Teller, the decentralized lending protocol, has been catching people’s attention once again with its latest offering: ENS loans.
If you’re not familiar with it, ENS, aka the Ethereum Name Service, offers users a convenient way to register and manage human-readable names for their Ethereum addresses. The advantages of linking an ENS domain to your wallet address go beyond simplifying fund transfers. For instance, using a name like 1234.eth is far more user-friendly than dealing with complex and hard-to-remember addresses like 0x229d7F8bf4C915934D6fE7905F8477f18c9a6fE3.eth.
Additionally, users have discovered another advantage by leveraging their ENS names to create digital identities that reflect their personal brand. These identities can carry substantial value in the hands of the right content creators and builders.
ENS has experienced periods of intense interest and increased liquidity, but overall, it has gained a reputation for being highly illiquid. However, Teller’s new service allows users to use their ENS names as collateral to secure loans, opening up new possibilities for leveraging these assets and providing liquidity to those who are seeking it.
How Does Teller Evaluate Domain Names?
The loan offer’s value is determined through a formula that considers several factors, including the primary ENS value, the owner’s social reputation, and the adjusted ENS value. Notably, primary ENS names often receive more substantial loan offers compared to premium ENS names. The reason behind this is that borrowers are more likely to repay their loans when using their primary ENS names as collateral since they are unwilling to risk losing their valuable “brand” name.
This Is The Gwei
Two well-known proponents of ENS, gweiman.eth and fry.eth, recently applied for and successfully obtained loans using their primary ENS names. Each of them received a loan amounting to 3 ETH.
The reaction to gweiman.eth’s loan was interesting. Some onlookers couldn’t comprehend why such a significant value would be attributed to an ENS name that would likely hold little value for anyone other than Gweiman. However, this doesn’t imply that the domain itself is devoid of worth. Rather, it serves as a testament to what Gweiman has accomplished in cultivating and establishing the reputation of that particular name – it is arguably only valuable with him behind it.
Some people are super mad about the teller loan 💀
No I don’t work for them. I leveraged my social credit as an experiment and in the end 3 things happened
-They got free marketing
-I got free engagement
-You got mad
— G.weiman.eth 🔌 (@gweiman_eth) June 16, 2023
Understanding the power of Social Reputation
That got me thinking. I’ve been proudly showcasing my phoenixxdown.eth domain on my Twitter profile for a while now, actively engaging in the Web3 community by writing articles, compiling threads, and making connections. While I didn’t expect a fortune, I couldn’t help but wonder what my domain would be valued at if social standing played a significant role.
Rather than applying for a loan, I decided to check out ENSappraiser.com and entered my primary name. The result came back at a valuation of 2.29 ETH, or just under $4000. Whether it’s my social score, or some other factors involved, I have to admit I was taken aback by the valuation.
Out of further curiosity, I began entering the names of people I know who may not be widely recognized influencers on a large scale, but are actively involved in the space, creating high quality content and receiving significant engagement on Twitter. For example, Ktrap.eth, a well-known figure in the ENS community and other Web3 circles, received a valuation of 4.26 ETH, equivalent to approximately $7400.
In hindsight, these valuations may seem insignificant when a bull market emerges, where follower counts soar alongside market charts, and content creation becomes a daily occurrence.
Teller’s entry into ENS loans is a game-changer in how we value our social reputation, providing an opportunity for users to unlock the value of the digital identities that we curate over time. As the market evolves and brands are built up even bigger, who knows where this could lead.
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