For years, the Ethereum Name Service (ENS) has offered .eth domains on the Ethereum blockchain, predominately as way to link unique human-readable names to unwieldy wallet addresses (so you can send money to eg roddi.eth instead of 0x3e8723f81463D640Ee2e0C06A31e7C8eb107a0D0). They have always stressed that they want to work with traditional DNS rather than compete with it and have expressed interest in controlling a gTLD in the ICANN root1:
In order to facilitate making the most widely usable naming system, ENS aims to integrate with the legacy DNS naming system to the greatest extent possible without sacrificing decentralization of ENS. ENS governance will not enact changes that compromise ENS's ability to do this.
Not permissible: ENS governance must not create new top-level domains unless those domains have been granted to ENS by a DNS authority.
But a major stumbling block is ICANN's restriction on all three-letter country codes (even though ccTLDs currently use the two-letter codes) which includes Ethiopia's ETH and rules out the .eth domain - this forced ENS Labs instead to apply for the .ens domain.
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Last year, the Head of Growth at ENS Labs, James Beck, outlined their approach to ICANN's new gTLD program2. With no apparent sense of irony, the organisation which has been prominently advertising ENSv2 on their website as "coming soon!" for at least two-and-a-half years, rued:
Unlike the blockchain space, ICANN's stability and security rely on incremental progress.
It's a multi-year process involving contention sets, and everyone believes it's going to drag on - multi-stakeholder governance is not known for moving fast.
It seems though that ENS Labs are planning to make use of the anticipated long timeframe to figure out what they actually want to do with .ens should their application be successful. In the same article, Beck writes that they don't really know yet but will a apply for it as a dotBrand meaning it will not, initially anyway, be open to registration by the public. Crucially though, section 7.3 of the ICANN Applicant Guidebook3 stipulates that for a dotBrand application, "The applied-for gTLD string must exactly match the textual elements of a registered trademark" which ENS Labs appear to have filed an application for last year but its registration is yet to be confirmed4.
Perhaps more worryingly for them, there are multiple other parties who do have actively registered ENS trademarks (including EasternCCTV, Engineered Network Systems, Audacious Inquiry, LET Medikal and New Star Enterprise) who may offer some resistance to ENS Labs' application later in the process.
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So what are the options if it is opened up beyond a dotBrand? It's unclear if they would really be willing to work to ICANN's draft guidelines for integrating with alternative naming systems, even if .eth were ever allowed to be delegated but they did describe it as "technically and practically possible"5. Or they could decide to grant everyone with an .eth name the corresponding .ens name and transition to it going forward. Another option would be an upgrade of the current IPFS bridge eth.limo, where ENS users can put their website on decentralised storage but allow it to be accessed via their .eth name with .limo added at the end (instead of the content identifier, or CID, which is a long random-looking string of characters). For example, jamesbeck.eth specifies an IPFS content hash in his ENS profile and then that content is available over the bridge to any normal internet user at jamesbeck.eth.limo.
If they used the new gTLD for this it could mean the same address onchain and in normal DNS, so someone could access jamesbeck.ens (without having to know an extension like .limo to add). I'm not sure whether this would fall foul of the draft guidelines for integration though. You would also need to ensure you already controlled any special domains you wanted, before a user registered them, such as nic.ens or dot.ens.
Another advantage of an IPFS bridge on an ENS-controlled TLD would be helping to avoid a repeat of the eth.link embarrassment when the registrant of the original bridge domain was in prison when it was due for renewal and it ended up being transferred to someone else's control. Somewhat amusingly, the ENS DAO announced the problem by euphemistically describing Virgil Griffith's Korean jailtime as him being "currently unavailable"6. After a protracted legal battle (which included someone else managing to buy the domain at auction for $852k) the ENS DAO did eventually manage to regain control of eth.link but by that time the community-driven replacement eth.limo had already become the bridge of choice.