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Blockchain domains and the big challenges they face

by — Services 14 Comments

It will take a lot to overcome the challenges of previous alt-root naming attempts.

Graphic with white boxes on a black background and the word .blockchain in orange text

Right now, there’s a lot of talk about blockchain-based, decentralized naming systems.

The pitch for blockchain-based domains usually covers two things.

First, these domains can be used as easy-to-remember wallet addresses. Much like how domain names are easier to remember than IP addresses, blockchain domains are easier to remember than a long wallet address. They can also be used as your “web3 username”. This makes sense. But since you probably don’t advertise your wallet address, perhaps we should compare this to someone remembering your email address with a domain name rather than digits.

The other key selling point is that these domains can’t be censored because they are decentralized.

I’m less sold on this pitch for a couple of reasons. First, how many people out there are having their domain names or websites censored? Not that many.

I think we’d see a lot more of these sites on the dark web where they can’t be censored.

Oh, but it’s hard to find sites on the dark web? Well, that’s the main drawback to blockchain-based domains for websites. People have to use special plugins or niche browsers to access them. We’ve seen plenty of alt-root domains come and go, and they’ve all failed not because people don’t like the extensions but because creating a site on a domain few people can access is futile.

There’s a reason things are somewhat centralized. You might not like this, but going the extreme opposite of decentralized has its drawbacks.

A discussion about blockchain domains usually covers three competing standards/companies: Handshake, Unstoppable Domains, and Ethereum Name Service.

Handshake is an interesting play. It’s decentralized at the top level, so some companies and people have created top level domains in Handshake that they offer as second level domains to other people. Which…kind of defeats the point because it’s not decentralized at the second level. Namecheap is selling Handshake domains like .creator, .oo, and .p. You’ll pay around $15-$35/year for these domains. So you are getting a blockchain-based domain that you’ll pay renewal fees on, and hardly anyone can access it. Another challenge is that with so many top level domains, none will gain general recognition and it will be harder for people to recognize them. This has been a problem with the new TLDs that came out nearly a decade ago.

Unstoppable Domains is a venture-backed company with an approach most like previous alt-root players. It has created extensions like .crypto, .wallet and .nft. The biggest issue with this model comes along when the next round of main-root top level domains is launched. You can bet that multiple companies will apply for these popular extensions, thereby creating name collisions. And while Unstoppable thinks it has an approach to win these “real” domains based on trademarks, history tells us this won’t be enough. So unless it comes up with the 9 figures that will probably be necessary to win these domains at ICANN, it’s going to have a bunch of upset customers down the line. (Someone typed in my domain name and went to another website!)

Ethereum Name Service (ENS) is the most interesting to me. The organization created .eth and stopped there. Rather than introducing new extensions, it decided to add functionality to work with existing main-root TLDs. So if I register example.com, I can use this as a wallet address and people can actually visit my website. Sort of the best of both worlds, despite a few technical hiccups. One hiccup is the gas fees required to claim a name or even change your nameserver. Imagine if your registrar charged you every time you switched nameservers! ENS is working on solutions, but it’s just one example of the challenges of operating a decentralized namespace.

One big thing ENS has going for it is name recognition. I’ve started seeing many people in the blockchain space change their Twitter names to example.eth. It’s kind of like the laser eyes of a year ago. It’s this sort of recognition that helped Bored Apes take off. So it’s a nice signal and creates buzz. That is, of course, not enough to ensure its long-term success. But I think, overall, ENS is the most pragmatic of the three options I’ve written about.

I’m sure many people will disagree with this analysis. I welcome your input, especially about how these new naming conventions can overcome their challenges.

NFTs trip up Uniregistry’s top level domain auctions

by — Policy & Law 7 Comments

A marketing stunt gone horribly awry?

Image of digital artwork with NFT letters standing for non-fungible token

Frank Schilling’s top level domain company UNR auctioned its 23 top level domain names at the end of April, grossing more than $40 million. To date, none of the TLDs have transferred to the winning bidders.

The holdup is due to what seemed like a marketing stunt to take advantage of the popularity of NFTs.

Prior to the sale, UNR created NFTs connected to Ethereum Name Service for each of the top level domains and said the winners of the auctions would also get an NFT. In a press release, it wrote:

As the exclusive operator of 25 ICANN-accredited domain extensions, including .LINK and .GAME, UNR holds the NFTs that control their namespaces in the Ethereum Name Service (“ENS”) on the Ethereum blockchain. UNR’s Top Level Domains are the first to be turned into ERC-721 NFTs on Ethereum.

23 of these Top Level Domains and their corresponding NFTs will be sold together in no-reserve public auctions on April 28, 2021…

The auction winners of these rare internet assets not only collect subscription revenue by selling their domain names through ICANN-accredited registrars, but could also sell domains on ENS directly to Ethereum owners.

In response to a demand from a winning bidder to complete the TLD transfers, ICANN says it is still waiting for answers from UNR. In a Request for Reconsideration from the buyer for .hiphop (which was sold outside of the auction), ICANN includes a notice dated December 10 stating it continues to object to and withhold ICANN’s consent to all of UNR’s pending assignments. It says it has been trying to get additional information from UNR since May, but the answers have not been complete:

From our first request to UNR for additional information issued in May 2021, we sought to understand the impact of the transactions on the Domain Name System (“DNS”), including how Non-Fungible Tokens (NFTs) created on the Ethereum Name Service (ENS) were being used, and were involved in the transactions. ICANN repeatedly asked UNR for documentation or other information related to NFTs in the hopes that UNR would provide fulsome and complete responses. Only after ICANN’s repeated requests for the transaction and auction related documentation did UNR begin to provide such documentation in October 2021…

…As an example, it has been unclear how such public statements as “the winner of each TLD will receive ownership rights to the Top Level Domain asset…[and.]…the NFT representing their TLD on the ENS” so they could “control the entire TLD namespaces on DNS and ENS” were to be evaluated against the incomplete requests for assignment. As we have communicated to UNR, these statements may not be consistent with important ICANN community-developed policies and agreements that govern registry operations which clearly state any registry operator would have no property ownership rights or interest in a TLD. Further, the creation of such NFTs and potential operation of a suffix identical to the top-level domains in the DNS in an alternate name space may create risks to the security or stability of the TLDs in the DNS.

I suspect that few — if any — bidders care about the NFTs. But the NFT and ENS connection are keeping all of the transactions from completing. This is especially problematic given that the year is ending, and I suspect many applicants hoped to receive their TLDs by the end of the year for tax and business purposes.

It will be interesting to see how long it takes to resolve this and if TLD operators can get ICANN’s blessing by disowning the NFT part of the transactions.

[Note: the original version of this story said that .hiphop was acquired in the auction. This TLD was actually sold outside of the auction.]

Ethereum Name Service – DNW Podcast #358

by — Podcasts 1 Comment

How to connect “regular” domains with Ethereum Name Service.

The words "Ethereum Name Service" in white letters on a black background with the words "DNW Podcast #358"

There are a handful of competing blockchain-based, alt-root domain name systems popping up. One of these made a big announcement recently: it now works with any second level domain on the “real” DNS. Brantly Millegan aka Brantly.eth, director of operators for Ethereum Name Service (ENS), comes on the show today to talk about how you can use example.com, example.guru and other second level domains with ENS in addition to alt-root .eth domains, and the benefits of doing this.

Also: Closing time at the .club, Facebook, country code domains and more

Sponsor: Sav backordering

Podcast: Play in new window | Download (Duration: 26:29 — 21.2MB) | Embed

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Ethereum Name Service (ENS) now works with all second level domains

by — Services 2 Comments

Now your .com or .whatever address works with ENS.

Logo for Ethereum Name Service has a stylized circle with ENS letters

ENS now supports regular domain names.

Last week, Ethereum Name Service (ENS) expanded its capabilities to work with any second level domain. This means owners of .com, .net, .money, et al. domains can now use their domains as a wallet address in ENS.

This makes a lot of sense. Domain names were created because it’s easier to remember words than IP addresses. Similarly, ENS makes it easier to remember long wallet addresses.

ENS launched by selling .eth addresses. So, you could use a domain like mycoolname.eth as your wallet address. Now, rather than expand to other pseudo-TLDs in addition to .eth, ENS will instead support domains registered on the main DNS. ENS’ creators say this has been in the roadmap since 2017.

ENS already worked with select domains such as .XYZ. The new functionality means that any second level domain will work.

Importing a domain involves enabling DNSSEC, adding a TXT record, and registering the name on ENS. This last step requires paying the Ethereum network gas fee. Fees are currently rather high, and the fee might be about $300. ENS says it’s working to reduce this fee, and it’s also possible that gas fees will fall in the future.

There are some differences between using .eth names and standard second level domains for your wallet, including the security of the namespace.

.Kred launches as dual DNS and ENS domain

by — Services 8 Comments

Kred takes a different approach to integrating DNS with blockchain.

Picture of a woman standing in the street with "jessica.kred" below it, and icons indicating that a website and wallet are connected

.Kred is the latest domain name to integrate with blockchain technology, and it’s taking an approach that’s different from other domain names.

The domain name is a closed top level domain name under ICANN’s new top level domain name program. Kred, a company that assigns social media scores to influencers, applied for the domain name as a dot-brand.

Dot-brand domains come with restrictions, but Kred is using this to its advantage in its blockchain implementation.

Users who register a .Kred domain name will be able to use them for websites on traditional DNS and on Ethereum Name Service (ENS), making it easier for people to send payments to them. They can send cryptocurrency based on the easy-to-remember .Kred domain rather than a long string of characters. It’s a similar concept to using domain names in place of IP addresses.

Here’s where the restriction of dot-brand domains plays to Kred’s advantage. Dot-brand domains can’t be sold through traditional registrars, so Kred can more tightly control the experience. Because nameservers can’t be changed at the registrar, Kred will be able to ensure than DNS and ENS records are synchronized. (Registrars will be able to offer .Kred registrations through a reseller API.)

Kred explains the benefits of this approach:

When a Kred Domain is registered, an ENS Kred Domain Token is generated and deposited into the user’s wallet, granting its holder access to control the name on both ENS and DNS. The Kred Top Level Domain Registry maintains a daemon that monitors the Ethereum blockchain and looks for updates to the DNS information stored against .Kred ENS tokens.These changes are validated, and then automatically propagated through to the .Kred DNS server infrastructure with no further input needed from the token holder, within a minute of the transaction being written to the blockchain. The .Kred DNS servers effectively act as a cache of the EthDNS information.

MMX, another domain registry, offers an ENS integration with .luxe. But .luxe is a traditional top level domain, so it involves more work to connect it to a wallet than .Kred. It also means that the wallet address could become out of sync with the domain owner if the .luxe domain is ever sold.

Compared to ENS’ .eth domains, both .luxe and .Kred can resolve to websites in any normal web browser.

“Kred is doing really innovative work combining DNS and ENS,” Brantly Millegan, Director of Operations for ENS, told Domain Name Wire. “This is a great step toward our goal of leveraging the Ethereum blockchain to complement and expand the usefulness of DNS.”

Another interesting aspect of .Kred is that the original registrant of a domain can receive a royalty when the domain is sold in the future. This twist could provide more liquidity in the aftermarket, should one develop.

Over 300,000 people have registered for a Kred score since its launch in 2011. About 6,000 of those people paid for a premium account, and each of them has already been granted a .Kred domain name.

Brands can pre-register .Kred domain names at Domains.Kred through March 20. Starting March 20, about 2,500-3,500 premium domains will be auctioned on digital asset trading platform OpenSea. General availability at Domains.Kred begins April 20.

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