question Would you use a domain marketplace based on crypto?

[blakebrown]

Hey everyone,

I'm curious if there'd be any interest in a new marketplace for listing/auctioning domains with crypto? I think this would alleviate some of the problems I've read about on here so far:
- Offers on auctions/listings would be fully legitimate, it'd be impossible to fake
- All sales would be reported publicly, but you'd still have privacy because you wouldn't know the actual person who sold the domain only their wallet address
- Lower commission rates, crypto marketplaces are usually 5% or less
- All sales/payouts would be instant

I'm thinking about sinking a lot of time, effort & money into building this. So before I do, I just wanted to confirm if this is actually something you guys would want? Also, would you have any preference on Ethereum, Solana, or USDC as the default currency of the platform?

 

[jberryhill]

All sales/payouts would be instant

How do you propose to do instant domain transfers?

 

[ontiscal]

DAN supports BTC both for buyer and seller.
Imo every service will support crypto in the next future otherwise it will be out of the market.

P.S.
I have noticed an increase in the number of domains sold corresponding with large increases in crypto quotes.
Therefore I think some whales invest crypto profits in domains (a conservative strategy that makes sense after all).

 

[blakebrown]

How do you propose to do instant domain transfers?

There would still be a 60-day registrar lock, however you could transfer it instantly to an account at the same registrar where the domain is located.

You'd essentially have an NFT representing the domain, so the NFT can be freely traded, and whenever someone wants the domain they can redeem the NFT given the conditions I mentioned above.

 

[DrJacoby]

Call me old-fashioned, but I don't have any need for crypto currencies.

And no, I'm not anti-technology in any way. AI is huge, blockchain technology is a big thing, the rapid development of solar and battery tech is amazing, space exploration, etc.

 

[blakebrown]

DAN supports BTC both for buyer and seller.
Imo every service will support crypto in the next future otherwise it will be out of the market.

P.S.
I have noticed an increase in the number of domains sold corresponding with large increases in crypto quotes.
Therefore I think some whales invest crypto profits in domains (a conservative strategy that makes sense after all).

Thanks for the feedback! I guess this is slightly different than just crypto payments, it's actually having the ability for domains to be represented on a blockchain which enables some interesting use cases.

 

[blakebrown]

Call me old-fashioned, but I don't have any need for crypto currencies.

And no, I'm not anti-technology in any way. AI is huge, blockchain technology is a big thing, the rapid development of solar and battery tech is amazing, space exploration, etc.

Thanks for letting me know, it's definitely not everyone's cuppa tea!

 

[jberryhill]

You'd essentially have an NFT representing the domain, so the NFT can be freely traded, and whenever someone wants the domain they can redeem the NFT given the conditions I mentioned above.

...and a registrar is going to transfer the domain name why?

Are we talking about ordinary domain names, or the imaginary ones nobody uses?

it's actually having the ability for domains to be represented on a blockchain

Verisign does not care what is on a blockchain. If we are talking about a .com domain name, then Verisign cares about what is in their registry database, and the corresponding registrar cares about who is in their registrant database for that name.

I'm a little slow, so maybe if you could flesh out an example. Allen owns Example.com registered through GoDaddy. Allen is going to list this domain name for sale on your marketplace for 5 crapcoins. Bob has 5 crapcoins to pay for the domain name. Can you walk me through what happens next?

 

[bmugford]

I am with @jberryhill on this.

The whole blockchain / NFT thing does not work with standard domain extensions because they are under ICANN policies.

There are policies when it comes to ownership, WHOIS, transfers, etc.

The registration information determines who owns a domain, not what an NFT says.

If you want to deal with blockchain / NFT domains, they are out there. At this point though they have very limited utility, at least as a traditional website.

Brad

 

[blakebrown]

...and a registrar is going to transfer the domain name why?

Are we talking about ordinary domain names, or the imaginary ones nobody uses?



Verisign does not care what is on a blockchain. If we are talking about a .com domain name, then Verisign cares about what is in their registry database, and the corresponding registrar cares about who is in their registrant database for that name.

I'm a little slow, so maybe if you could flesh out an example. Allen owns Example.com registered through GoDaddy. Allen is going to list this domain name for sale on your marketplace for 5 crapcoins. Bob has 5 crapcoins to pay for the domain name. Can you walk me through what happens next?

We're talking ordinary domain names.

Let's say our company is called SuperDomain.

To list a domain for sale, you send it to SuperDomain by either directly transferring ownership or (assuming SuperDomain had a registrar license) transferring it to SuperDomain registrar while maintaining ownership. SuperDomain in return issues you a digital receipt (an NFT) which you can freely trade around, borrow against, auction, etc. it can change hands 50 times for all we care.

To acquire a domain, you tell SuperDomain "hey I want to redeem this NFT I have in my wallet". SuperDomain then burns the NFT while granting you ownership over the domain so you can manage the DNS records.

Does this make sense @jberryhill @bmugford?

 

[bmugford]

We're talking ordinary domain names.

Let's say our company is called SuperDomain.

To list a domain for sale, you send it to SuperDomain by either directly transferring ownership or (assuming SuperDomain had a registrar license) transferring it to SuperDomain registrar while maintaining ownership. SuperDomain in return issues you a digital receipt (an NFT) which you can freely trade around, borrow against, auction, etc. it can change hands 50 times for all we care.

To acquire a domain, you tell SuperDomain "hey I want to redeem this NFT I have in my wallet". SuperDomain then burns the NFT while granting you ownership over the domain so you can manage the DNS records.

Does this make sense @jberryhill @bmugford?

I understand what you are saying, but that is not how being an ICANN accredited registrar works.

Additionally, registries would not be able to do that as they are also subject to ICANN policies.

The blockchain/NFT ownership thing is just not compatible with standard domains.

Brad

 

[jberryhill]

I designed the rules around which the Uniregistry Marketplace operated, and the Rubik's Cube of "how to get a business model to mesh with ICANN domain registration rules and financial regulations" is enough to drive anyone bananas. So, I'll just throw out a few things you might want to think about. Some of the "things to think about" apply to both models.

1. Marketplace takes ownership model:

you send it to SuperDomain by either directly transferring ownership

(a) Liability. Unlike commodity goods, a domain name can be a liability bomb waiting to go off. It is very brave to accept the potential liability of becoming the owner of whatever domain name someone chooses to list in the marketplace. People list all sorts of trademark infringing domain names for sale, as gets pointed out on this forum all of the time. Now, of course, SuperDomain can vet each one, but that's going to require some overhead to make sure (to at least some degree of comfort) that someone is not bulk-listing a portfolio of dicey names.

There are some ways of managing that, but even if SuperDomain assumes some sort of custodial role, 15 USC 1125(d) doesn't merely refer to registration of cybersquatted domains, and the "trafficking" part of "registers, traffics in, or uses" has never really gotten a lot of attention <https://www.law.cornell.edu/uscode/text/15/1125>.

(b) Trust. It will require a pretty high level of trust to have people hand over ownership of their domain names to SuperDomain. Grizzled veteran domain investors who have endured decades of scandalous behavior by registrars, registries, marketplaces and other service providers do not have a deep well of trust, and even the best get burned from time to time.

(c) Renewals. Anyone will tell you that domain investing is largely a waiting game. Domains can sit on the shelf for a long time. Is SuperDomain paying for the renewals while the NFT is floating around in the wild? I transfer the domain name to you in January and you issue me an NFT. The domain name expires in March. What happens next? I assume SuperDomain is not paying to renew everyone else's domain names, but how are renewals going to work? This isn't a monkey jpeg sitting on a server somewhere for as long as the server lasts. A domain name needs periodic renewals and can't be renewed for more than ten years chunks.

(d) UDRP/Litigation Transfers. The domain name I transferred to SuperDomain is stolen, infringes a trademark, belongs to a company in bankruptcy... whatever. A court or UDRP panel orders the registrar to transfer the domain name to someone else. The registrar does so, and the new owner moves the domain name to their preferred registrar. The NFT, meanwhile, has lived a happy life and has been sold five times. I imagine the current owner of the NFT is just left holding the bag, since SuperDomain no longer has the domain name to redeem the NFT. How is that going to work?

(e) What is the domain name doing? From the time the domain name is listed for sale to the time that someone redeems the NFT with SuperDomain to obtain transfer of the domain name, what is it doing? Is it resolving to SuperDomain? Can I use the domain name for some website and email while it is listed for sale, or is it effectively unusable from the time the NFT is issued to the time it is redeemed? How that question is answered then branches out into a couple of other potential issues.

2. Marketplace as Registrar model:

transferring it to SuperDomain registrar while maintaining ownership

This is, in general, a little easier to administer. A middle ground is to have SuperDomain be a reseller, depending on the extent of management control the registrar provides its resellers.

The "marketplace is the registrar" model is still going to have some of the issues above, but the workarounds might differ. You also have to deal with the fact that transferring a domain name from one entity to another has to comply with the ICANN Transfer Policy. There are some workarounds for that, such as establishing the registrar as the agent of the registrant for the purpose of carrying out or denying transfers under the rules for the marketplace.

But, at all times, someone has to be the registrant of the domain name, and that someone will have been required to provide the required identification data elements and to have confirmed them to at least the level required by the ICANN RAA. If I'm the owner who listed the domain name and I've sold the NFT, I can go on my merry way with my proceeds, but if nobody shows back up to redeem that NFT with SuperDomain, am I going to remain the registrant of the domain name? I'm surely not paying the renewals, and I doubt SuperDomain is paying them. But who is SuperDomain putting in, for example, the monthly registration data escrow deposit as the registrant of the domain name? I already sold it as far as I'm concerned, but if that NFT is traded anonymously 10 times in the ensuing months without anyone showing back up to de-list it, then how do you envision that I quit being the registrant of the domain name I've already "sold"?

 

[blakebrown]

I designed the rules around which the Uniregistry Marketplace operated, and the Rubik's Cube of "how to get a business model to mesh with ICANN domain registration rules and financial regulations" is enough to drive anyone bananas. So, I'll just throw out a few things you might want to think about. Some of the "things to think about" apply to both models.

1. Marketplace takes ownership model:


(a) Liability. Unlike commodity goods, a domain name can be a liability bomb waiting to go off. It is very brave to accept the potential liability of becoming the owner of whatever domain name someone chooses to list in the marketplace. People list all sorts of trademark infringing domain names for sale, as gets pointed out on this forum all of the time. Now, of course, SuperDomain can vet each one, but that's going to require some overhead to make sure (to at least some degree of comfort) that someone is not bulk-listing a portfolio of dicey names.

There are some ways of managing that, but even if SuperDomain assumes some sort of custodial role, 15 USC 1125(d) doesn't merely refer to registration of cybersquatted domains, and the "trafficking" part of "registers, traffics in, or uses" has never really gotten a lot of attention.

(b) Trust. It will require a pretty high level of trust to have people hand over ownership of their domain names to SuperDomain. Grizzled veteran domain investors who have endured decades of scandalous behavior by registrars, registries, marketplaces and other service providers do not have a deep well of trust, and even the best get burned from time to time.

(c) Renewals. Anyone will tell you that domain investing is largely a waiting game. Domains can sit on the shelf for a long time. Is SuperDomain paying for the renewals while the NFT is floating around in the wild? I transfer the domain name to you in January and you issue me an NFT. The domain name expires in March. What happens next? I assume SuperDomain is not paying to renew everyone else's domain names, but how are renewals going to work? This isn't a monkey jpeg sitting on a server somewhere for as long as the server lasts. A domain name needs periodic renewals and can't be renewed for more than ten years chunks.

(d) UDRP/Litigation Transfers. The domain name I transferred to SuperDomain is stolen, infringes a trademark, belongs to a company in bankruptcy... whatever. A court or UDRP panel orders the registrar to transfer the domain name to someone else. The registrar does so, and the new owner moves the domain name to their preferred registrar. The NFT, meanwhile, has lived a happy life and has been sold five times. I imagine the current owner of the NFT is just left holding the bag, since SuperDomain no longer has the domain name to redeem the NFT. How is that going to work?

(e) What is the domain name doing? From the time the domain name is listed for sale to the time that someone redeems the NFT with SuperDomain to obtain transfer of the domain name, what is it doing? Is it resolving to SuperDomain? Can I use the domain name for some website and email while it is listed for sale, or is it effectively unusable from the time the NFT is issued to the time it is redeemed? How that question is answered then branches out into a couple of other potential issues.

2. Marketplace as Registrar model:



This is, in general, a little easier to administer. A middle ground is to have SuperDomain be a reseller, depending on the extent of management control the registrar provides its resellers.

The "marketplace is the registrar" model is still going to have some of the issues above, but the workarounds might differ. You also have to deal with the fact that transferring a domain name from one entity to another has to comply with the ICANN Transfer Policy. There are some workarounds for that, such as establishing the registrar as the agent of the registrant for the purpose of carrying out or denying transfers under the rules for the marketplace.

But, at all times, someone has to be the registrant of the domain name, and that someone will have been required to provide the required identification data elements and to have confirmed them to at least the level required by the ICANN RAA. If I'm the owner who listed the domain name and I've sold the NFT, I can go on my merry way with my proceeds, but if nobody shows back up to redeem that NFT with SuperDomain, am I going to remain the registrant of the domain name? I'm surely not paying the renewals, and I doubt SuperDomain is paying them. But who is SuperDomain putting in, for example, the monthly registration data escrow deposit as the registrant of the domain name? I already sold it as far as I'm concerned, but if that NFT is traded anonymously 10 times in the ensuing months without anyone showing back up to de-list it, then how do you envision that I quit being the registrant of the domain name I've already "sold"?

WOW! What a response! Really grateful you took the time to indulge my entrepreneurial ideas You definitely got where I'm going with this.

1. Marketplace takes ownership model:
a) Liability. Correct me if I'm wrong, but if the company were to receive a copyright/trademark infringement, we could just transfer the domain back to the original owner and tell them it's their responsibility to deal with?
b) Trust. Totally agree. Without a registrar license, only the most die-hard crypto users would want to use this product.
c) Renewals. We could renew on behalf of users, assuming they provide a valid credit card.
d) Litigation. See my response to a)
e) What is the domain doing? Since SuperDomain would have ownership, we could allow whoever the current owner of the NFT is to make DNS changes.
2. Marketplace takes registrar model:
Really great question here. I suppose there's two solutions.
1. SuperDomain remains the registered owner with ICANN until someone redeems the NFT.
2. If a buyer of the domain/NFT chooses to reveal their identity rather than remaining anonymous, we can of course let them be the proper registered owner.

 

[jberryhill]

a) Liability. Correct me if I'm wrong, but if the company were to receive a copyright/trademark infringement, we could just transfer the domain back to the original owner and tell them it's their responsibility to deal with?

Once you get sued, it's not up to you whether you get out of that suit. You didn't mention where you are, but if you are in, say, the US, and a plaintiff files a cybersquatting suit against you looking for $100k in statutory damages, they are going to do two things. First, they are going to have the registrar lock the domain name pursuant to the relevant provisions of 15 USC 11125(d), so you can't transfer the domain name. Second, they aren't going to agree to let you transfer the name to someone off in Wherethefuckistan and say, "Oh, yeah, we'll go after them instead."

c) Renewals. We could renew on behalf of users, assuming they provide a valid credit card.

I listed the name and sold the NFT already. Why am I going to want to pay renewals and why would I provide a valid credit card (for now) since I'm a "die-hard crypto user" looking to use a crypto-based domain exchange? If nobody ever comes back to you to redeem the NFT, you are going to bill me every year until the card expires?

d) Litigation. See my response to a)

That was a different question. The scenario was:

1. Name is listed on your exchange,
2. NFT is sold to some sequence of several anonymous wallet holders,
3. UDRP is filed and the name is transferred to the prevailing complainant by the registrar,
4. Current NFT holder shows up and says "I want my domain name I paid for."

What result?

e) What is the domain doing? Since SuperDomain would have ownership, we could allow whoever the current owner of the NFT is to make DNS changes.

Well, then why would they ever want to take ownership of the domain name? They don't have to pay the renewals, and they get free perpetual use of the domain name. You don't know their identity, so you are going to take the fall for whatever mischief they do with the domain name.

Why, yes, you'll have a lot of people signing up for that.

 

[ivey]

To trade web2domains using crypto, most marketplaces already use Bitpay for payment similar...like squadhelp.. even their wlm allows that option.

For trading web 3 domains, they have marketplaces like unstoppabledomains.com

 

[karmaco]

We're talking ordinary domain names.

Let's say our company is called SuperDomain.

To list a domain for sale, you send it to SuperDomain by either directly transferring ownership or (assuming SuperDomain had a registrar license) transferring it to SuperDomain registrar while maintaining ownership. SuperDomain in return issues you a digital receipt (an NFT) which you can freely trade around, borrow against, auction, etc. it can change hands 50 times for all we care.

To acquire a domain, you tell SuperDomain "hey I want to redeem this NFT I have in my wallet". SuperDomain then burns the NFT while granting you ownership over the domain so you can manage the DNS records.

Does this make sense @jberryhill @bmugford?

Why would anyone want to get paid in an NFT other than to hide money? People want to receive a payout immediately in cash or crypto when they sell a domain.

This is sounding like Master*ucks but in an nft version. No trust, no acceptance no recourse. There are no protections in place.

 

[PhongSGC]

I choose DAN because it only supports BTC in payment

 

[ResoluteDomains]

Hey everyone,

I'm curious if there'd be any interest in a new marketplace for listing/auctioning domains with crypto? I think this would alleviate some of the problems I've read about on here so far:
- Offers on auctions/listings would be fully legitimate, it'd be impossible to fake
- All sales would be reported publicly, but you'd still have privacy because you wouldn't know the actual person who sold the domain only their wallet address
- Lower commission rates, crypto marketplaces are usually 5% or less
- All sales/payouts would be instant

I'm thinking about sinking a lot of time, effort & money into building this. So before I do, I just wanted to confirm if this is actually something you guys would want? Also, would you have any preference on Ethereum, Solana, or USDC as the default currency of the platform?

For me, not ever.

 

[NameMaxi.com]

So to touch on this topic,

.box TLD just launched. They are both a ICANN Web2 domain and also an NFT.

Here is what I bought during the sunrise period

4.box which I made it redirect to my website

You can also see the NFT on Opensea.

So this idea is now possible.

Time will tell if trading web2 domains wrapped as NFTs will be a thing.

 

[HotKey]

There's no registrars selling it yet and the registry has it for over 200$ USD per name.

It's a cool name though!

What is "web2 domains wrapped as nfts"?

 

[NameMaxi.com]

It can only be bought via my.box right now and its sunrise period for people are buying the premium ones.

Basically instead of a domain living in your godaddy account, its an NFT which in on ETH/Optimism chain which can be transferred easily.

 

[Kuffy]

I offer a discount to buyers paying with Bitcoin, I have names registered via Name Silo, and after two confirmation of payment, I can push the name to a NS account, or unlock it to allow you to transfer to your registrar. That system seems to work well. How would your system improve on that? I'm not going to transfer my names to include them in a sales portfolio.

 

[NameMaxi.com]

"after two confirmation of payment, I can push the name to a NS account, or unlock it to allow you to transfer to your registrar."

The buy had to trust you. If Payment and Transactions are bundled into one action, its faster, no need to trust anyone.

Think of this.
Someone has an impulse to buy your domain.
He clicks buy. Money moved to seller, domain moves to buyer in one minute.

Reduced friction. How many more domain sales will you get?

 

[jberryhill]

Basically instead of a domain living in your godaddy account, its an NFT which in on ETH/Optimism chain which can be transferred easily.

That's not even true according to their own terms.

https://nic.box/license

b. Reserved Rights. You do not gain any right, title, or interest in or to any .box domain name corresponding to Your NFT except in accordance with Your .box Registration Agreement. A .box domain name Registration Agreement is required in order to register the .box domain name corresponding to the NFT. The NFT is used to access the .box App and the .box App must be exclusively used to change settings of the associated .box domain name, except for the nameserver which cannot be changed except by Us. Being the registrant of a .box domain name does not entitle the name holder to the corresponding .box NFT, however whomever owns the NFT will have exclusive access to the corresponding .box domain name settings.

...although I wouldn't put much faith in whomever wrote those terms....

This Agreement shall be governed by, and construed in accordance with, the law of the Grand Cayman without regard to any conflict of laws principles.

Grand Cayman is one of three islands making up the Cayman Islands, which is a British Overseas Territory. Grand Cayman is not some separate sovereign entity apart from the Cayman Islands. This is like saying "the law of the Long Island" to refer to the laws of the State of New York.

 

[jberryhill]

This part is also interesting:

https://nic.box/abuse

If your .box domain name is cancelled or transferred in accordance with this Abuse Policy or in accordance with the Registration Agreement, your corresponding NFT will also be cancelled or cancelled and reissued to the transferee.