There is a new crypto land grab in town, and nope it is not just digital art non-fungible tokens (NFTs) technology. We are talking about decentralized domains built on the Ethereum-blockchain Name Service addresses. These names are the gateway to the Metaverse.
To this end, the hype building around their acquisition is reminiscent of the .com names of the Web 1.0 era. Back then, it dawned on businesses and individuals that while the internet was boundless, it had one significant limit; its inventory of addresses.
This awareness brought about the first URL gold rush turning domain names into lucrative assets. To illustrate this point, Cars.com has the highest valuation of all domain names in public records. It is worth $872 million because it is memorable, short, and has massive search volumes.
The URL gold rush has now moved to the decentralized sector. Buyers are snapping up as many premium domain names as they can for speculation purposes. As per Dune Analytics data, there are 811,187 Ethereum Name Service domain names in circulation.
December 2021 had the highest volumes of decentralized domain name registration, and users minted 109,280 addresses on the service. Now, these domain name holders are digital landlords. Decentralized domain names function like public-facing wallets.
They can receive your crypto assets and NFTs and act as login credentials to websites just like your Google or Facebook credentials do. These domain names will be critical in the Web 3.0 and metaverse era, working as profiles and user names.
How Decentralized Domains are NFTs?
Blockchain domains function like non-fungible tokens. Like NFTs, blockchain protocols store decentralized domain name data in immutable, distributed ledgers. An NFT represents a digital asset such as an image, video, audio file, GiF, or domain name on a blockchain network. NFT domains or crypto domains are unique domains represented by an NFT.
They are unique.
Their data is immutable.
Each name has an exceptional inherent value.
A domain can change ownership.
What Are the Utilities of Domain NFTs?
NFTs, prove assets provenance and ownership. Domain name NFT however, have other benefits that include;
1. Domain NFTs as Crypto Addresses
First, you can use them as wallet addresses to send and receive crypto assets and tokens. To illustrate this point, an Ethereum wallet address has 42 hexadecimal characters such as 0xb6060BFb836897EAECa521A7C2BE728D9BB5CE92. Sending this address to friends or customers for payments is risky and difficult to follow up.
The Ethereum domain name service (EDNS) functions as a DNS system for web 3.0. It will change this long and complicated wallet address to a simple and easy-to-use wallet address or domain, such as mike.eth. Any person on the web can send payments to mike.eth.
2. Domain NFTs as an Investment Strategy
NFTs domains are scarce thanks to the transparency and immutability of blockchain technology’s data. Reselling a catchy NFT domain on the secondary marketplace could earn significant profits. With more utility than digital art NFTs, we are more fond of today.
3. Domain NFTs as Decentralized Website Domains
Thirdly, you can use NFTs domains to host web 3.0 sites. All you need to do is connect your decentralized domain to a website address. You could use URLs to create censorship-proof websites via IPFS.
That said, most popular browsers do not support decentralized domain names. While you can turn your blockchain domain name into a fully-fledged website, for your e-commerce business, Web 2 search engine processes such as Google page indexing and web crawlers might not favor them as they do regular domain names.
But owning a decentralized domain has one great advantage!
Say that you already have a Medium blog but want to create a Substack page. However, you cannot easily integrate your Medium content on your new platform. This is because, Medium frowns on copy-pasting, and Google may also deprioritize your content on Substack due to its SEO framework.
Therefore, you will have little option but to start a brand new blog, losing your Medium account’s content, followers, and stats. Web 3 domains solve this issue by giving your full ownership of your content. Furthermore, you can move your content across the web to other decentralized domains.
4. Domain name ownership
Moreover, unlike the general domains, which need periodic renewal fees, NFT domain payments occur only once. Therefore, there are no renewals on domain name services. On the other hand, web 2.0 domains need annual renewals because they are centralized.
Consequently, you do not buy a web-2 domain but rent it. If you do not renew it, you will lose ownership of the domain name. However, NFTs domains are decentralized, meaning you have complete control of them; no central authority is involved.
To get yourself your first decentralized NFT domain, go to the edns.domains. Then, pre-register your desired domain name on the top right of the webpage.
5. Domain NFTs as Digital Identities
Domain names can also direct buyers to your digital real estate. They are a portal that connects customers to brands. A unique NFT domain will help your brand stand out from the crowd in the metaverse world.
For example, a descriptive domain like coffee, clothes, etc., will help other users learn more about your goods or services. In addition, an NFT domain name can showcase your business name, relevance, and industry.
6. How to Earn with Domain name NFTs
Like metaverse NFTs, domains allow users to own a virtual realm in the Metaverse. You can buy and resell your Metaverse NFTs for profits. But first, research and pinpoint trending NFTs domains. Then, similar to any other investment asset, aim to buy low and sell high. OpenSea, allows you to design collections from pre-minted metaverse domains and resell them.
Alternatively, create your NFTs domains and sell them. There are decentralized domain servers that provide pre-register opportunities for users ready to mint a fresh new domain name without a cost. First, search for popular topics and names and mint trending keywords and subjects via an NFT domain service like hello.meta. Then move your NFT to the marketplace for sale.
To Wrap Up
Domains NFTs play a significant role in the Metaverse. They will bind the cryptocurrency and digital identity sector to the internet infrastructure. However, beware of these domain NFTs drawbacks.
First, owning and maintaining a decentralized domain name is not a walk in the park. You could lose your private key and lose control of your .eth address. And since they are yet at an infant stage regarding its widespread usage. Browsers with billions of users, such as Chrome, have yet to adopt these functions. Though we expect to see them adapt soon with Web3.0 being so extensive with utilities. Either that or soon we will see domains with web hosting integration that will take over web2.0 browsers.