Some of the .xyz sales have me scratching my head. Boy.xyz can be had for about $1500, but no one seems to be touching that. I see for sale posts on that name all the time.
A domain's
value in the marketplace is derived from how coveted it is (more demand = higher price). The .com[1] TLD stands alone in how universally coveted it is, .com is coveted by everyone for every use case. The price of .com domains are consistently record-breaking because of this demand. There is a dozen companies in every industry that would like to own liquid.com, hundreds of .com domains containing "liquid" are registered. The same applies to SLDs: because .com is so coveted, there is a lot of competition for 2L, 3L, 4L .com domains, which drives up the value.
For a TLD to have value, it needs to be coveted. For non-.com TLDs, all of which lack universal demand, demand must come from elsewhere. The primary way non-.com TLDs become coveted is through adoption by a community (usually as a lower-cost alternative to .com). Often this adoption is organic, based on trends created by influential early players. Sometimes there is a natural synergy (e.g: the TLD has meaning to the community (ai, io)) and sometimes it is arbitrary (e.g: based on whichever TLD was available at the time an early player registered their domain (so, xyz)).
The absolute value of a domain under an adopted TLD correlates with how much players in that space are willing to spend. A rich community can afford to spend a lot, a poor community cannot afford to spend much. A community in which brand is very important has an incentive to spend a lot, a community in which brand doesn't matter has no incentive to spend much at all.
During the early 2010s, the technology community adopted .io (input/output) and it has become coveted amongst technology startups. More recently, .ai has been adopted by the artificial intelligence community. There is huge amounts of money in artificial intelligence today, and brand is very important, so values of .ai domains are growing rapidly. Notion launched as notion.so and that led to dozens of products in the same knowledge tool space using .so and drove up the value of .so. During the early 2010s, "Bitly" drove popularity with .ly amongst consumer technology businesses.
"xyz" doesn't have any specific meaning in cryptocurrency but it has been adopted by the cryptocurrency community following choices made by influential early players. Since then, it has become the de facto way for cryptocurrency projects to identify. A .com is still coveted and projects that succeed often will go on to upgrade to the .com but for projects without the budget for a .com, a .xyz is a suitable alternative. There is a lot of money in cryptocurrency and brand is very, very important, so spending a bunch on the right .xyz domain is justifiable.
With all that in mind, we have a model for why "liquid.xyz" is much more valuable than "boy.xyz", even though "boy.com" is more valuable than "liquid.com":
"liquid.xyz" is valuable because "liquid" is a meaningful keyword in the cryptocurrency world, "liquidity" is talked about continuously in the cryptocurrency world, it is perfect for a cryptocurrency project's brand. Although "liquid.com" would be preferable, the cost is prohibitively high, because a potential buyer would be competing against every other business for it, instead of just cryptocurrency businesses.
"boy.xyz" is worth very little because the keyword has no meaning in the cryptocurrency world. The domain is very unlikely to be used as a brand, which is where the majority of end user sales come from. The domain is short, yes, but short isn't inherently valuable, it's only valuable if there is demand. The cryptocurrency world hasn't created enough demand for .xyz domains.
A very important number to keep in mind is the total number of domain registrations, and the proportion of which are .com. There are in the region of 500 million total registered domains, almost 50% are .com domains... less than 1% are .xyz domains. After .com, .cn is in second place with about 5%. The domination of .com is hard to overstate, when thinking about the market value of domains, you should not consider .com and any other TLD to be equivalent: .com stands alone. A short .com domain is valuable because it's a short .com, not because it's a short domain.
(Registry premium pricing is a factor to consider when it comes to evaluating whether a community will adopt a TLD and whether a domain makes a good investment for people outside of the community but isn't necessarily responsible for value: liquid.xyz would still be able to sell for $75k if it was a registry premium
but it would be less likely for an investor to be holding it. Registry premium pricing doesn't reduce the value of a domain, it reduces the value of it as an investment.)
If you want to distill this all down to a very simple model for evaluating whether a domain name makes a good investment: can you name a dozen companies that would be willing to spend thousands of dollars on the domain? I could name lots of companies willing to spend thousands of dollars on liquid.xyz, I couldn't name any that would spend thousands of dollars on boy.xyz.
