After a shaky start this spring, a project called the Ethereum Name Service (ENS) appears to be attracting serious capital.

Thousands of people are vying for a new set of ethereum names being auctioned off by the leaderless domain service, with some putting in bids for upwards of $1m.

Even though bid amounts are more like deposits (which you can get back after a year, if you chose to relinquish the name), what still comes as a surprise is how much people are willing to put toward more popular names.

So far, exchange.eth was claimed for 6,660 ETH ($609,000), foundation.eth went for 300 ETH ($27,000), and weather.eth was auctioned for 101 ETH ($9,000).

In case you missed our launch coverage, ENS works similar to the domain name server (DNS) system we know today, creating human-readable names to use in place of machine names. But instead of pointing to websites on the internet, ethereum names point to ethereum resources, like wallets, content on its decentralized storage system Swarm, and more. Also, ENS itself is decentralized, running on smart contracts.

On the first day of the relaunch, auctions began opening up at a trickle, but that pace quickly accelerated as the week wore on. At press time, 27,800 auctions have been initiated, with thousands more opening each day.

More unusual names included ones like ethereumclassic.eth, winklevoss.eth and donaltrump.eth.

So, you may be wondering how the bidding works.

When you open an auction, you enter a single bid for the most you are willing to pay for a name. But, you only pay up to the amount of the second highest bidder, or if nobody bids against you, you only pay the minimum of 0.01 ether.

Note, that you only get one chance to bid on a name. Further, all bids are sealed, so anyone who bids against you does so blindly. They put in a bid for the most they are willing to pay, and whomever comes out on top, wins.

Because there is no central trusted service to hold on to the bids – smart contracts cannot hold secrets – users have to reveal their bids themselves. (Nick Johnson, one of the Ethereum Foundation employees leading the project, recommends people set a calendar date, and then reveal a name right away, so they don't forget and lose their bid.)

Still there were some minor bumps in the first week of the ENS launch, including a couple of bugs Johnson called "low impact".

For instance, one bug caused users to bid on the wrong version of a domain when they entered a name with mixed capital letters. But that was remedied, and the program now automatically lowers the case.

Also, Johnson explained, a few people lost the opportunity to reveal their bids because, after they bid, they reset their browsers (clearing the data) before backing up their data to a JSON file first.

You have a 48-hour window to reveal bids manually after the three-day bidding period, otherwise, any ether you put up are burnt. Now, the system prompts you immediately to download your bids, so people do have a reminder.

Further, since the launch, third parties have stepped into the game, giving users more options for how to manage their auctions.

Initially, if you wanted to bid on an ethereum name, your only choice was to use the official dapp, which requires a blockchain-enabled browser, or the command line. But now you can also go to MyEtherWallet.com, which will step you through the process. Ethtools.com has integrated with ENS, as well.

However, Johnson says, just like most users on the internet don't buy their own domain names, it's likely most ENS users won't go through the process of buying their own ethereum names either. Instead, he believes users will go to their favorite wallet, and the wallet will instantly give them a name, like alice.myetherwallet.eth, which they can use.

Johnson told CoinDesk:

As the ENS team moves forward, the plan is to focus on getting more wallets to integrate and support the software. Johnson said he also wants to expand the capabilities of ENS and add more standardized components.

"One of the things we would like to do is add proper support for DNS records. We could then use one of the alternate DNS hierarchies to offer .eth as a top level domain," he said. "You could actually host your website with a .eth domain, though not on the global internet for now, because we have to talk to ICANN about all of that."

Right now, ENS is releasing names over an eight-week period as part of its slow launch. And in two years, a planned upgrade will move ENS to a more permanent system, at which point, people will be able to auction for shorter names less than seven characters.

Auction gavel image via Shutterstock