Blockchain: Unlock Strategic Benefits of gTLDs

Over the past decade, we’ve seen remarkable changes in the online world, especially with the emergence of blockchain technology and the introduction of domain names. In recent years, numerous organizations have surfaced that provide alternative domain names. Unlike traditional domain names, these require specialized browsers, plugins, or apps to function.

This is not the first time we have encountered such alt-roots; similar opportunities existed before the ICANN new gTLD program allowed entities to operate their own top-level domains (referred to as registries). Some may remember new.net in the early 2000s which sold domains, including .travel, .kids and .xxx that eventually conflicted with proposed ICANN TLDs, until it went dark in 2012.

Unfortunately, the slow progress of opening the next round of new gTLDs has led blockchain organizations to explore alternative paths. Now, with the next round of gTLD applications approaching, blockchain organizations need to determine if a TLD is right for their business.

Alt-Root Blockchain Domain Registrations

The popularity of blockchain-based domain names is undeniable, with nearly 19 million domain names registered across various blockchain platforms. As of July 2024, these registrations include:

• Handshake: 3 million names or TLDs
• Unstoppable Domains: 6 million names across 9 TLDs, with over 1 million in .crypto and 140,000 in .888
• Ethereum: 3 million .eth names
• Decentraweb: 100,000 names and 13,000 TLDs

Ref:  AltRoots Stats

Many blockchain organizations, such as those behind .ape, .chain, .super, and .vic, have announced their intentions to apply for ICANN-recognized top-level domains. This trend underscores the growing intersection between traditional domain systems and blockchain technologies.

“In order for blockchain projects to on-board the next wave of internet users, blockchain projects need to be seamlessly interoperable with the mainstream internet,” says Tom Barrett, President of EnCirca.  “Securing their own domain extension from ICANN is the best way to ensure this happens.“

However, alt-root blockchain names are not the only option. Various new gTLDs have integrated blockchain names or technologies including .luxe, .kred, .cfd, .art, .box, .hiphop.  In 2018, I was part of a small team at Minds + Machines that worked on the first TLD to natively support the Ethereum Name Service (ENS).  This experience revealed distinct patterns in registrations.  It highlighted the differences between countries, how they were embracing blockchain technologies and the opportunities they provided to organizations.

Why Blockchains Should Consider Applying for a gTLD

Applying for a top-level domain is often a strategic move for blockchain organizations as it offers various advantages, including:

1. Support Your Blockchain’s Purpose: A new gTLD can play a pivotal role in reinforcing the purpose and utility of your blockchain.  It enhances the flexibility needed to drive long-term success. It makes it easier for users to find and access specific information or services, thereby improving their overall experience. Additionally, it allows blockchains to adapt their domain structure as they evolve.  This includes introducing new initiatives, innovative services, or features within the TLD.  All of this can be done without being limited by traditional domain constraints.
2. Scalability and Interoperability: A gTLD can help businesses tackle scalability and interoperability challenges. By providing a dedicated name space, a new gTLD allows for the seamless expansion of services and user base.  This ensures that the infrastructure can handle increasing demand without compromising performance. Furthermore, a gTLD can enhance interoperability by enabling integration with various platforms and technologies.  This fosters a more cohesive and interconnected digital ecosystem. Importantly, this approach ensures compliance with applicable laws and regulations.  It offers a structured and legally sound framework for growth and innovation. This combination of scalability, interoperability, and regulatory adherence positions businesses for sustainable and robust development in the rapidly evolving digital landscape.
3. Security and Safety: Users can benefit from traditional domain name safety and security, including renewal protection mechanisms and usage policies. For example:

• • Usage Policies: Implementing comprehensive usage policies that help prevent misuse, fraud, and cyber threats. These policies can enforce guidelines for acceptable use, mitigating risks associated with malicious activities.
  • Enhanced Security Protocols: Incorporating advanced security measures such as DNSSEC (Domain Name System Security Extensions), which protect users from domain name hijacking and other cyber attacks.  It ensures that internet traffic reaches the correct destination.
  • Compliance with Regulatory Standards: Adhering to global and local regulatory standards, ensuring the protection of user data and respecting privacy laws.  This fosters trust among users.
  • Trust and Credibility: Leveraging the established reputation and credibility of ICANN-supported domains, which can enhance user confidence and trust in the security and reliability of the domain.

4. Economic Models and Innovation: The mainstream adoption of existing blockchain technologies such as DeFi, tokenization of assets, smart contracts can benefit from the use of existing ICANN infrastructure and commonly accepted TLDs. It can also spur the creation of new economic models and innovations based on DAOs (Decentralized Autonomous Organizations) governed by code.  This leads to more transparent transactions, improved cybersecurity and identity verification.  Additionally, it improves data integrity as well as facilitating micro-transactions.
5. Community Funding: Blockchain communities can be a powerful resource for raising funds for new gTLD applications. These communities, often passionate and actively involved, can leverage their resources to generate financial support through various methods.  These methods include crowdfunding campaigns, token sales, and community-driven investment initiatives. Leveraging the collective power and commitment of the community not only helps in raising funds but also fosters a sense of ownership and support for the new gTLD.  This enhances its chances of success and widespread adoption.
6. Revenue Streams: Organizations with an established user base have a significant advantage over new gTLDs that require substantial resources to reach their target audiences. As shelf space becomes increasingly competitive, having an existing user base can provide a critical edge in generating revenue and gaining market traction.

Challenges Faced by Blockchain Organizations

1. Usage Uncertainty: Despite 19 million registered names, the actual usage remains unclear.  A significant percentage of these names may be related to trademarks that were not legitimately registered by their owners.
2. Existing Integrations: Several new gTLDs have already been integrated with blockchains, functioning both on the blockchain and in traditional ways. Early adopters may have already established their online presence and may not wish to buy additional domain names. Thus, pricing could be a real determining factor, affecting your business plans’ ROI.
3. Financial Viability: The costs for blockchain organizations to attain their own TLD, including an estimated application fee of over $200k and yearly fees of at least $35k. This requires a carefully thought-out plan that needs to incorporate traditional registrar channels and existing processes.
4. Legal Requirements: A traditional legal entity is required for the ICANN application process. Decentralized and Autonomous Organizations will need to have a recognized legal entity that can meet all the ICANN application and operational requirements. This includes proof of legal establishment, details on directors and officers, financial projections, and other necessary documentation.
5. Generic Blockchain TLD: If your organization is pursuing a popular blockchain term, such as .crypto or .coin, it’s likely you won’t be the only applicant. Therefore, it’s essential to prepare for the possibility of going to auction. This process involves all applicants for the same TLD to bid to win it. In the last round, private auctions allowed the winning bid to be split among the ‘losing’ bidders.  In addition, there was the ICANN Auction of Last Resort, where the winning bid was paid to ICANN. While it is uncertain if private auctions will be allowed in the next round, it is important for applicants to be prepared for both options.
6. Types of TLD Applications: In the 2012 round, the median value for the Auction of Last Resort was just over $3 million. This highlights the importance of blockchain organizations to carefully consider the type of TLD application they pursue – whether it is a generic, brand, community, or geographic.  These categories determine priority when there is more than one application for the same TLD.  For example, if there are three applications for .something and one is a community application that receives community status, they would attain the string without having to go to auction.  Similarly, blockchains that apply for a TLD that exactly matches their registered trademarks also receive priority.  For instance, if the Ape Foundation holds the registered trademark ‘Ape Coin’, it would have priority over other non-trademark organizations applying for .ApeCoin.  However, this priority does not apply to .ape, where another organization could apply resulting in an auction.

Conclusion

In conclusion, the advancement of blockchain technology and the use of domain names are both opportunities and challenges for blockchain organizations.  While alt-root blockchain domains have significant registration volumes, the upcoming ICANN new gTLD application round provides blockchains with their first chance to attain their own ICANN-recognized top-level domain.

However, it is crucial for blockchain enterprises to understand the strategic benefits of owning a TLD.  These benefits include reinforcing their purpose, improving interoperability, ensuring security, and enabling new economic models.  At the same time, they must consider the challenges such as financial viability, legal requirements, type of application, and the potential of having to take part in an auction.  Blockchain organizations that understand the value and extract the benefits a TLD provides will best position themselves for future growth and long-term success in the evolving blockchain landscape. 

Take Action: If your blockchain organization is ready to explore the strategic benefits of owning a TLD, reach out to us!  We will ensure your string aligns with your organization’s goals and help you prepare and attain your TLD in the upcoming ICANN application round. Secure your digital future today and position your organization for success in the rapidly evolving digital ecosystem.