[CPWG] Need Advise: Tokenization of Domain Names

[John McCormac]

On 27/09/2023 13:59, gopal via CPWG wrote:
> Dear All,
> 
> Domain names have been a valuable asset for nearly 50 years. However, 
> the lack of liquidity has been a challenge for domain owners.

No, it has not. Millions of domain names are deleted each month and 
millions more are registered. A potential registrant has a greater 
selection of gTLDs and ccTLDs than ever before.

> Tokenization could provide a solution to this liquidity issue. By 
> tokenizing domain assets, owners can sell off interests in their 
> domains, building liquidity from assets that would otherwise remain idle.

Approximately 8.5% of the .COM is on sale. The combined percentage for 
all gTLDs is around 7.34% (September gTLD Website/IP survey.)

Joint/shared ownership has been going on for well over a decade. The 
domain name sale business has been around since at least the mid 1990s.

A domain name doesn't have to have a website to be in use. Someone may 
be using it for e-mail. Many domain names are registered for brand 
protection purposes. There are also various business models that will 
park undeveloped domain names with Pay Per Click advertising. They 
theoretically make money from these PPC ads. Other models reregister 
deleted domain names and sell or auction them. What may appear to be 
unused may actually be in use.

Between 50% and 56% of new .COM registrations renew after their first 
year. The domain name business isn't an unchanging monolith. It is more 
like a slowly moving glacier in terms of deletions and new 
registrations. Hundreds of millions of gTLD registrations that were once 
registered and then deleted have not been reregistered.
> Need advise on ICANN Remit pertaining to new crypto-themed top-level 
> domains which could potentially increase the value and liquidity of 
> domain assets.

They are outside of ICANN's remit and ICANN has no control over these TLDs.

There have been sales of IDNs but they are rare. Tokenisation seems to 
be a solution without a problem.

There is also a feasibility issue in that the agreements between those 
who wish to tokenise a domain name would have to have a binding 
agreement between the parties. Who or what would be the registrant of 
such a domain name? Perhaps ICANN could have some input on the natural 
person versus legal person aspect of such a registration if it involved 
gTLDs.

Regards...jmcc
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