[CPWG] Need Advise: Tokenization of Domain Names

Fri Sep 29 13:58:57 UTC 2023

Dear Alexander,

Many thanks for the mail that makes an interesting reading.

Thankfully there have been differing views on the subject. The terminology is not yet into the ICANN Meetings.

Thanks to the ICANN Meetings and interactions, I am certainly conscious of the fact that when "domain names fall into the area of trademarks, it is a hotly contested battle in the courts".

Domain Name Scalping is sort of "Gold Rush" kind of a bias produced by the promoters.

I am taking a start on this subject with "Domain Flipping" [https://cleverism.com/buying-selling-domains/]

The Primary Market appears to be facilitating Defensive Acquisitions. Your pointers on the Secondary markets are nice. Thank you for the same.

I got some good leads on this discussion thread.

More thoughts are welcome...

Sincerely,

Gopal T V
0 9840121302
https://vidwan.inflibnet.ac.in/profile/57545
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 17:14
To: 'CPWG' <cpwg at icann.org>
Subject: Re: [CPWG] Need Advise: Tokenization of Domain Names

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

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.html

#3:

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

https://circleid.com/posts/20210218-busting-domain-name-secondary-market-myths/?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&v=o3wyP2vApU0

[Image removed by sender.]<https://www.youtube.com/watch?app=desktop&v=o3wyP2vApU0>

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

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://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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