still be considered one of the protocols with the largest user base in the Ethereum ecosystem. Gitcoin, primarily targeting developers and similar groups, certainly has a smaller user scale compared to the other two.

On the other hand, regarding the long-term maintenance of protocol iteration and updates, all three can rely on a substantial amount of native tokens in their treasuries to support protocol development and operational activities. Additionally, Uniswap can depend on potential trading fees (which have not yet been activated), Gitcoin can rely on community donation fees for extra income, while ENS, due to its annual subscription model, became an independently operated entity shortly after being incubated by the Ethereum Foundation, thanks to these revenues.

Token Distribution Comparison

Uniswap

The total supply of UNI tokens is 1 billion, which will unlock over 4 years at an inflation rate of 2% per year. The initial distribution method is:

• 60% allocated to the Uniswap community and users (15% of the total was retroactively airdropped and liquidity mining was conducted)

• 21.266% allocated to employees, unlocking over 4 years

• 18.044% allocated to investment institutions, unlocking over 4 years

• 0.69% allocated to advisors, unlocking over 4 years

Details: link

Gitcoin

The total supply of GTC is 100 million, with the initial distribution method being:

• 15% retroactive airdrop

• 50% to Gitcoin DAO, unlocking linearly over two years

• 35% to existing stakeholders, including employees, investors, partners, etc., unlocking linearly over two years

Details: link

ENS

The total supply of ENS tokens is 100 million, with the initial distribution method being:

• 25% airdropped to .ETH holders

• 25% allocated to ENS contributors

• 50% allocated to the DAO treasury

Details: link

How Important is Decentralization to ENS?

When the ENS team decided to launch the ENS token, they summarized their reasoning with a phrase:

ENS has always been an open public facility belonging to the community. The core aspect of ENS is its decentralization and self-operation (for example, no one can take another person's ENS name), but there are also some matters that require human intervention for adjudication.

Because ENS is one of the few projects in the Web3 protocol stack that can generate continuous revenue, they have the confidence not to seek any financial support from investment institutions. This characteristic is particularly valuable for a decentralized infrastructure component.

However, this does not mean that selling tokens to VCs is necessarily the worst choice; after all, many innovations have been realized with their help, such as the V3 version designed in collaboration with Paradigm and Uniswap, which significantly improved the capital efficiency of AMMs.

But if we really have to compare, ENS is a more fundamental public facility than Uniswap, as "trading" can be considered an application-layer matter, while ENS is a prototype for building a blockchain-based identity system. For such a protocol, the degree of "decentralization" determines how high its ceiling can be.