ENS resolves legal battle with Manifold Finance over eth.link domain through $300k settlement

The Ethereum Name Service (ENS) developer is set to conclude its legal dispute with Manifold Finance over the eth.link domain following the approval of a $300,000 settlement by its decentralized autonomous organization (DAO).

The DAO vote, which concluded on Feb. 26, saw an overwhelming majority of approximately 88% in favor of the agreement. This settlement involves ENS Labs discontinuing its lawsuit and compensating Manifold Finance with $300,000 while retaining the rights to the domain name.

Additionally, the settlement received support from 84% of the voters for a $750,000 reimbursement to cover ENS Labs’ legal fees.

This agreement puts an end to an 18-month-long legal battle that began when ENS Labs filed lawsuits against Manifold, along with domain registrars GoDaddy and Dynadot, in an Arizona District Court. The court ruled in favor of ENS Labs, issuing an injunction that prevented the eth.link domain from being transferred out of their ownership.

ENS founder Nick Johnson, in a forum post on the ENS DAO site dated Feb. 13, detailed that Manifold’s settlement proposition demanded $300,000 from ENS Labs, in addition to imposing confidentiality and non-disparagement clauses. In return, Manifold offered to settle all disputes, which would lead to the lawsuit’s dismissal and allow ENS Labs to maintain ownership of the eth.link domain.

Ethereum Name Service (ENS) is a system that assigns human-readable names to Ethereum wallet addresses, which are typically lengthy and complex.

The eth.link domain plays a vital role as a bridge, allowing ENS domains—which are not recognized by the conventional Domain Name System (DNS)—to be accessible through traditional web browsers. This is achieved via EthDNS and EthLink functionalities, which enable standard internet protocols to access blockchain-based data and facilitate the resolution of .eth domains in traditional web browsers.

By appending .link to an ENS domain, users can access content associated with ENS addresses through conventional DNS pathways, making ENS domains function similarly to standard internet addresses.

The contention over the eth.link domain began when it expired in July 2022, as Virgil Griffith, a former Ethereum developer and early contributor who owned the domain, was unable to renew it due to his imprisonment for trying to help North Korea evade sanctions.

GoDaddy, the registrar where eth.link was initially registered, allowed the domain to expire, which led Manifold to acquire it at an auction on Dynadot in September 2022.

Following this, ENS Labs took legal action against the parties involved and secured a court order to halt the domain’s transfer after the defendants failed to attend the court hearing.

The legal wrangling continued until July 2023, when Arizona District Judge John Tuchi ruled in favor of ENS, ordering Dynadot to unlock eth.link for ENS to transfer its ownership. In the aftermath, ENS and GoDaddy have reconciled and partnered to offer .eth ENS domain holders the option to link their domains with traditional domains for free.

Meanwhile, Nick Johnson has expressed concerns over Unstoppable Domains’ patent applications related to blockchain domain names.

In an open letter from November last year, Johnson accused Unstoppable Domains of leveraging ENS’s open-source developments for their patents, a move that contradicts the ethos of open innovation that ENS upholds.

He highlighted that one specific patent granted to Unstoppable Domains is based on ENS’s innovations without introducing new concepts, signaling ongoing debates around the propriety and innovation in the blockchain domain space.