Why this $9 NFT has collectors going ALL IN (ENS bull run)

Collectors are going crazy for ENS NFTs right now, with some spending as much as 300 ETH for a single 3 digit address. Can this last?

In this video I go over the bull and bear case for ENS NFTs, why they seem to be pumping all of the sudden, and whether collectors are prepared to hold these NFTs long enough for the bet to be worth it.

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0:00 start here
1:39 how Page Howe made millions
3:52 ENS 101
4:50 the BULL CASE for ENS
6:41 passive income from your ENS?
7:12 hype train: 3 digits and 4 digits
8:56 the RISKS
9:37 how long this bet will take
12:17 my thoughts

tags: BAYC, cryptopunks, azuki, doodles, crypto

Hey guys so a couple of months ago i saw This tweet by d farmer who is a Well-known nft collector where he made An offer to anyone willing to sell him Three-digit ens numbers for less than Three eth and if you don’t know what ens Is we are gonna get into that but for Now we can just say that it’s like a Personal domain name that you attach to Your ethereum wallet so instead of Having this super long string of numbers Like this you can get something maybe a Little more cool and professional like This there’s actually a lot more to it Than that but we are going to get there In a minute and so d farmer was hoping To buy any ens name with three digits so 209 405 300 and if you do some quick Math you’ll see that there are exactly 900 of these going from 100 to 999 and Ladies and gentlemen just two months Later the floor on these three-digit ens Domains is now over 35 eth or 35 000 and The three-digit addresses aren’t the Only ones that are popping off right it Actually gets weirder than this looking At the charts you can see that the floor For four digit e s names is two eth and Even the floor for arabic three digits Is five eth along with a bunch of other Languages and all in ens made up nearly Twenty percent of all open c volume on July third and now we’re entering a new Phase where hype seems to be

Accelerating and nft collectors are Widening their search for these Undiscovered gems and minting new ones Like crazy given that you can often now Get one for less than ten dollars Because of how low gas has been on Ethereum lately so i think it’s time we Take a closer look at this ens hype Train okay so today we’re going to talk About the best case scenario for these As well as how you can actually make Passive income with ens names and then At the end i’m going to try to poke some Holes in the narrative to see if the Logic behind all this actually makes Sense now if you’ve been a long time User of the world wide web then you Might be hearing all this and saying hmm Where have i seen this all before well You’re not going insane right we did see Something like this about 20 years ago When people were flipping and day Trading in web 2 domain names you know The ones at anden.com and people were Actually making silly amounts of money With that for example here’s a crazy Story look at this face you might not Recognize this guy but his name is paige Howe and he might be the most famous Domain mogul now back in the late 90s Paige was both a card collector as well As an investor mainly in tech companies And if you know your history well then You know that the tech bubble popped in

2000 it wiped many people out including Paige who nearly lost everything most of His investments went to zero and he even Had to put his 200 000 card collection Up for sale just to keep things afloat Well luckily paige got a second chance Because as part of his investing he Became familiar with domain buying which Had become popular around that time and It wasn’t an instant success okay paige Actually lost like another 50 grand Buying these like dot kids domains or Whatever things that ended up completely Flopping but then he started to focus on Those juicy.com domains and he ramped up His knowledge and started to scout these Leftover names that nobody really seemed To want and here you can actually see Paige looking dapper in his best sunday Hat probably buying some banger domains Now eventually after he leveled up a bit He decided to make an insane all-in play When he bought seniors.com for 100 Thousand dollars he bought it from Another flipper who was selling it on Ebay and then he managed to flip it Himself a few years later for 1.8 Million dollars later on he managed yet Another score when he bought guy.com Again from a flipper for low six figures And then just months later ended up Selling that one for one million dollars And by the way if you just look at these Domains right now i mean first off

Seniors.com doesn’t even seem to work It’s just a dead link and guy.com links You to this like men’s lifestyle blog With all these broken jpegs that haven’t Been updated in years so i don’t know i Think our boy page got the better end of The deal but of course paige wasn’t the Only one doing well flipping domain Names and in fact today there have been Over 20 domains that have sold between 5 And 50 million dollars as well as a ton Of other ones that have been flipped for Six figures okay now let’s pivot into Ens because as you’ll see there are a Lot of similarities between the two Trends now for those that aren’t aware Ens stands for ethereum name service and Instead of me just giving you a Definition that i just made up let’s Look at how the organization describes Ens themselves so here we see Decentralized naming for wallets Websites and more so you see they have An app you register a name that ends in Dot eth you receive an nft and you can Keep using it as long as you keep Renewing and according to them this is Your web3 username so you own your Username store an avatar and other Profile data and use it across services Now the main ways that people are buying These are either by minting fresh ones From the ens app or picking existing Names from openc or even using an app

Like ens.vision to track expiring names That were registered in the past this Kind of makes sense right it’s an nft That forms a part of your identity and There is also some utility to it but That still doesn’t explain why people Are spending 25 eth or in some cases Hundreds of eth for a three-digit name Like zero zero zero dot e and for that We have to look at the bowl case for ens Okay what actually needs to happen for All of this to work out well there are a Few things so first you need a future Where web3 ends up being a much bigger Deal than it is now so nfts dao d5 token Based app all of this has to work and Work well enough for this to go Completely mainstream number two you Need ethereum to remain a prominent Chain within web3 so for this to happen You need the decentralized vision of web 3 to win out and so we’re not living in Some metaverse that’s owned by jeff Bezos or something and then within that Vision you need ethereum to be the Category winner in other words what We’re saying is that the collectors here Are betting that the adjustable market For ethereum is going to go from the Tiny group that we have today to Potentially hundreds of millions or Billions of users in the future and Third you need ens to continue to be the Main username or passport system that

Ethereum users refer to so you’re hoping That ens beats out competitors like Unstoppable domains which allows you to Buy names like dot crypto or dot bitcoin In this case without renewal fees if all These things happen then you end up in a World where ens is as important in People’s lives as com domains were in Web 2. and if you’re talking to an ens Maxi they’re probably going to say that It’ll be even more important for example Recently instagram started to integrate Ethereum and polygon entities directly Into the app itself and we know that Youtube is going to join in sometime Soon as well so it’s not inconceivable To imagine a future where a ton of apps Decide to let you log in using your ens Instead of a handle that is only Specific to that app in that scenario You could potentially log into every Social media using your ens and have Them all connect to each other we also Know that decentralized websites are Coming as well so basically your ens Name could link out to any other content Or business that you’re a part of not Just a decentralized website but also Web 2 sites like a youtube channel or A com domain and there’s also one more Big advantage that ens names have over The classic domain names of web 2.0 and That’s the ability to generate passive Income and the way this works is with

Subdomains that you can sell as nfts so For example you could have an ens called Money.eth and you can sell people sub Domains like John.money.eth or giveme.money.e And over time you can actually build up A brand around your domain name and Potentially turn it into a subscription Business that is paying you dividends Now that’s the argument for ens Specifically but what about those damn Numbers okay how do we explain that well It comes down to the same recurring Themes that we’ve been talking about With nfts okay online identity and Scarcity the fact of the matter is that We live in a world where people spend a Lot of money on rare items that can be Considered a social flex or a signal of Some kind one example used by ens maxies Is the fact that you know people in Other countries over the years have paid Ridiculous amounts of money for specific License plates like in the case of the British guy who paid a hundred thousand Dollars for a plate with a number 25-0 Or this man from abu dhabi who paid 14 Million dollars for a plate with just One single digit number one and when They asked him why he thought that plate Was worth millions of dollars he replied I bought it because it’s the best number I bought it because i want to be the Best in the world all right now let’s

Not judge right i’m sure we’ve all Bought things in the past to feel cool He just happens to be willing to spend a Lot more money than us to prove that the Other part of the argument here is the Scarcity aspect and if you look at Collectibles of all kinds one common Thread is that serial numbers tend to be A source of value and usually the lower The number the more valuable so the bold Case goes that in a world where there Are billions of users having say 11.8 is Going to be a much bigger deal than it Is today because that signals that you Were either very early to this Technology or you were very rich or rich Enough to be able to buy it off of Somebody who was early and just like Your profile pic the ens can get a lot Of impressions if we look at g-money he Has two on-chain parts of his Public-facing identity he has his punk As well as g-money.e and you can say That there are only ten thousand punks But there are also only ten thousand ens Numbers under ten thousand okay i’m not Saying it’s exactly the same thing i’m Just saying this is kind of the argument Okay so now it’s time to talk about some Of the risks and see if we can poke some Holes in the logic the main risks are Kind of obvious right we just take all The things that we said have to happen For this to work out and we just take

The inverse of that and try to determine The probability so maybe web 3 ends up Not being a big deal maybe ethereum is Not the top chain in the future and Maybe ens isn’t as relevant on ethereum For whatever reason you know maybe There’s another top competitor that Steals market share or maybe people Don’t want to be identified with their Wallet you know funny enough i consider Myself a web 3 power user but i don’t Use an e s personally because i don’t Want to be broadcasting my wallet Publicly all the time everywhere so i Just don’t think it’s a given that the Average person is gonna want to be Associated with their wallet but anyways What’s the probability of all that who Knows but the main question here is how Long are you willing to wait to find out And here’s the main thing i want to get Across because it happens a lot in Crypto okay people fall in love with These long-term beautiful narratives and Then they confuse that with short-term Trading and if you don’t know which one You’re buying into that’s when you can Get burned in this case if you do Believe the long-term story that Ethereum is going to have all this Demand pressure in the future you still Have to understand that you’re probably Locking yourself into a multi-year bet Because today we don’t have that demand

At all right and what you’re seeing Right now all this activity is just Speculators selling to other speculators And if you think about the story of Paige howe one more time you know he Bought guy.com for six figures back in 2003. that’s a lot of money but if you Think about the internet 2003 it was a Much different world than what web 3 is Today we can see here that back then There were over 600 million people Already using the internet and Businesses like amazon were already Generating billions of dollars a year From online sales compare this to nfts Which are the most popular use case on Ethereum and we’re talking about maybe Half a million monthly active users and So you’re way earlier on the adoption Curve which means there’s higher risk in Trying to predict how any of this plays Out beyond that i think there’s a second Reason why all this ens stuff is blowing Up right now and that’s because the nft Space is in this weird period in between You know season one and whatever we’re Gonna get from season two and the metas Like profile pics and play to earn have Been wiped out and people aren’t really Sure which projects have staying power But most people still have conviction That nfts and web3 as a whole are going To continue growing and so they’re Looking for safer ways to make bets on

That thesis alone instead of betting on These individual projects that are going To come and go and from that angle ens Does feel like a safer bet than Something like a doodles or a moon birds Where the future value is dependent on a Single team or on a roadmap that may or May not work but i have a feeling that a Lot of these buyers are looking for that Same short-term flipping potential that We saw in profile picks and they might Not realize how illiquid a random Four-digit korean number is gonna be Once all of this hype dies down the Other big difference with classic domain Names is that in web 2 the biggest sales Were always linked to companies that had These huge marketing budgets and mainly What they wanted was a name that was Very easy to remember and had great seo In the case of ens numbers specifically It’s hard to see why companies are going To care about a random number and in Fact you know we rarely see numbers in Web 2 domains so really you’re just Selling to individuals specifically Wealthy individuals who care to flex Through something like ens and you can Argue that has less upside than focusing On companies that have these huge Marketing budgets and balance sheets Personally i have no idea how this is Going to play out okay you can argue for Sure that some memorable names and short

Words are going to perform really well Maybe like Fire.ethersteven.eth and on the number Side i’m sure some numbers will Eventually get to that seven-figure Range you know maybe double07.eth or 1.e If you you know convince that guy from Abu dhabi but in general as is usually The case you can assume that most of Them are not going to be worth much or At least less than what people seem to Be expecting right now either way this Is going to take years to play out Because you now have to wait for the User growth to catch up to these Valuations and especially if we enter a Bear market that could take a couple Years with low attention on web 3. so my One piece of non-financial advice is That if you are going to buy in just Make sure you know whether you’re in it For the long-term hold or if you’re Looking for a one-month flip because i Do think there’s gonna be a rocky path In between all right guys that’s it for Today thanks for watching and i’ll catch You the next video

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