[EP5.3] [Social] Determine ENS Labs' next steps in eth.link litigation
Since 2017, ENS Labs has been operating eth.link as a public gateway for the Ethereum community, providing access to ENS+IPFS sites. Eth.link has been used by some of the largest projects in the space, including Uniswap.
Eth.link was kindly delegated to ENS Labs for this purpose by its owner, Virgil Griffith. In August 2022, a dispute arose between ENS Labs, Dynadot, GoDaddy, and Manifold Finance about ownership of eth.link after the transfer and auction of the domain without ENS' consent. The highest bidder for eth.link at the auction was Manifold Finance, who expressed their intention to operate the service themselves. A full recitation of the facts surrounding the dispute can be found within the complaint that ENS Labs filed in September 2022.
Before the domain could be transferred, ENS Labs and Virgil successfully obtained a preliminary injunction from a federal district court judge in Phoenix, Arizona. The Court ordered that Dynadot had to immediately return eth.link to ENS Labs. Since then, this litigation has been proceeding slowly through the courts. ENS Labs had to enforce the preliminary injunction as to Dynadot and Manifold Finance exited the lawsuit on jurisdictional grounds. Settlement discussions between the parties indicated that Manifold Finance should be included in any global settlement because of its potential claims to eth.link and against Dynadot.
Recently, Manifold Finance has extended a settlement offer. They are demanding $300,000, along with confidentiality and non-disparagement clauses. In return, they are offering an allparties settlement, which would result in the dismissal of the case and ENS Labs retaining the eth.link domain name.
ENS Labs believes that this is the appropriate juncture to solicit the DAO's input on how to proceed with the litigation. We are thus asking the DAO to instruct ENS Labs on the next steps to take in this case, whether that be agreeing to the settlement, offering a compromise amount, continuing the lawsuit, or dismissing the matter altogether, which would relinquish ENS Labs' possession of eth.link. Thus far, ENS Labs has been funding this litigation from its own finances. Our expenses so far amount to approximately $750,000. Continuing the case is likely to incur substantial additional costs.
Further, given the criticality of eth.link to the ENS ecosystem, we would like to request reimbursement from the DAO for the legal fees incurred in protecting possession of eth.link.
This will be an approval vote, with four independent items:
- Do you approve the proposed settlement?
- Do you approve of offering a compromise amount?
- Do you approve of continuing the litigation?
- Do you approve reimbursing ENS labs for its legal expenses involved in pursuing this case?
You should vote on each outcome you would be happy with. For example, if you would be happy with either continuation or a compromise settlement, but not the full amount, you would vote for options 2, 3 and 4. If you prefer that the case be dismissed, vote only for option 4, or for no options.
If the reimbursement is not approved, or none of the options receive a majority (50%) of approving votes, ENS Labs will:
- Promptly post an interstitial on eth.link, warning users of the potential change in ownership and functionality of the domain, and offering alternatives including eth.limo.
- Dismiss the litigation without delay and without unnecessary further expenditure of funds.
Based on the outcome of the vote, ENS Labs will proceed with the case based on whichever of the courses of action (settlement or continuation) receives the higher proportion of approving votes. Subsequently, ENS Labs will post an executable proposal seeking reimbursement from the DAO for its legal expenses pursuing the case.
