HOW ENS GRACE WORKS
When you register @ENSdomains you get whatever amount of time you register them for PLUS 3 months of a thing called GRACE But what’s GRACE? GRACE could’ve as well been called PRE-EXPIRATION PERIOD or for lols LIMBO
During GRACE, your domain is in limbo because it’s neither fully expired (nobody else can have it), nor fully functional (you can’t change where it points to, you can’t transfer it, you can’t sell it on a marketplace)
So you are still the owner but it is ‘freezed’
So in this sense, GRACE is an extra ‘ownership’ time that @ENSdomains gives to every domain holder so that they can think if they really want to let their ownership expire, or so that they can remember that their ownership is about to expire if they had forgotten about it.
So, imagine that you register gem.eth for 1 year. Then, you’ll get 15 months of ownership in total — not just 12!
However, once the initial 12 months of normal ownership end, the 3 months of GRACE start and the use of gem.eth will be ‘freezed’
Same if you register it for shorter or longer:
e.g. you register for 2 months >> you get 5 months of ownership
e.g. you register for 2 years >> you get 2 years and 3 months of ownership
You ALWAYS get 3 months of GRACE no matter how long or short the registration is
Now the thing that has many people confused is how the renewals (AKA extensions) affect those 3 months of GRACE.
The best way to understand it is with examples:
Example 1
I’ve already spent 2 of my 3 months of GRACE for gem.eth
That means that I only have 1 month of GRACE left
Which in turn means that, in 1 month, gem.eth will be fully expired and anyone will be able to get it.
Now imagine that I extend it for just 1 month what will happen?
gem.eth won’t get out of GRACE because I’d already spent 2 months of my GRACE.
Instead the GRACE counter will be reset back 1 month, which is good, because now instead of 1 month left before it fully expires I’ll have 2 months before it fully expires.
Example 2
I’ve already spent 2 of my 3 months of GRACE but this time instead of renewing it for just 1 month, I renew for 4 months
In this case, I will have effectively taken gem.eth out of grace. 2 of those months will be used to pay for the 2 months of GRACE that I had already consumed, and the 2 other months will be the actual fully usable time that I get.
So now I can use gem.eth (or transfer it, or resell it) for 2 months, and at the end of those 2 months, I will also get my entire 3 months of GRACE once again.
That’s how renewals and GRACE work—you always pay only for the amount of GRACE that you have already consumed. No More BUT No Less
EXTRA: but what happens if GRACE ends?
If I forget to renew gem.eth during those 3 months of GRACE, or if I decide that I don’t want it anymore, then after the entire 3 months of GRACE are over, gem.eth will become publicly available — which means that anyone can now register it.
BUT, during the first 21 days of being publicly available, it has a special thing called PREMIUM.
During those 21 days anyone (including you) who wants to register it needs to pay a PREMIUM amount on top of the normal registration price.
That extra amount starts at a whopping $100 million and declines rapidly down to $0 over the course of those 21 days.
After the 21st day is over, if nobody has registered it paying the premium, all @ENSdomains are completely ‘reborn’ again, in the sense that they will have no owner and also no premium — anyone can register them at the normal base registration price.
That’s GRACE & PREMIUM
Link to tweet: https://twitter.com/MattGarciaEth/status/1576236819984752640?s=20&t=Meb8200RT-ZqdaSwaayEGw