Company raises funds that could be used to fight legal battles and bid on the next round of new top level domains at ICANN.
Unstoppable Domains has raised a $65 million series A funding at a $1 billion valuation, the company announced today.
The company provides blockchain-based domain names ending in extensions like .crypto, .nft, .bitcoin and .wallet.
These domain names don’t work like traditional domain names in major browsers. Users have to download special software or make changes to their browsers in order to access them.
Unstoppable initially marketed the domains as a way to build an uncensorable website, hence the name Unstoppable. But it has changed that messaging over time to capitalize on the NFT craze and a better use for the domains: wallet addresses and digital identity.
Creating a blockchain-based website is complex, and few people truly have to worry about censorship. But easy-to-remember crypto wallet addresses make sense in the same way traditional domains do. Traditional domains are much easier to remember than the IP addresses that point to websites, and blockchain domains like example.crypto are easier to remember than long wallet addresses.
Unstoppable says it has registered 2.5 million domains. It’s unclear how many of these are paid as the company has done multiple promotions. However, in a recent lawsuit, it said it has earned $5 million from selling domains under the .wallet extension.
That lawsuit brings up a significant challenge to its business model, however. It is suing a company that’s providing the technology for people to register .wallet domains in the competing Handshake blockchain domain system.
Unlike traditional top level domains at ICANN, there’s no single arbiter for who gets to run alt-root, blockchain-based domains. So multiple people can start the same exact extension.
Unstoppable says this is causing “chaos” and could result in the misrouting of cryptocurrency payments.
The company is turning to trademark law to try to prevent others from running extensions that match the ones it has started. That might be an uphill battle; unstoppable has failed in most of its attempts to register top level domains as trademarks.
And when ICANN releases its next round of top level domains, companies will likely apply for many of the names Unstoppable is operating now. Even if those are primarily used for websites rather than wallet addresses, it could create conflicts. For example, the competing Ethereum Name Service allows anyone to connect a traditional domain name to it to serve as a wallet address or digital identity.
Unstoppable now has something working in its favor, though: a $65 million war chest to fight competitors, grow its user base, and, perhaps, bid on domains in the next round of “real” top level domains at ICANN.
Jovenet Consulting says
I fear they’ve just opened the Pandora box. Not only they cannot secure trademarks (dixit the ICANN new gTLD guidebook) but also, the number one thing a new gTLD applicant must NOT do at all costs, is to announce the TLDs it plans to submit an application for. I already imagine some would submit an application…just to “compete” to generate more than their submission cost in an auction. This has been a long debate for the past X years. The ones to generate money in the next round will need to come with something more than just domains and innovative business models. This reminds me Google who applied for the .AND new gTLD. These guys did not even read the applicant guidebook. If you want to spend money on new business models in the next round…call us.
Fancy that, a valuation of exactly one billion dollars. I would love to read the term sheet on that, bet it never becomes public.
Andrew Allemann says
Yeah, definitely some liquidation preferences on that one
“Chaos” and name collisions are part and parcel of the alt-root world, as ICANN’s CTO points out in this white paper – https://www.icann.org/en/system/files/files/octo-034-27apr22-en.pdf
It happened last time, in the alt-root wars of the dot-COM boom, & ended up in the courts where the case law (taken all the way to the 9th circuit) makes it clear – TLDs can’t be trademarks.
TL;DR – a TLD can’t be a distinctive mark of your business, if your business model is to sell second level domains, which will be used as the distinctive mark for 1000s of other businesses – becuase each & every one of those SLDs will include your TLD.
Apple do not sell the suffix “Apple” for other people to use as a trademark for a reason.
It literally contradicts the very definition of a trademark.