State of play: Decentralized domain services reflect on industry progress

The emergence of Web3 functionality has been a boon for decentralized domain sanction services implicit the past 2 years, with millions of blockchain-based domains registered to date. Challenging marketplace conditions whitethorn person hampered exponential growth, but manufacture leaders judge that utility-driven adoption volition proceed successful the future.

Web3 is fundamentally changing however businesses, brands and retailers service customers, who are taking afloat power of their data, wallets and online individuality courtesy of blockchain ecosystems similar Ethereum.

Decentralized domain names are proving to beryllium invaluable tools for users and businesses to integrate with Web3 functionality. From providing human-readable names that regenerate numerical wallet addresses to serving arsenic a decentralized illustration crossed the Web3 ecosystem, decentralized domains connection an alternate to accepted domain services.

Ethereum Name Service (ENS) and Unstoppable Domains are the 2 astir salient platforms serving the space, having a combined 6 million-plus domain registrations since their respective inceptions. Both services saw important increases successful recently minted domains done 2021 and into 2022.

Cointelegraph reached retired to a fistful of decentralized domain sanction platforms to gauge the existent authorities of the industry, who is starring registrations and what the aboriginal holds for the space.

2022 successful review

2022 proved to beryllium a monolithic twelvemonth for some ENS and Unstoppable Domains, with some firms highlighting immoderate cardinal metrics from the twelvemonth successful correspondence with Cointelegraph.

ENS is simply a distributed, open, extensible naming strategy that runs connected the Ethereum blockchain. It maps human-readable names similar “alice.eth” to machine-readable information similar cryptocurrency addresses and URLs.

ENS emulates the accepted Domain Name Service (DNS) by utilizing dot-separated hierarchical names, commonly known arsenic domains, with the proprietor of a domain controlling some it and immoderate subdomains. An ENS domain is efficaciously a nonfungible token (NFT) that serves arsenic an Ethereum wallet address, cryptographic hash oregon website URL.

ENS developer Makoto Inoue said that the platform’s authoritative registered domain full was 2.8 cardinal arsenic of January 2023, excluding immoderate reregistered names aft expiry. When including subdomains and DNS names, that fig rises to 3.9 cardinal — excluding off-chain names similar Coinbase’s in-house cb.id domain solution for wallets and decentralized identities.

Nora Chan, vice president of communications astatine Unstoppable Domains, unpacked the premise of the blockchain-based domain sanction service. Unstoppable Domains offers Web3 domains connected Polygon with nary state fees, providing an affordable mode for users to found a unafraid and portable individuality for Web3.

The domains tin beryllium bridged to Ethereum and utilized for assorted purposes, specified arsenic sending and receiving cryptocurrency, logging successful to hundreds of apps and metaverses, gathering decentralized websites, and constructing a Web3 identity.

The level has registered and minted 3.1 cardinal domains to date, with 1.2 cardinal registered successful 2022 alone.

Measuring maturation successful a carnivore market

Both Inoue and Chan reflected connected the bearish marketplace conditions of 2022 and offered varying views of its effect connected decentralized domain registrations. Depressed marketplace conditions were really a boon to ENS registrations, arsenic Inoue explained:

“During the bull market, precocious state fees really hindered the maturation of ENS due to the fact that a .eth registration was costing determination betwixt $50–$100 erstwhile a one-year yearly registration is lone $5/year."

But arsenic state fees person dilatory reduced, it is becoming much affordable to registry ENS names. Inoue besides noted that the maturation of 2022 ENS registrations was influenced by the find of “categories.”

This included the minting of ENS domains based connected a database of names with communal traits similar the “10K Club,” which are four-digit domain names, from 0000.eth to 9999.eth; and genesis-era ENS domains, which are a prime radical of ENS names minted earlier June 2017 — preceding the advent of the fashionable CryptoPunks NFT collection.

Meanwhile, Chan conceded that the complaint of registrations with Unstoppable Domains slowed successful 2022. Nevertheless, the 1.2 cardinal domains registered successful 2022 inactive relationship for much than a 3rd of its full domain list.

Third-party integration

Companies, brands and users are becoming progressively acquainted with Web3 functionality. Using a decentralized domain, users tin transportation their implicit integer ID with them, wage for items connected an e-commerce site, and cod NFT versions oregon extras linked to circumstantial real-world products.

As much of these services plug into Web3, the likes of ENS and Unstoppable Domains supply the infrastructure for some businesses and users to participate this caller paradigm.

For ENS, the emergence of Coinbase’s high-profile cb.id subdomain integration was the biggest third-party work integration story, according to Inoue. 

The Cross-Chain Interoperability Protocol (CCIP) is simply a cosmopolitan modular for developers to make services and applications that tin transact and nonstop accusation actions crossed aggregate networks. The ENS developer said CCIP Read provides a mode to store ENS names extracurricular of the Ethereum furniture 1, which lowers wide state costs.

Chan highlighted that contempt the caller cryptocurrency carnivore market, Unstoppable Domains’ extended footprint of integrations with partners similar Brave, Opera, Trust Wallet and Etherscan. The steadfast has besides launched assorted Web3 top-level domains — including .x, .nft, .wallet and .crypto — with mainstream brands and companies.

Unstoppable Domains’ enactment with Blockchain.com saw the instauration of its .blockchain top-level Web3 domain, unlocking a imaginable 83 cardinal users of Blockchain.com who mightiness beryllium looking for a customizable .blockchain domain oregon human-readable wallet address.

What does 2023 person successful store?

Subdomain registrations could surge successful 2023, if Inoue’s prediction is correct. The ENS developer told Cointelegraph that ongoing improvement could springiness users much power of subdomains:

“2023 volition spot a surge of subdomain registrations. This volition beryllium driven by the merchandise of ‘Name Wrapper,’ a diagnostic to crook subdomains into NFTs (currently lone .eth is NFTs), allowing the assemblage to merchantability and transportation subdomains overmuch much easily.”

Inoue besides highlighted subdomain integrations with the likes of Coinbase arsenic an adoption driver, making ENS names much accessible to users. It besides lowers state costs to interact with the Ethereum protocol, “making it resistant to the bull marketplace state surge.”

While the registration of these subdomains doesn’t bring nonstop gross to the ENS enactment itself, Inoue said they thrust the wide adoption and usefulness of the protocol wrong the Web3 ecosystem.

Chan said focusing connected creating much utility, gathering partnerships and improving the idiosyncratic acquisition of the work would beryllium cardinal to continued adoption this year.

An alternate view

Cointelegraph besides spoke to PeerName laminitis and CEO Vasil Toshkov, whose level was founded successful 2014, selling .bit domains based connected Namecoin. The level present sells a fistful of Emercoin blockchain domains — including .coin, .bazar, .lib and .emc — and presently manages astir 8,000 domains.

Toshkov said that PeerName sells “truly decentralized domains” for moving websites and does not connection NFT domains nor centrally managed services. It antecedently sold a wider array of domains from antithetic platforms but present focuses connected decentralized applicable applications.

PeerName sold astir 700 domains successful 2022, with Toshkov highlighting accrued contention and precocious fees astatine the extremity of the bull marketplace arsenic cardinal challenges:

“Our concern performs overmuch amended during a carnivore market. Then, the contention with fake domains disappears. Fees are low, and users tin wage seamlessly. We besides lone person users who bargain domains to use, not arsenic speculation.”

The astir sold domains connected PeerName see .bit, .coin and .onion. The second domain is not blockchain-based but is utilized wrong the Tor browser and lawsuit system. Toshkov believes that the anticipation of .bit domains besides being integrated into the Tor task and browser could thrust adoption.

“If this happens, the involvement successful them volition beryllium huge. These are the archetypal and astir decentralized blockchain-based domains. Kind of similar Bitcoin, but for domains,” helium said.

Cointelegraph has antecedently explored the prevalence of domain “hijacking” and “squatting,” which is driven by speculative users that registry domains bearing well-known brands oregon names.