End users are buying .xyz domains. How did we get here, and what happens in the future?

Marketing planted the seeds for today’s interest in .xyz.

Yesterday, Square announced it was rebranding its corporate umbrella to Block and chose the domain block.xyz for its website. Block also uses spiral.xyz for one of its operating businesses.

If you’re suddenly surprised that companies are using .xyz domains, you haven’t been paying attention this year.

Domain investor Swetha Yenugula has been selling .xyz domains like hotcakes all year. You know the first reaction I got when I started posting her sales? Publicly and privately, people called B.S. How was this person selling all of these .xyz domains for four and five figures? Hats off to Swetha for having conviction and investing a lot of money before .xyz became what it is becoming today.

On the surface, .xyz isn’t that great of a domain. Sure, it looks edgy. Being the last three letters of the alphabet is interesting but has limited use cases (see Google rebranding to Alphabet). It’s also a long domain (when spoken) at three syllables. And Z is pronounced differently in lots of English-speaking countries. Many people snickered when Daniel Negari decided to go all-in on this extension.

The team at XYZ set the stage for this, though. I don’t like all of its marketing activities….the domain stuffing and cheap domain sales to look very successful before it was, for example.

But if you look closer, XYZ has been doing a lot of smart things. It got influencers to switch to .xyz. It spent a lot of time highlighting companies and people using .xyz. It marketed at tech events like SXSW.

Ultimately, the community decides which TLDs are successful. The people who pick domains for their websites decide this. And like .io, a lot of people have decided .xyz is a good choice. XYZ planted the seeds and some of those sprouted. Once they sprout, the new seeds blow around and spread.

Blockchain companies seem to be particularly interested in these domains, and blockchain is having another moment.

Now, there’s a lot of risk to investing in .xyz domains. Who knows where this will all be in a few years. I guess if you believe in blockchain, you should believe in the momentum here. If you think that’s all going to crash, you have to ask yourself if other companies will pick up the mantle. (And I don’t mean to suggest that it’s only blockchain companies using .xyz; it just seems to be driving momentum this year.)

The .xyz surge seems to be built on more than what we saw from .club at the beginning of the year. That was built on the hype for one new platform, Clubhouse. It was also stoked by people trying to sell newbie domain investors on an expensive course. That platform ended up nosediving and those course sellers don’t have a course to sell anymore.

Investing in new top level domains comes with risks, just like all investing. You have to ask yourself if current .xyz prices give you the opportunity for a return. You have to ask yourself if prices will keep increasing. At Sav.com auctions, unknown.xyz is $2,750 and favorite.xyz is $1210 right now, and will surely sell for more when they close. Will these look like bargains years from now, like old .io sales seem now? I don’t know.

This is a lot of fun to watch.