The mechanism

01

The idea

e0a holds one hundred four-character .eth names. Every buy pays the ENS registrar and gives the next name in line one more year.

A name nobody pays for expires, clears its grace, and returns to everyone.

02

A name is a lease

You never owned an .eth name. ENS registrations are leases. You pay for a term, a year or five, and the term ends. It always ends.

For ninety days after that, the name is in grace. Paying the ordinary fee puts it back as if nothing happened.

When grace runs out, the name is released. For twenty-one days it carries a premium on top of the ordinary fee: one hundred thousand dollars on the first day, halving every day after. Then it belongs to whoever pays first.

03

What a buy does

Your fee lands in the treasury. If the treasury can afford the next renewal, the hook renews on the spot: the name at the head of the ring gets one more year, and the head moves on.

The nearest expiry you were looking at a second ago is now the furthest away.

04

What a sell does

Your fee lands in the treasury like everyone else's. Then the swap releases your slice of what is in there: your share of supply, capped at two percent of the treasury per swap. It reaches you in the same transaction.

Coverage falls. The next term falls due just as soon, with less behind it.

Nothing here is a reward for holding. It is a transfer between the people in the pool, and the registrar takes its cut of it in dollars.

05

The ring

The basket was staggered when it was set. Name one expires 3.65 days after name zero, name two 3.65 days after name one, and so on to name ninety-nine.

Renewals always walk the ring forward by exactly one, and a renewal adds exactly one year. A year is longer than the whole spread of the basket, so the name at the head is always the one closest to expiring.

That is why there is no sorting, no list to scan, and no address that gets to choose.

06

The fee

The fee is a table, not a curve. Five rows, the same for a buy and for a sell. The row depends on the ether leg of the swap.

The largest row is the ceiling: one percent. No address can raise it.

07

Where the fee goes

Every fee, from every swap, in both directions, splits three ways and stops there.

• The renewal reserve pays the registrar. It is the only pocket the renewal reads from.
• The recovery reserve bids for a name that has already been lost, once its premium has fallen far enough to bid at all.
• The keeper bounty refunds whoever pays the gas to renew when no buy carried it. Anyone can be that person. It is a refund, not a salary.

08

The counter

Two numbers sum up the protocol, and both are read from its state.

The first is the time before the next term falls due. There is one renewal every 3.65 days, so it never shows more than that.

The second is how many of the hundred names the treasury covers. The registrar prices in dollars and settles in ether: if ether falls, coverage falls without a single sale.

09

What the hook cannot do

• It cannot make your swap fail. The worst case is that the ledger does not move. It is never that the trade does not happen.
• It cannot sell a name. The contract that holds the hundred names has no transfer function and no approval function. Names leave only by lapsing.
• It cannot choose which name to renew. The ring decides, and the ring was written once.
• It cannot change the fee. Five tiers and a one percent ceiling are constants.
• It cannot pay anyone who is not settling a swap or paying gas for a renewal. There is no other path out of the treasury.
• It cannot be upgraded, paused, or steered. There is no owner and no proxy.

10

The ninety days

If nothing trades, nothing is paid. This is not a risk being managed. It is the shape of the thing.

When the reserve is empty and no swap arrives, the head name reaches the end of its term within 3.65 days, and its ninety days of grace begin. Nothing is lost yet: any buy inside the grace still saves the name.

Between day ninety and day ninety-four of silence, the first name clears grace and is released. Then one more every 3.65 days. On day 455 the basket is empty.

A released name can be bought back in principle. In practice the recovery reserve bids into a premium that starts at one hundred thousand dollars, against everyone who wants a four-character name, and it cannot afford to bid before the sixth or seventh day. Any name worth having is gone by then.

Assume a lost name is lost.

• The registrar sets the price. If ENS raises the fee of a four-character name, coverage shrinks by as much.
• The registrar's address is fixed. If ENS retires that controller, renewals stop and the basket runs out with the grace.
• e0a is unaudited software. Nothing in this guide is advice, and no part of it describes a return.

a few words

The vocabulary

the ring

The fixed order of the hundred names. It never changes, and it alone decides which name is renewed.

the head

The name whose term is closest. Always the next one renewed.

a term

The date an ENS registration ends. The only calendar of the protocol, and it belongs to ENS.

grace

The ninety days after a term during which the name can still be paid at the ordinary fee.

a name-year

One name renewed for one year. The protocol never renews less, and never two at once.

coverage

How many name-years the renewal reserve can pay at today's price. Never more than one hundred.

a keeper

Anyone who triggers a renewal when no buy did. No list, no sign-up, no privilege.