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ICANN explains its side of UNR registry transfer holdup

New “contractual-right-counter-parties” still waiting for transfers.

Graphic that states "top level domains" on a white circle inside a blue background

ICANN published an explanation last week for why it still hasn’t approved any UNR registry transfer requests from last year.

Frank Schilling auctioned off his 23 top-level domain names for over $40 million at the end of April. To date, ICANN hasn’t approved a single transfer to the new “owners.”

I use “owners” in quotes because that is one of the holdups. In its explanation, ICANN General Counsel, John Jeffrey, and SVP of Global Domains and Strategy, Theresa Swinehart, write:

The marketing materials and other communications associated with the UNR auctions indicated that the potential assignees would receive ownership rights, possibly denoting some form of property right or interest…These assertions raised questions and concerns during our review, particularly with regard to ownership, as TLDs are not considered property.

Technically, you’re getting a contractual right to operate a top level domain. But they are treated like property by their operators, and I can’t think of any marketing material for new top level domain applicants that has said, “We’ll help you get the contractual rights to operate a namespace on the web!”. Tell dot-brand owners they don’t actually “own” their top level domain. There’s a difference between how things are marketed and what the contracts technically say.

As I’ve written about, the other issue is a marketing stunt that backfired. You’ll recall that, around the time the auctions were held, adding NFT to anything instantly grabbed attention. (It still kind of does.) So UNR said auction winners would also get an NFT of the top level domains that control their namespace in Ethereum Name Service (ENS).

It was a silly marketing stunt, and one made moot by an update to ENS last year. ENS now works with all top level domains, so ENS would not make its own version of, say, .hiphop.

ICANN said it has been informed that the NFTs have been destroyed. It writes:

This only serves to make the issue more confusing since the NFTs were marketed as enhancing the value of the offering, but now are set out as unimportant and of no value.

Again, this was a marketing stunt to attract attention to the new TLDs. I’m sure anyone other than a lawyer would see this.

The backers of .hiphop have been vocal about the delay, but I imagine other buyers are upset that the transfers were delayed beyond the calendar year.

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  1. Tom Barretttom barrett says

    There is a lot of confusion here.

    The Ethereum Naming Service has limited its namespace scope to all ICANN TLDs, along with its own .ETH TLD, which is a reserved ICANN string that is not likely to be unreserved by ICANN in this decade.

    ENS has experimented with how best to support ICANN TLDs and second-level domains. There preferred method is that second-level domain registrants simply claim their corresponding ENS address. In this instance, the ENS address is always controlled by the ICANN SLD registrant. We’ll call this the ENS Preferred claims process.

    But if a TLD registry really really wants to, it can claim their entire ENS namespace, whereby the entire zone would stay in sync. This is what .LUXE did a few years ago. This option is still available for any ICANN TLD, including .HIPHOP. Let’s call this the ENS Legacy claims process.

    The NFT’s included in the Uniregistry auction were something else. These NFT’s were simply a smart contract from ENS that would have streamlined the Legacy claims process described in the previous paragraph. It was a marketing gimmick to hype the Uniregistry TLDs.

    So, destroying this marketing NFT simply eliminates the streamlined claim process. TLD Owners can still utilize the Legacy claims process whenever they want to. But again, ENS prefers you use the SLD Preferred process.

    Make sense?

    The bigger issue is this, why is ICANN worrying about all this? What other value-add registry services will they complain about next?

  2. Tom Barrett says

    A registry service needs approval if it can only be provided by the registry and no one else. The first ENS addresses available were actually .xyz SLDs that were claimed by registrants. The .xyz registry was not involved. Then .LUXE came along. Perhaps .LUXE should have required approval. But now, ENS is configured so that any registrant in any ICANN TLD can claim their ENS address (provided the TLD uses DNSSEC at the root).. So, a registry today would not need ICANN approval since SLD registrants can simply do it themselves.

  3. Brantly Millegan says

    I really wish ICANN would respond to my messages and/or reach out to me at ENS (I help lead the ENS project). We could explain all. I think there’s a lot of confusion and mistaken assumptions going on here that could be solved with a simple conversation. Instead, ICANN seems to keep on moving forward with incomplete information.

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