[CPWG] Need Advise: Tokenization of Domain Names

Thu Sep 28 11:44:02 UTC 2023

Dear Dr. Gopal,

you are literally peddling domain scalping. But you aren’t preaching to the
choir in this group. At NamesCon (a domainers conference) you would.

The third link „Busting Domain Name Secondary Market Myths” by my very good,
personal friend Zak is a good example: it entirely pertains to LEGACY TLDs
such as .com and .de: these have “quasi-monopolies”. In Germany for example
you are literally forced (by the market and user behavior) to have a .de
domain. Even one of the most “American” brands on the planet (one of the few
U.S. made cars that manages to get sold in Germany) saw itself forced to use
jeep.de – instead of jeep.com/de or something. In Germany you MUST use “.de”
– or you look entirely stupid. That amounts to a “monopoly”.

In monopolistic name spaces such as .com or .de the rules are different:
they already HAVE ample brand awareness. When a small percentage of domains
is held hostage for ransom: it doesn’t hurt the TLD brand itself.

Regarding any proposed “tokenization”: The legacy TLD namespaces are all
established – nothing will change there. We are obviously talking here about
future, new gTLD namespaces. And there you can throw all the legacy TLD
rules into the trash bin – because when starting out, a new gTLD namespace
has a gTLD brand awareness of literally “zero”: neither prospective
registrants (not domainers, real registrants that use the domain for real
websites that provide actual benefit to the user: not “parked sites”) nor
the Internet user know about the gTLD. And mass grabbing of its new
namespace is a severe problem that “kills” that gTLD brand.

I try to explain this problem via a real-life example:

This is the base problem Dubai faced back in the 1960s: they started out as
a "void". Just sand and a few roads and big dreams. They started to sell
their land to builders – expecting them to BUILD something that enhances the
Dubai brand. Imagine Dubai had been a freshly minted new gTLD such as .info?
People had seen the "Dubai vision" - and had bought all the premium property
(land): just like in .info (at times there where some 7 Million .info
domains registered). But what then? Almost none of the "property" (in a
gTLD: domains) suitable for business, leisure, hotels, restaurants,
apartments, work spaces etc would have been utilized for the intended use:
they would have just laid there abandoned. Who then would have wanted to
visit Dubai? To make business there? What would have served as "ambassador"
for Dubai? Dubai had been the same void of empty sand: just now owned by
many investors.

And that's what happened first to .info in 2001, then to almost all new
gTLDs in the 2012 round:

All premium space (generic keywords, 1, 2 and 3 letters versions, etc)
snooped up by "domain investors, rendering the brand new gTLD brand ".info"
void of any "brand ambassadors" with impact. A Dubai where all hotels, bars,
restaurants, malls, etc have not yet been built, no apartments or office
space is for lease - because the property owners haven't built buildings
(just have all billboards erected with advertising).

Dubai solved the problem elegantly:

You only got a property when you promised to build something useful. Like a
hotel, apartment building, office building, etc. If you defaulted - your
property was taken from you. As a result Dubai quickly evolved to the
shining, rising star with all its attractions of today! A "managed space".
.info in opposite was unmanaged - and way too cheap. All land was taken by
people who never used it. Either for speculative or defensive reasons. An
empty void – hostile – nothing to see – unknown to the general public – no
gTLD brand ambassadors (websites with an impact) existing.

In new gTLD namespaces the mass-grabbing of all generic namespace results in
a catastrophe: that gTLD brand is only being promoted by domains that are
visible and cerate real benefit for the Internet user. If all generic names
are held by speculators – who then shall promote the TLD brand? I mean:
promote the brand to the common Internet user? It’s a Dubai where ALL the
land is owned by speculators – and not used for anything. On top: most
domainers won’t even sell their loot for 5 to 10 years in a new gTLD – they
are “waiting” that “others” create brand awareness for the gTLD brand.

“Domainers” are very proud about their business. We could start to argue
about their value contribution in legacy spaces. In some cases, their
activities might be inevitable. In many cases not. Example: someone reads in
the news that a University started a non-profit project named “something
cool” (placeholder). Then a domainer quickly registers “somethingcool.com” –
hoping that the project will become a for profit spinout. Now a few months
later the spinout is being formed – and ransom has to be paid for that
domain. There is hardly ANY “contribution” by the “domain investor” here.
It’s just plain old highway robbery. Do you support such activity?

In new gTLDs mass domain-grabbing is the death dagger for that entire
namespace.

Btw: Domains are commercially viable since 1994/1995 – 28 to 29 years. And
no: in February 1986 nobody could waltz into Jon Postel’s office and
“register” a .com domain. By Feb 1986 only 8 .com domains were registered in
total: hand selected for 8 members of the DARPA project, such as Xerox or
Northrop. .com domains became easily accessible to the greater public only
by 1995 – before that time it was very tedious to get a .com, and you were
supposed to own only ONE .com domain per person. Guess why? To prevent
grabbing! Domains are a “commercial asset” for less than 30 years. In the
infant years the TLD space was at least to a degree “protected”. By the time
it opened the floodgates it already had all the necessary gTLD brand
awareness. That’s the main differentiator between the evolvement of .com or
.de – and the failure of for example .info: Many domains registered – zero
brand awareness – zero real life impact – nothing there for the Internet
user. .info had the chance to be what .net or .org are now. It could have
been a real .com-hunter. Instead, it is a Dubai without any development:
just sand and a few roads. And lot’s of sold property – undeveloped. And
many, many “for sale” signs and billboards. Hurra!

The effort to extend the DNS in the future is not the right place for “asset
tokenization” to “enhance liquidity”. Do that in .token or .crypto. Not in
.weed or .chicago.

Danke,

Mit freundlichen Grüßen,

Alexander Schubert

___________________________________

Alexander Schubert

LinkedIn.com/in/alexanderschubert

U.S. +1(202)684-6806

Germany +49(030)8643-7863

From: gopal <gopal at annauniv.edu> 
Sent: Thursday, September 28, 2023 12:27 PM
To: 'CPWG' <cpwg at icann.org>; alexander at schubert.berlin; b_jouris at yahoo.com
Subject: Re: [CPWG] Need Advise: Tokenization of Domain Names

Further to the mail in the trace and a separate mail from Bill Jouris:

Thank you again for the nice replies.

I am taking the liberty of including the following links to discussions on
this thread:

#1:

Domain Name Liquidity: What is It, Where Was It, Where Will It Be?

 <https://www.domainsherpa.com/dnseattle-2016/#video>
https://www.domainsherpa.com/dnseattle-2016/#video

DNSeattle took place on Thursday, May 12, 2016 at GoDaddy’s headquarters in
Kirkland, Washington

#2: [My Choice MOST USEFUL]

Brief History of the Domain Name System 

https://cyber.harvard.edu/icann/pressingissues2000/briefingbook/dnshistory.h
tml

#3:  

<https://circleid.com/posts/20210218-busting-domain-name-secondary-market-my
ths> Busting Domain Name Secondary Market Myths

<https://circleid.com/posts/20210218-busting-domain-name-secondary-market-my
ths/?fbclid=IwAR1R6ct8o34aynmu3VgvTVN9sKI0hefdDpSkWbvvy2SseYpqNXv-_Hzb05o>
https://circleid.com/posts/20210218-busting-domain-name-secondary-market-myt
hs/?fbclid=IwAR1R6ct8o34aynmu3VgvTVN9sKI0hefdDpSkWbvvy2SseYpqNXv-_Hzb05o

#4:

Liquidity is a trade-off between the price at which an asset can be sold,
and how quickly it can be sold. Is the subject line of this mail thread a
Web3 Issue?

Are domain names a liquid asset? at:
https://www.youtube.com/watch?app=desktop
<https://www.youtube.com/watch?app=desktop&v=o3wyP2vApU0> &v=o3wyP2vApU0

 <https://www.youtube.com/watch?app=desktop&v=o3wyP2vApU0> 

 <https://www.youtube.com/watch?app=desktop&v=o3wyP2vApU0> Are domain names
a liquid asset?

https://chriszuiker.com/surveyAre domain names a liquid asset?The best
domains have more liquidity and will always be in demand. If you have a
lower level d...

www.youtube.com

Your thoughts...

Sincerely,

Gopal T V

0 9840121302
 <https://vidwan.inflibnet.ac.in/profile/57545>
https://vidwan.inflibnet.ac.in/profile/57545
 <https://www.facebook.com/gopal.tadepalli>
https://www.facebook.com/gopal.tadepalli
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Dr. T V Gopal
Professor
Department of Computer Science and Engineering
College of Engineering
Anna University
Chennai - 600 025, INDIA
Ph : (Off) 22351723 Extn. 3340
       (Res) 24454753
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

  _____  

From: CPWG <cpwg-bounces at icann.org> on behalf of alexander--- via CPWG
<cpwg at icann.org>
Sent: 28 September 2023 14:11
To: 'CPWG' <cpwg at icann.org>
Subject: Re: [CPWG] Need Advise: Tokenization of Domain Names 

Hi Roberto,

“just the liquidity issue itself.”

There is no “issue” at all. Not for the Internet User – not for the
legitimate domain owner. A domain registration is to route users to a
website or route emails. No “liquidity” needed.

The only people on this planet who have a “liquidity” problem with domains
are those who hold domains hostage for ransom: these people have a budget
and invest their budget into domain registrations. Once the budget is used
up – they can’t invest anymore. They also can’t simply sell any of their
domains – because who wants to by “cochapella.com” at gun point? Nobody –
but a future fashion brand, a future restaurant or maybe a music festival?
You register the domain today – and in 10 years someone wakes up with the
idea for that brand – and needs your domain. It is an “asset” only in so
far, as in the far future maybe someone needs it for a legitimate business.
The tokenization idea is now to say that the owner of the domain may sell
“virtual shares” of it – thus already recoups some of his invested funds –
in order to grab even more domains.

In other words: Any system or tool that would reduce the “pain” of
“liquidity”-absence would lead to even MORE domains held hostage for ransom.
That would mean: legitimate domain users have less unregistered domains to
chose from. And the Internet user will see more trucks with domain monsters
like www.BocaRaton-Pool-Maintainance-24-7.net
<http://www.BocaRaton-Pool-Maintainance-24-7.net>  – because anything that
makes remotely sense was already taken and the owners are asking moon prices
for their loot.

Enabling more liquidity enriches speculators – and causes grand damage for
everybody else. Now the simple question is: Does ICANN serve “everybody
else” – or domain scalpers? IDK. But I would hope that the public interest
is in the foreground. Or should be. In my mind. Where does everybody else
stand in this matter?

Danke,

Mit freundlichen Grüßen,

Alexander Schubert

___________________________________

Alexander Schubert

LinkedIn.com/in/alexanderschubert

U.S. +1(202)684-6806

Germany +49(030)8643-7863

From: CPWG <cpwg-bounces at icann.org> On Behalf Of Roberto Gaetano via CPWG
Sent: Thursday, September 28, 2023 4:42 AM
To: Evan Leibovitch <evan at telly.org>
Cc: CPWG <cpwg at icann.org>
Subject: Re: [CPWG] Need Advise: Tokenization of Domain Names

Hi all 

In any case -- why is this being asked of At-Large?

I am travelling and do not always have the opportunity to join, so I have
regretfully missing the last call, so I might not be correctly informed.

However, one thing I can say is that the issue of lack of liquidity of
domain owners is not high on my agenda, to say the least.

I see from Evan’s message that I am not alone, but can somebody in few words
explain me why I may be wrong and I should worry? I don’t mean worry about
crypto currencies or other things, that is something that will happen anyway
regardless domain owners liquidity, and incidentally will affect more than
just the domain name market, but just the liquidity issue itself.

Thanks,

Roberto

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