ENS DAO Settles US$300K Domain Dispute

ENS DAO settles US$300K dispute for eth.link domain, securing key asset for Ethereum Name Service

Ethereum Name Service (ENS) is a system on the blockchain that functions similarly to the traditional Domain Name System (DNS), which translates domain names into IP addresses for browsers to locate websites. One particular domain, eth.link, became the center of a legal dispute between ENS and Manifold Finance, a decentralized autonomous organization (DAO).

The conflict began when ENS Labs, the developer behind Ethereum Name Service (ENS), filed a lawsuit against Manifold Finance and domain registrars GoDaddy and Dynadot in an Arizona District Court. ENS Labs sought to prevent the transfer of the eth.link domain, which it claimed ownership of. The lawsuit resulted in a court order halting the domain's transfer, securing it under ENS Labs' ownership.

After months of legal battles, a settlement was proposed, which ENS Labs' DAO voted on and approved. ENS considers a US$300k settlement in eth,link legal dispute. This settlement involved ENS Labs paying US$300,000 to Manifold Finance and reimbursing US$750,000 of its legal costs. In return, Manifold Finance agreed to drop the lawsuit, allowing ENS Labs to retain ownership of the eth.link domain.

ENS founder Nick Johnson explained that Manifold Finance's settlement terms included a demand for US$300,000 from ENS Labs, confidentiality, and non-disparagement clauses. Despite the financial implications, the settlement was seen as a way to resolve the long-standing dispute and allow ENS Labs to continue using the eth.link domain.

The eth.link domain is crucial for ENS because it allows .eth ENS-based domains to function. Unlike traditional DNS, which cannot handle .eth domains, ENS relies on the eth.link domain to bridge the compatibility gap and make .eth domains accessible through browsers.

The ownership of eth.link became complicated when Virgil Griffith, an early contributor to ENS, owned the domain but was unable to renew it due to being in jail for trying to help North Korea evade sanctions. This situation led to uncertainty regarding the domain's ownership and its expiration in July 2022.

Despite the legal victory in securing the domain, ENS faced challenges in unlocking it for transfer. Dynadot, one of the domain registrars involved, was ordered by an Arizona District Judge to unlock the eth.link in July 2023 so ENS could transfer its ownership.

Following the resolution of the legal dispute, ENS and GoDaddy, another registrar involved in the saga, reconciled and formed a partnership. This partnership allowed .eth ENS domain holders to link their domains with traditional domains for free, further enhancing the usability and accessibility of ENS domains.

In conclusion, the settlement between ENS and Manifold Finance marks the end of a prolonged legal battle over the eth.link domain. The resolution not only allows ENS to retain ownership of the domain but also highlights the importance of decentralized governance in resolving disputes within the blockchain ecosystem.