MAINNET
Established Member
- Impact
- 630
“The peddler selling what he does not own is either a broker or a scammer. If what he’s selling can’t be owned, he is indeed the latter.”
Things are getting even trickier in the centralized domain space —with tokenization and fractionalization being trending topics. Rumor has it there’s a crop of new platforms stepping to the mic and proclaiming they’re spearheading the revolution of selling hopefuls on the idea of owning shares of a domain that, in essence, simply isn’t ownable. Even the hot Spaceship registrar knows not to toy around with the ownership lingo too much; they tell you that you’re renewing a “subscription” when adding another 5 years to that .com name you’re hoping to sell at a considerable profit. As they should.
It can only be concluded that fractionalization and tokenization will create more issues than solutions. Not because either is inherently unnecessary, but because the organization governing the “assets” at the center of this slice-up — ICANN — has the room to pull the rug. We also can’t forget the ramifications that could follow a fractionalized and/or tokenized name being part of a UDRP — and then transferred. This type of exposure suggests some class-action lawsuits could be in the pipeline if a particular domain and a certain amount of loss are paired.
All of this makes you wonder if broader regulation of the centralized domain space might be coming down the pipeline in the future. With the heavy emphasis on .com, businesses, and the not-so-flattering reputation of domainers, it only seems fitting that a few publicized stories about fractionalization gone wrong could make someone in government say, “Let’s finally take a look under the hood of domaining — and maybe replace the engine altogether.”
To be honest, this is more concerning than it is amusing. Sure, the fractionalization of “assets” with value that’s heavily tied to utility is risky — and lends itself to greed when you consider the existing cap on centralized domain utility. Yet the fraction and token cards shouldn’t be thrown into the fire simply because the utility innovation train is late to the station. As the saying goes, “You can’t get blood from a turnip”—but it seems some “ambitious” parties want to try. Too bad it’s at the expense of domaining’s current and future participants.
We all know how this will go. Certain names will get the master push, hopefuls will buy in, big sales will be manufactured to draw more money into the system, and then BAM — everything flatlines. Speculation about fake sales and sabotage will start to permeate the sector while the broader potential of centralized domains and domaining take the hit.
There’s always talk of human behavior and cycles — and the current behavior and incoming cycle feel all too familiar. If only some folks cared to see the error in their approach and chose to do something better. Yet, saying the quiet part out loud does nothing but fall on deaf ears nowadays it seems. It still feels right to say it — even if just so it can be on the record.
Bottom line, now probably isn’t the time to lean heavily into fractionalization AND tokenization. There needs to be an actualization of scalable value before any model built atop the two can thrive. Then again, what does anyone who sees a clear correlation between distributed shares and decentralization really know?
When it comes down to it, it’s up to ICANN to decide what centralized domains are and whether they can be chopped into a few thousand pieces of popularity and sold to the public. Just give it some time. The upcoming round of gTLD applications might be capped off with revelations about what “centralized” really means — and who really determines the tides of value.
What are your thoughts @jberryhill, @bmugford, @bobhawkes and others? Are there major issues incoming?
Things are getting even trickier in the centralized domain space —with tokenization and fractionalization being trending topics. Rumor has it there’s a crop of new platforms stepping to the mic and proclaiming they’re spearheading the revolution of selling hopefuls on the idea of owning shares of a domain that, in essence, simply isn’t ownable. Even the hot Spaceship registrar knows not to toy around with the ownership lingo too much; they tell you that you’re renewing a “subscription” when adding another 5 years to that .com name you’re hoping to sell at a considerable profit. As they should.
It can only be concluded that fractionalization and tokenization will create more issues than solutions. Not because either is inherently unnecessary, but because the organization governing the “assets” at the center of this slice-up — ICANN — has the room to pull the rug. We also can’t forget the ramifications that could follow a fractionalized and/or tokenized name being part of a UDRP — and then transferred. This type of exposure suggests some class-action lawsuits could be in the pipeline if a particular domain and a certain amount of loss are paired.
All of this makes you wonder if broader regulation of the centralized domain space might be coming down the pipeline in the future. With the heavy emphasis on .com, businesses, and the not-so-flattering reputation of domainers, it only seems fitting that a few publicized stories about fractionalization gone wrong could make someone in government say, “Let’s finally take a look under the hood of domaining — and maybe replace the engine altogether.”
To be honest, this is more concerning than it is amusing. Sure, the fractionalization of “assets” with value that’s heavily tied to utility is risky — and lends itself to greed when you consider the existing cap on centralized domain utility. Yet the fraction and token cards shouldn’t be thrown into the fire simply because the utility innovation train is late to the station. As the saying goes, “You can’t get blood from a turnip”—but it seems some “ambitious” parties want to try. Too bad it’s at the expense of domaining’s current and future participants.
We all know how this will go. Certain names will get the master push, hopefuls will buy in, big sales will be manufactured to draw more money into the system, and then BAM — everything flatlines. Speculation about fake sales and sabotage will start to permeate the sector while the broader potential of centralized domains and domaining take the hit.
There’s always talk of human behavior and cycles — and the current behavior and incoming cycle feel all too familiar. If only some folks cared to see the error in their approach and chose to do something better. Yet, saying the quiet part out loud does nothing but fall on deaf ears nowadays it seems. It still feels right to say it — even if just so it can be on the record.
Bottom line, now probably isn’t the time to lean heavily into fractionalization AND tokenization. There needs to be an actualization of scalable value before any model built atop the two can thrive. Then again, what does anyone who sees a clear correlation between distributed shares and decentralization really know?
When it comes down to it, it’s up to ICANN to decide what centralized domains are and whether they can be chopped into a few thousand pieces of popularity and sold to the public. Just give it some time. The upcoming round of gTLD applications might be capped off with revelations about what “centralized” really means — and who really determines the tides of value.
What are your thoughts @jberryhill, @bmugford, @bobhawkes and others? Are there major issues incoming?
Last edited:
