What is the value of your Web3 domain name?

Original title: "What is the value of your Web3 domain name?" "

Original author: mtyl.eth

When you heard that a certain Web3 domain name was sold for a sky-high price again, when you saw a Web3 friend around you change to a domain name as his user name, when you started When looking for the domain name you are interested in in the registration column, have you thought deeply about the usefulness of these domain names? What are the differences and connections between different projects? What is the imaginative space for the development of the domain name track? If you are interested in these issues, please don't miss this article!

The structure and core ideas of this article are as follows. Readers who already know about Web3 domain names can jump directly to the chapters they are interested in:

Chapter 1, Introduction to Web3 Domain Names: User’s "Web3 Nickname", Encapsulation of Addresses on the Chain Chapter 2, Application Scenarios of Web3 Domain Names: Unifying Account Name and Identity Data in Applications, and Web2 web page addresses are interconnected and serve as an identity management and social display tool. Chapter 3, the classification of the Web3 domain name track: single-chain domain names (including public chain domain names, multi-domain name registrars, and social domain names), multi-chain domain names (including three Different implementation paths), DNS alternative domain names Chapter 4, the author’s observations on Web3 domain names, including: the strength of user demand for Web3 domain names, analysis of Web3 domain name transactions, outlook on the competitive landscape of Web3 domain names, and the potential of Web3 domain name projects Suffix conflict problem

01. What is a Web3 domain name?

Web3 domain names generally refer to public chain abbreviations such as .eth, .bnb, nft, .wallet, etc. Domain names in the blockchain/Web3 space. Ethereum's ENS is the most well-known and representative project on this track.

The concept of domain name originated in the early Internet era. In the earliest days, everyone directly accessed the web page through the IP address. For example, if you enter "202.108. Baidu's IP address. But obviously, this string of numbers is not readable and difficult to remember. Therefore, early Internet designers built the Domain Name System DNS (Domain Name System), which encapsulates digital IP addresses by using more readable domain names such as www.baidu.com as "web address", so that People use it every day. Now, every Internet user knows the concept of "web address", even if most of them don't know the underlying IP address, DNS, etc., but this does not hinder their experience on the Internet at all.

The most intuitive value of the Web3 domain name is also similar. It is the user's "Web3 nickname" and encapsulates the address on the chain. For example, vitalik.eth is for this Encapsulation of Ethereum address:

0xd8da6bf26964af9d7eed9e03e53415d37aa96045

Every Web3 user will Hold at least one on-chain address, but I'm afraid no one will bother to remember their own address, let alone someone else's. Domain names such as vitalik.eth, 2089.bit, and jack.bnb are obviously more readable and memorable than the long string of address characters, and can better meet people's daily needs. For example, if you need to ask your friend to transfer money to you, you may find your on-chain address in your wallet or notepad, and then send it to your friend; but if you hold a domain name, such as vincent.eth, you can Directly tell your friends to transfer funds to this domain name.

From this point of view alone, the value of the domain name has a lot of room for development: after all, it can help the public users to block the on-chain address, which is an on-chain technology Details, will it become the "representative" of the address in the minds of users when Web3 enters the public, just like most users on the Web "only know the web page address, but not the IP"?

 Web2 domain name and Web3 domain name

From a technical point of view, the technical essence of a domain name is not complicated, it is the data relationship of "mapping". Therefore, it can be realized in many ways: in Web2, the registration and management of all domain names are in the charge of ICANN located in California, USA, which is highly centralized and supervised by the US government; but in Web3, the most The mainstream domain name implementation method is the on-chain smart contract represented by ENS, which casts each domain name into the form of Ethereum NFT, which can be freely registered and traded without permission, and the corresponding resolution address can be set by the user himself.

In addition, in addition to binding the address of the public chain, the domain name has more room for imagination, because it can also be linked with other public chain addresses , Web2 account, or even Web2 DNS address. For example, you only need to know the ENS domain name "mtyl.eth", and you can directly find one of the author's commonly used Ethereum addresses, its corresponding Opensea account, the author's Twitter account, and the author's personal homepage website in ENS. To some extent, this is the prototype of a Web3 universal identity that has emerged.

Only one mtyl.eth domain name can be related in Web3

02. The specific application scenarios of Web3 domain name

As a direct-to-user What is the use of Web3 domain names for selling NFT products? Next, let the author sort out the application scenarios of domain names in Web3 in detail.

1) Domain name + DApp: unification of account names, data exchange

The most direct application , is to use the domain name directly as the account name of each Web3-related application. In Web2, whenever a new website/application is used, a user name registration is often unavoidable; for convenience, many users will choose from some names that they used before when registering a new account to reduce their memory. costs, and enhance the recognizability of their online identities. However, even if users want to use the same username, it is not easy to achieve consistent usernames in different apps due to the different formats and lengths of usernames on different websites, as well as problems such as pre-registration by other users. If a person uses "Alvin" as a username in App A, if you want to find him by searching for "Alvin" in App B, it may not always be possible. Even if you do find an "Alvin", you still need to spend time identifying whether the controller behind these two accounts is the same person.

In Web3, due to wallet address login and chain resolution of domain names, DApp can easily support users to use a certain domain name as their account name. And because of the uniqueness of the domain name, as the domain name’s support for multiple chains matures, you can ensure that the same person is using the same domain name on Opensea (ETH) and Magic Eden (Solana). Even Web2 applications such as Twitter can use some plug-ins to authenticate those who use their own NFT domain names as their usernames, and it is not even ruled out that platform giants such as Twitter will support similar functions in the future.

Behind the unification of account names is the exchange of identity data. Since the resolution information of the domain name contains information from other chains and Web2, the application side can use the domain name to obtain user information that cannot be obtained only through the wallet address on the chain. This not only directly imports user data, but also reduces the cost of users getting started with new applications from the information level (think about filling in various information of Web2 applications), and also enables the application side to make targeted recommendations to users; Credentials and badges can also be resolved and bound by domain names, increasing the interoperability on the chain and user recognition.

Although this cross-chain and cross-Web2 intercommunication of identity data does not necessarily have to be realized through domain names, domain names are indeed a natural and excellent carrier for users. Strong competitors and partners for this subdivided value point.

2) Domain name + wallet: search address through domain name, unify account address management

Wallet and The most common domain name cooperation is to support the domain name search when transferring money, which saves the user from remembering the transfer address. For example, Metamask, a leading wallet product, has already implemented ENS domain name search support.

If you want to support the author by transferring money on the chain, you don't need to show the specific wallet address here, you can directly send it in the "Send" (Send) Enter "mtyl.eth" in the target address bar of , and you can find the corresponding address for operation.

There is no need to display a long string of addresses, no WeChat payment code, just remember a simple domain name to support the author

As for wallets and domain names, there is still room for deeper cooperation, but these cooperations may involve the strategic development of wallets, so they may not advance quickly.

Still taking Metamask as an example, each Metamask account of the user can create different sub-accounts; and different sub-accounts are on different chains, there are different the address of. This sub-account management is in the upper right corner of the browser plug-in, as shown in the lock in the figure below:

Actually, this sub-account name and the corresponding ecological niche can be replaced by a domain name

The account name of Metamask can be freely set by the user at present, and it does not have any application scenarios (simple user management is convenient). But in fact, this account name can cooperate with the domain name project party to use the corresponding domain name. The addresses of each public chain bound to the domain name naturally become the interaction address of the wallet and the application.

Derived further, after the wallet integrates the domain name and its various analytical relationships, it can also be displayed in the wallet. For example, it displays the relationship between Twitter, Reddit and other Web2 social platforms corresponding to a domain name account, and the credentials held by users in various DApps. These things are actually what some DID-focused wallet project parties themselves want to do, which makes this cooperation a potential conflict of interest. In addition, it is not easy for the domain name project party to make these tool protocols, so there is no practical progress yet. But in the future, this is indeed a possibility.

3) Domain name + Web2: intercommunication of web page addresses

Maybe some people have heard of Web3 for the first time Domain name users will think that Web3 domain names such as "2099.eth" and "2099.com" are similar, and they are both Web2 domain names (that is, web page addresses), but this is not the case. So, can your registered Web3 domain name really become a website address that can be opened by a general browser? This is actually something that many domain name projects hope to promote, but its difficulty is not reflected in technology, but in the communication between the real world and ICANN.

In ICANN's Web2 domain name management system, "webpage suffixes" such as ".com", ".cn", ".xyz", and ".link" It is called a "top-level domain", and the application for a new top-level domain name requires special submission of materials + auction. This not only requires a high application fee, but also the opening and auction time of the domain name is completely determined by ICANN. In addition, ICANN has a brand protection rule - if a brand owner (such as Apple) finds that its trademark domain name has been registered, it can appeal to obtain its own domain name. Many potential troubles. In addition, ICANN will reserve top-level domains for countries (such as .cn is for China), and the suffixes of a few projects conflict with country abbreviations, such as ".eth" of ENS and ICANN reserved for Ethiopia (Ethiopia) ccTLD conflicts.

Therefore, because the connectivity of Web2 websites is not the core value of Web3 domain names, plus the above-mentioned reasons, there is no Web3 domain name project that can realize "direct Web3 domain name as a website address". But after all, there is a precedent for Web2 domain names. The concept of building a personal homepage/company homepage around it is still very attractive. For example, Unstoppable Domains is very active in terms of Web2 connectivity. Other projects such as ENS have also formed a relatively mature "curve to save the country" plan under the unremitting exploration of members of the Web3 community: using the Web3 domain name as a second-level domain name under the top-level domain.

Although "vitalik.eth" cannot be directly input into the browser to be parsed, such as "vitalik.eth.xyz" "vitalik.eth.link" Can. Readers may wish to give it a try. For example, enter "vitalik.eth.xyz" in the browser to see the ENS Profile generated by Vitalik by default; enter "vitalik.eth.link" to see Vitalik's personal homepage:

Vitalik's ENS Profile

Vitalik's personal homepage built on eth.link

What top-level domain name to use, what are the different meanings of each top-level domain suffix, and even whether the project party can obtain control of the corresponding headset domain name, there is no convention. Taking ENS as an example, .eth.link was previously registered by co-founder Virgil Griffith, but due to Virgil’s imprisonment, the domain name was auctioned to Manifold Finance after it expired. ENS has filed a lawsuit in court, hoping to regain control of the domain name, and the case is still pending.

This kind of direct connection with the web page address, although its specific implementation still relies on the Web2 domain name system, requires the project party to be able to obtain the second-level domain name it is interested in Control, but this is more acceptable to the public than some other solutions (such as IPFS static resolution + Web3 browser opening). This natural interoperability with Web2 websites is also a unique feature of Web3 domain names, compared to other similar identity management carriers.

4) Domain Name Application Ontology: Identity Management Tool & Social Display Homepage

Web3 Domain Name Application Ontology, most of the time now only undertakes the functions of registering domain names and binding addresses on the main chain, and its presence is not high. However, as more and more applications and wallets support domain names with applications, wallets, and Web2, domain name application ontology will also carry more identity management functions. Specific examples are as follows: set the analysis targets corresponding to each chain and each Web2 platform, set the address, format and display information of the personal homepage, set some private content/content that requires specific permissions to access, etc.

The domain name project party can also naturally create a social display homepage to present the information registered by the user and the information they want to display in a structured manner. For example, the second-level domain name suffix .eth.xyz carries the function of the ENS personal homepage. As long as you know any ENS domain name, you can add .xyz after it and enter the browser to see the corresponding address of the domain name owner. some display information. Although the experience of this demonstration is still very rudimentary, it is indeed established in the long run. In addition to being operated by the domain name project itself, the personal homepage can also be carried out in cooperation with link3 and other projects that want to do similar things.

If you use your imagination further, the domain name project can also do social networking by itself, or social networking can also be one of the core operations of the project by issuing domain names. The SNS domain name issued by Linkkey is one of the more practical projects of this type.

If readers are interested in the decentralized identity track, you can refer to the author's previous research on DID:

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5) Summary of this chapter

The above is the author's integration of the more practical application scenarios of the current Web3 domain name. Different domain name projects have different emphasis on development.

In the third chapter, this article will classify and sort out the main projects of the Web3 domain name track, so that readers can understand the differences and connections between these projects, as well as the domain name project The specific data and some implementation details.

03. Classification of domain name items

  ;

There are currently many domain name projects, there may be nearly 40 or 50, but if you divide it from technical implementation and application scenarios, it is actually not too complicated-you can regard ENS as the domain name field "Pioneer" and "Big Brother", and most domain name projects are replicas of ENS on different public chains. Even if they are not direct replicas, their specific implementation on the chain also highly refers to ENS.

The author divides the current domain name projects into the following three categories: single-chain domain names, multi-chain domain names, and DNS alternative domain names. Among them, single-chain domain names can be further refined. As shown below:

1) Single chain domain name

Public domain name: represented by ENS

The recognition is very high: they all have the abbreviation of the public chain as the suffix, such as .eth, .sol, .avax, and all have the official background or official support of the public chain. Their implementation logic and application scenarios are also highly similar, nothing more than being on different public chains. Therefore, to study this type of project, you only need to focus on ENS.

ENS is the leading project in the field of Web3 domain name, which was founded in 2016 by former Google software engineer Nick Johnson. Initially, ENS was a sideline project authorized by the ETH Foundation, and then the ENS team was established with the support of the ETH Foundation. ENS has not received any external financing, and has only accepted donations from institutions such as the Ethereum Foundation.

ENS launched the beta version in May 2017 and the official version in May 2019. The trading volume of ENS ranks among the top ten of Opensea all year round, and there will be two peak trading periods in November 2021 and April-May in 2022. As of the beginning of November 2022, ENS has registered 2.62 million domain names, 573,000 registered users, and 508 ecological cooperation projects. These data are far ahead of many other similar projects. ENS will be airdropped + issued in November 2021. At the beginning of November 2022, its fully diluted market value will be about 1.5 billion US dollars.

ENS currently has no plans to directly expand to other public chains. The recent actions of the project party are mainly reflected in the connectivity of Web2 web pages, such as the aforementioned two Level domain name pages and their corresponding applications. In addition, ENS is also promoting the Sign-in with Ethereum (EIP -4361) new login method with Spruce ID, hoping to realize the connection of identity data through it, which is very worthy of attention and expectation.

For more details about Sign-In With Ethereum, see: login.xyz

While ENS and popularity are great, it is not flawless. ENS exposed the "ZWJ character problem" after it went online:

The ZWJ problem refers to ENS supports padding characters ZWJ - such as "%E2%80%8D" when registering, so that domain names that are not the same in substance can be presented with the same appearance. For example, "vitalik%E2%80%8D.eth" and "vitalik%E2%80%8D%E2%80%8D.eth" are displayed on the webpage as "vitalik.eth", which makes it difficult for users to copy and paste There is a risk of being deceived by "fake domain name" to realize the transfer by using a domain name.

Currently, this problem cannot be solved technically by ENS. It can only be patched by the application layer consciously. For example, Opensea and Metamask will give domain names with ZWJ characters Hit the yellow exclamation point. However, if ENS enters a large-scale promotion period, it can be expected that related fraudulent applications will inevitably appear. This has buried potential troublesome factors for the large-scale promotion of ENS.

Opensea's "yellow triangle" ENS domain

Web3 domain name registrar: represented by Unstoppable Domains

This kind of project Web3 domain names with multiple suffixes are often sold at the same time, and these domain name suffixes are often highly related to Web3. Representative among them are Unstoppable Domains.

Unstoppable Domains completed a financing of US$65 million in July this year, with a valuation of US$1 billion, which is close to the level of ENS. It also supports the registration of 9 domain names: .crypto/.nft/.x/.wallet/.bitcoin/.dao/.888/.zil/.blockchain. It is worth mentioning that, unlike most domain name projects that require annual renewal registration, Unstoppable is a permanent registration mechanism, so the fees for some rare domain names will also be more expensive.

The registration process of Unstoppble Domains is not completely on the chain like ENS and other projects, but a centralized registration management + NFT mint model on the chain: users in When registering, you can use Google login + credit card to pay, and then go to Polygon to get mint NFT (except for .zil domain names, go to Zilliqa to get mint).

Unstoppable Domains can pay by credit card when registering

After registering and paying, go to the chain mint

In terms of project development, Unstoppable Domains will also focus on the concept of "Web3 name", but its actual product design and publicity focus more on the experience of Web2 users, as well as the interoperability between its domain name and Web2 website. In terms of Web3 connectivity, in addition to the previously mentioned account name cooperation, Unstoppable Domains also launched "Login with Unstoppable", which is a button that is parallel to wallet login methods such as "Metamsk" after you click "Connect Wallet" , users can use this method to log in in cooperative projects such as yearn.finance. However, this kind of login cannot bypass the wallet at present, but requires an additional process of filling in the domain name, and the current user experience is not good.

Unstoppable Domains may not be particularly well-known in the Chinese circle, but its popularity overseas is very strong in overseas marketing. At present, the number of domain names registered by Unstoppable Domains has exceeded 2.7 million, and more than 500 applications have integrated Unstoppable Domains.

The main problem with Unstoppable Domains and similar projects is that the domain extensions they sell are not supported by an authoritative organization, so the ownership of those popular domain names is often There will be disputes. The problem of domain name suffix conflict is also a problem faced by this track, and the author will discuss it in the next chapter.

Social domain name applications: represented by Linkkey

This type of project may not have special innovations in domain name technology, but it focuses more on combining domain names with social applications.

Linkkey's SNS is one of the representatives, and it hopes to use the domain name as the carrier to do "value social networking" in the Web3 field. According to the theory that "one person can only maintain deep social links with 150 people at the same time", each SNS user can issue an NFT that symbolizes his social value, and the user's social value is determined by the market price. Linkkey’s token model design is also innovative. Its domain name registration function and some product functions have already been launched. Complete products will be available at the end of this year and early next year. Interested friends can go to its official website to experience and learn more.

2) Multi-chain domain names

NNS, .bit, and Space ID are of this type There are three main items. In the promotion and development of the project, they all emphasize the nature of "Web3 identity business card" and "Web3 identity management", and have written a clear multi-chain support plan.

However, on the issue of how to implement "multi-chain support", the three domain name schemes have their own characteristics. In the following, the author focuses on a brief introduction of their multi-chain implementation scheme.

.bit

.bit project party has The Domain Name System with the .bit suffix is introduced. The project team believes that the development of .eth, .bnb, .sol and other public chain suffix domain names may encounter some upper limit problems (especially new public chain domain names), because the core projects on other mainstream L1 public chains may be unacceptable and The domain name with the suffix of another public chain is used for cooperation. .bit is just a domain name suffix without a public chain label, which may have more natural advantages when conducting multi-public chain cooperation.

.bit is implemented based on the Nervous CKB public chain. This public chain cannot be regarded as a mainstream public chain in public perception, but it has unique properties ——It is specially built to realize the unified management of different public chain assets.

How to realize multi-chain asset management of Nervous assets involves some technical issues of cryptography principles. There is a relatively intuitive metaphor in its official documents, here is a brief description as follows:

If the ETH public chain and the BTC public chain are compared to the United States and the United Kingdom, the ETH address , BTC addresses are compared to ID cards in the United States and the UK, respectively. The current status quo is that residents must have a US ID card (BTC address) to hold and manage assets in the US (BTC), and the same is true in the UK (ETH). The two countries do not recognize each other's national identity card (address).

The Nervous public chain can be regarded as a neutral and open third country, which supports citizens of other countries to hold assets through ID cards of other countries, such as a BTC user sending Nervos CKB in the BTC wallet to issue assets, it can be regarded as a U.S. resident holding a U.S. ID card selling TA’s house in a neutral country, and this process has been officially recognized by the neutral country (verified by the Nervos CKB node).

NNS

NNS is Metascan.pro (Twitterscan The domain name system with the suffix .nft launched by the project party, currently mainly implements core functions such as registration and resolution on the Ethereum main chain.

Metascan's project team will launch NNS contracts on other public chains (such as BSC) in the next few weeks, so that users can realize domain names with lower GAS fees registration management. The NNS domain name systems on different public chains are unified. The specific realization of this "unification" may involve the deployment of some information cross-chain nodes, and may also involve some forms of centralized management.

Theoretically speaking, domain name cross-chain is not complicated, as long as the domain name resolution information on all chains can be unified through cross-chain nodes. But in fact, when multiple public chains are involved at the same time, maintaining the synchronization and real-time consistency of domain name registry information still faces many challenges under the current Web3 infrastructure. This is why most domain name projects currently only support one public chain. How NNS realizes this kind of cross-chain, its stability and degree of decentralization are worthy of attention.

Space ID

Space ID launched at BSC .bnb domain name. At present, as far as the domain name smart contract itself is concerned, its nature is highly similar to that of ENS. It only supports the communication and analysis of projects on BSC, and there is nothing very special about it. However, Space ID plans to launch a set of "Namespace" (NameSpace), to go to the domain name projects of the entire public chain, and even allow Web2 platform companies to issue their own domain name space. Instead of hoping that your domain name suffix can become a common name in the Web3 field like .bit.

This namespace can be roughly understood as follows: If a person holds Solo.bnb on BSC, then in the namespace of Space ID, it will hold There is bnb:solo; if he holds Solo.eth, he holds eth:solo in the namespace; even the account names of Apple and Google can be transformed into forms like apple:solo, google:solo, etc.

This vision is worthy of attention and expectation, but the part of Space ID that is already online is still far from this vision, and it may take longer iterations.

In summary, although most Web3 domain names regard identity management as a core narrative, once it involves multi-chain smart contract domain More complex technical details in chains and multi-chains. At present, .bit's multi-chain solution is the fastest in terms of implementation.

3) DNS domain name replacement: Handshake, Namecoin

Due to the centralized management of Web2 ICANN domain names, It has caused dissatisfaction among quite a few decentralized believers. Therefore, some people are exploring the implementation of domain name resolution for decentralized websites. The main vision of these two projects is to supplement and replace the Web2 DNS system.

Because their concept, development direction and most Web3 domain names are very different, and they have not attracted too much market attention recently, so this article will not focus on them. Interested readers can do their own in-depth understanding.

04. Reflections on the key issues of Web3 domain names

1) Analysis of user needs of Web3 domain names: current Not rigidly needed; transactions are mainly focused on short digital domain names

Although the author introduced the current application scenarios and uses of domain names in detail before, it has to be admitted that domain names are not the current Web3 Just what the user needs.

Even if the user does not purchase any Web3 domain name, it will not affect his normal Web3 application experience at all; Use it on a large scale for its social accounts (just like the author uses mtyl.eth), otherwise his perception is limited. Readers may wish to think about the use of domain names by themselves and those around them: what percentage of people have never bought it, what percentage of people buy it just for early adopters or investment, and what percentage of people really use his domain name on a large scale.

The author once made a statistics on the renewal/retention of ENS users through the data on the chain, and found an interesting conclusion: on August 20, 21 and before Active domains, on 8/20/22, 52% of domains were inactive. This means that during the year, 52% of the domain names expired (probably registered more years ago), and the original users did not renew, and no new users registered the same domain names in time. Taking the other 21 years for observation, the failure rate is basically between 45-55%.

Considering that the minimum registration period of ENS is one year, although this caliber can only show the situation of old ENS users who registered before November last year, it can also explain that less problem. Compared with many "outlet-type" application projects that are fleeting in the Web3 field, this retention status can be said to be quite good, and it can also reflect the nature of domain names as Web3 infrastructure and long-term growth with the development of the Web3 ecosystem; but from its absolute numbers Looking at it, this ratio is still not high, indicating that Web3 domain names are still not a rigid demand of users.

The author believes that the long-term development of the domain name project mainly depends on the development of the Web3 application ecology, especially the development of Web3 social projects. Because it is difficult to bring a fundamental large-scale increase to the entire field only by the domain name project itself in the promotion of application and wallet account names; only the vigorous development of application projects can highlight the account name system associated with the domain name , The importance of the identity management system, highlighting the value of the domain name itself. However, before that, the domain name project must make sufficient preparations, so as not to find that its core functions such as identity management, cross-chain solutions, and Web2 URL connectivity are still not mature enough when the real application wave hits. In addition, it is also a possible development path for the domain name project to end up as a social application or a login system similar to a wallet.

2) Analysis of Web3 domain name transactions: currently focusing on short numeric domain names

ENS is the most active transaction , The domain name project whose data is completely open, so its transaction situation is very representative.

In the ENS domain name transactions in the past three months from April 25th to July 7th, 2022, purely digital domain name transactions contributed 44% of the transaction volume, accounting for 65% in terms of transaction volume %; and in the subdivision of digital domain names, 97% of the transactions are short digital domain names with 3-5 digits, and 3-digit domain names account for 29% of the transaction volume with 1% of the transaction volume.

From the perspective of the development of each new domain name project, the short digital domain name is also the shortest digital domain name among many domain name categories, similar to 982.eth, 2089.eth, 12346.eth Wait, what is the value that deserves everyone's concentrated attention and transactions? The author believes that there are two main reasons:

Short digital domain names have strong potential brand value due to their readability and memorability. For example, when mentioning the numbers 58, 360, 4399, and 12306, readers who have used related products first think of the corresponding company name? In the field of Web2, using short numbers as the brand name of a company/business/product is a business logic that has been verified, and it may still be true in Web3. Short digital domain names naturally come with a certain scarcity and cannot be increased (unlike English abbreviations). For example, the maximum number of three-digit domain names is 1,000, and the maximum number of four-digit domain names is 10,000. Coupled with the emergence of NFT digital numbers such as BAYC and the corresponding concepts such as 10k Club, the value of this scarcity has also been verified. Now the floor price of a four-digit ENS digital domain name is close to 2ETH, and it is not ruled out that it will match or even exceed BAYC in the future.

In the Web2 field, there are a large number of cases where short domain names are sold at sky-high prices. When Web3 goes to the public in the future, can the short domain name of the head domain name project also be available? What about being sold for a sky-high price? This is indeed very imaginative. However, precisely because of this, whenever a new domain name project appears, there will always be speculative users who will preemptively register a large number of three-digit and four-digit domain names, and the project party is also aware of this. Some project parties will explicitly increase the registration fee for short domain names when registering, while some project parties will reserve short domain names and market them as a special commodity.

It is worth noting that the emergence of this speculative phenomenon also makes the issuance of domain names a "no-cost business" for the project party to a certain extent: only fork ENS contract, make an official website to write documents and draw cakes, and then you can expect speculative users to rush to register various "high-value" domain names, and charge a lot of registration fees (for example, if you refer to ENS, the three-digit domain name is 640 US dollars / year , $160/year for four domain names). As for whether the pie drawn by the project can be realized in the future, that is another matter.

Therefore, when users choose a domain name project, they also need to conduct more detailed investigations, and pay more attention to the actual progress of its application scenarios, including: supporting the domain name project The quantity and quality of domain name application projects, the progress and possibility of realizing the vision described by the project party (such as social presentation, multi-chain interoperability, Web2 web page support, etc.).

3) Prospect of domain name project competition pattern: the Matthew effect is obvious

Just from the price of domain name Look, the author thinks that the competition of different suffix domain name projects is a matter with a strong Matthew effect. When it is necessary to choose a domain name suffix, the domain name in the head will become the first choice of the rich and KOL, and this choice will further expand the value of the domain name suffix in the head. Therefore, there may be at most 1-2 domain names at the end of the head, and because domain names have stronger social attributes, their status will be similar to or even exceed that of the .com suffix in many Web2 DNS top-level domains.

At present, the .eth suffix of ENS is the most promising to develop into the head, but the ZWJ defect of ENS, lack of multi-chain support and other problems may affect the future Opportunities for competitors to catch up. Considering that even for ENS, its registration volume currently does not exceed 3 million, which is not high compared to the Web3 user base and the Internet user base, there is still some room for competition in this area.

One thing worth discussing is, will the detached position of the head domain name in the price make other domain name projects completely lose their living space? In Web2, in addition to .com, there are many other common top-level domains such as .net, .org, etc., but Web2 domain names are mainly to B, and the priority of business and brand value is higher. If the name of the domain name itself has extremely high symbolic meaning and brand value, then the priority of the suffix may be lower than that of an excellent and readable prefix. For example, if your company is called Silver Stars, would you like to register a silverstars123.com or register a silverstars.xyz as your website home page address?

But in the field of Web3, the application scenarios of domain names are mainly to C. Suppose your English name is Charles, and you and your friends are used to seeing Charles as your account name, but charles.eth has been registered on ENS, if each domain name has similar application scenarios and experiences, you are Would you rather register a name like charles2874.eth, or something like charles.gate? This is a difficult question to answer, and it may depend on the development of the head domain name in the future and the specific positioning of the user's mind. However, if the assumption that "each domain name has similar application scenarios and experiences" is not true, and the application support of the head domain name far exceeds that of the waist and tail projects, then obviously users will further gather towards the head domain name.

From a long-term perspective, the Web3 domain name may also become the rigid demand of every B-end project party just like the Web2 web page address. At that time, the logic of the domain name demand side Subject to change. But this not only requires the maturity and promotion of the domain name project itself, but also requires the matter of "registering a Web3 domain name - building a project homepage through the website address connected to the Web3 domain name" to become a certain practice and consensus. Judging from the current focus of the development of various domain name projects, this may still be a long way off.

4) The suffix conflict of the domain name project: the necessity of decentralization, the damage of user experience

The issuance and registration of Web3 domain names do not require the permission of a centralized authority, which is intuitively a good thing. But this also brings potential disputes and conflicts: If two projects open the registration of the same domain name suffix to users, how should they be resolved? After all, there is almost no threshold for making a smart contract imitating ENS and issuing NFT of a certain domain name suffix to the public.

This is a very thought-provoking question in the domain name field, because the reason why a domain name can be used as a "Web3 common name" is that it is on the public chain, or even the entire Web3 uniqueness within the system. If this uniqueness is compromised, the value of the entire domain name is compromised. Just imagine, if there are two .eth projects open for registration at the same time, and both have their own cooperative applications, which project's .eth domain name are you going to register? If a friend gives you a domain name instead of an address as the transfer target, do you still have to ask, is the domain name project supported by the wallet you are using now the same as the one registered by your friend? Obviously, this will bring great confusion to the identity system on the chain.

Intuitively, the issuance of domain name suffixes generally follows a "first come, first served" principle, and the domain name project that starts the corresponding business first can obtain the control of the corresponding domain name project first. Later projects are more like a copycat and should not be accepted by the mainstream community. For example, if the author now copies the ENS contract and issues the exact same .eth domain name on Ethereum, it is hard to imagine what kind of users would know the details of the two projects without using fraudulent means such as phishing websites. Will come to pay to register the .eth domain name issued by the author.

However, things are often not that simple, because the two projects may not be on the same public chain, and the judgment of "before/after" business development may not be clear. The business focus of the project may also be different, and the users attracted at launch are also different. Therefore, in the early days, the consequences of this conflict were not obvious, and the two projects could be developed at the same time. For application project parties, how should they solve related cooperative support issues?

A recent controversy in the domain name field is that the . Domains, the latter publicly sold .nft domain names in the market before the former, and has registered the ".nft" trademark in Hong Kong. But in fact, the .nft domain name NFTs issued by NNS and Unstoppable Domains are not on the same public chain, and the business focus of the two is not the same. It is not the relationship between imitation and imitation; from the perspective of trademark infringement, NNS It also registered the ".nft" trademark in Japan, South Korea and other countries and regions earlier, so the rationality of Opensea's removal of NNS is actually open to question.

This is not the first time that Unstoppable Domains has clashed with other domain name projects on suffix issues. On .coin, .wallet and other suffixes, Unstoppable Domains has been in conflict with other projects There have been conflicts, and at the end of the conflict, either one side voluntarily backs down, or it relies on lawsuits and US court rulings. This is ironic, and it is ultimately resolved by the US government system. Isn’t it back to the old centralized path similar to Web2 ICANN?

However, if you do not rely on this centralized solution, and completely allow projects with the same domain name suffix to develop freely on the chain, how can you solve potential conflicts in the future? Like the ZWJ problem of ENS, is it up to the application side to make additional annotations for different project parties with the same suffix? Or is it building an organization similar to DAO, hoping that various domain name project parties can coordinate and build a decentralized "Web3 ICANN"? These issues are the focus of concern and discussion for users both at home and abroad who are concerned about the domain name field.

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