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My brain explodes trying to understand MMX’s new blockchain deal for .luxe

Kevin Murphy, August 3, 2018, Domain Registries

Minds + Machines has abandoned plans to launch .luxe as a gTLD for luxury goods and instead made a deal to sell it as an address for cryptocurrency wallets.

If you thought it was a silly move marketing .ws as meaning “web site” or .pw as “professional web”, you’re probably not going to like the backronym MMX has in mind for .luxe:

“Lets U Xchange Easily”.

Really.

Tenuous though that marketing angle may be, the concept behind the newly repurposed TLD is actually quite interesting and probably rises to the level of “innovation”.

MMX has inked a deal with Ethereum Name Service, an offshoot of Ethereum, an open-source blockchain project.

Ethereum is largely used as a cryptocurrency, like BitCoin, enabling people to transfer monetary value to each other using “wallet” applications, though it has other uses.

I’m just going to come right out and say it: I don’t understand how any of this blockchain stuff works.

I’ve just spent an hour on the phone with MMX CEO Toby Hall and I’m still not 100% clear how it integrates with domains and whether the .luxe value proposition is really, really cool or really, really stupid.

I’ll just tell you what I do understand.

Currently, when two Ethereum users want to transfer currency between each other, the sender needs to know the recipient’s wallet address. This is a 40-character nonsense hash that makes an IPv6 address look memorable.

It obviously would be a lot better if each user had a human-readable, memorable address, a bit like a domain name.

Ethereum developers thought so, so they created the Ethereum Name Service. ENS allowed people to use “.eth” domains, like john.eth, as a shorthand address for their wallets. I don’t know how it works, but I know .eth isn’t an official TLD in the authoritative root.

About 300,000 people acquired .eth domains via some kind of cryptographic auction process that I also don’t understand. Let’s just call it magic.

Under the deal with MMX, some 26 million Ethereum wallet owners will be able use .luxe domains, dumping their .eth names if they have them.

The names will be sold through registrars as usual, at a price Hall said will be a little bit more than .com.

Registrants will then be able to associate their domains with their 40-character wallet addresses, so they can say “Send $50 to john.luxe” and other crypto-nerds will instantly know what to do. Ethereum wallets will apparently support this at launch.

Registrars will need to do a bit of implementation work, however. Hall said there’ll be an API that allows them to associate their customers’ domains with their wallets, and to disassociate the two should the domain be transferred to somebody else.

This is not available yet, but it will be before general availability this November, he said.

What this API does is beyond my comprehension.

What I do understand is that at no point is DNS used. I thought perhaps the 40-char hash was being stored in the TXT field of a DNS record, but no, that’s not it. It’s being stored cryptographically in the blockchain. Or something. Let’s just say it’s magic, again.

The value of having a memorable address for a wallet is very clear to me, but what’s not at all clear to me is why, if DNS is not being queried at any part of the Ethereum transaction, this memorable address has to be a domain name.

You don’t need a domain name to find somebody on Twitter, or Instagram, or Grindr. You just need a user name. Why that model couldn’t apply here is beyond me.

Hall offered that people are familiar with domain names, adding that merchants could use the same .luxe domain for their web site as they use for their Ethereum wallets, which makes sense from a branding perspective.

The drawback, of course, is that you’d have to have your web site on a .luxe domain.

The launch plan for .luxe sees sunrise begin August 9, running for 60 days. Then there’ll be two weeks for .eth name holders to claim their matching .luxe names. Then an early access period. GA starts November 6.

While it should be obvious by now I don’t fully “get” what’s going on here, it strikes me as a hell of a lot more interesting way to use .luxe than its originally intended purpose as a venue for luxury goods and services.

Let’s face it, depending on pricing it would have turned out either as a haven for spammers, a barely-breaking-even also-ran, or a profitable business propped up by a couple thousand trademark owners paying five grand a year on unused defensive regs.

Chaotic scenes as ‘Grumpies’ lose auDA board fight

Three directors of .au registry auDA managed to keep their seats on the board despite losing the “popular vote” of members late last week.

The vote happened at the conclusion of an occasionally chaotic three-hour meeting that saw former AusRegistry chief Adrian Kinderis kicked out of the room barely a minute into proceedings.

The results in each of the three votes to fire directors Suzanne Ewart, Sandra Hook and chair Chris Leptos were 57 or 58 in favor and 51 or 52 against, which would have been a narrow win for the so-called “Grumpies” who originally called for the sackings.

However, auDA rules require, Leptos said, a simple majority of both “Supply” and “Demand” classes of members, and the Supply class (ie, registrars) voted against the motions by 30 to 2 or 31 to 1.

Therefore, all three directors get to keep their jobs.

auDA noted in a statement that a greater proportion of Supply class members (the substantially smaller constituency) turned out to vote compared to Demand class, adding:

It is time now for all members to get behind the reform of auDA as demanded by the federal government.

auDA is not the plaything of a small group of self-interested parties.

It can no longer be run as a club type organisation with a small membership who wield undue influence.

A “club type organization” was pretty much what came across during the meeting, which was audio-only webcast Friday morning. ICANN, auDA ain’t.

I was left with the impression of something a bit like Nominet circa 2010 or my first ICANN meeting back in 1999. Not so much herding cats, as [RACIST JOKE ALERT] herding wallabies.

At times it felt like an ICANN Public Forum, with an infinite number of Paul Foodys lining up at the mic.

At the same time, the meeting was chaired by somebody who, despite never losing his cool, seemed set on limiting criticism from members to the greatest extent possible.

There was controversy from the very outset, with the former CEO of former .au back-end provider AusRegistry (now part of Neustar) getting kicked out in the opening minute.

Kinderis, who no longer works for Neustar and has vowed publicly to be a thorn in auDA’s side, said he was “unlawfully removed” from the meeting by venue security, at the instruction of Leptos.

Leptos disputed Kinderis’ claim that he was there as a proxy for a legit member and said he believed he had acted “entirely appropriately” in ordering his removal.

There was no suggestion of physical force being used. His exit was recorded by chief Grumpy Josh Rowe, who then posted a brief video to Twitter.

Leptos then threatened to throw out fellow Grumpy Jim Stewart, who was protesting Kinderis’ removal, before warning non-member attendees that they would not be permitted to ask questions.

Forty-five minutes later, he repeatedly threatened to kick out Stewart for live-streaming video of the meeting from his phone, having apparently received complaints from other members.

Fifteen minutes later, the threats returned after Stewart and another member attempted to engage Leptos in an argument about auDA’s member recruitment policy.

The words “take a seat Mr…” were a recurring meme throughout the meeting.

The original reasons for the call for the directors to be fired were myriad, ranging from lack of transparency to projects such as the Neustar-Afilias registry transition and auDA’s desire to start selling direct second-level .au domains.

But the bulk of the meeting was taken up with discussions, and attempted discussions, about auDA’s recent membership spike.

The Grumpies have audited the new member list — which has grown from 300-odd to 1,345 in just a few weeks — and found that the vast majority of new members are employees of just three registrars and one registry (Afilias, the new back-end).

They reckon these new members, many of whom do not live in Australia, represent an attempt by auDA leadership to capture the voting community, and that foreigners are not technically members of the “Australian internet community” that auDA is supposed to represent.

Leptos responded to such criticisms by saying that employees of Australia-focused registrars are indeed members of the Australian internet community, regardless of their country of residence.

He added that auDA is under the instruction of the Australian government to diversify its membership — he said that registrars have no board representation currently — and that the recently added members are a first step on that path.

The Grumpies had shortly before the meeting started making accusations that the membership influx amounts to “potential cartel behaviour”.

Leptos addressed this directly during the meeting, saying they had “accused the CEO of criminal conduct” and categorically denying any wrongdoing.

auDA later issued a statement saying:

This is a very serious allegation to have been made and auDA strongly disagrees that by encouraging others to join the auDA membership, or by approving membership applications which satisfy its constitutional requirements, auDA or its officers have engaged in cartel behaviour or otherwise acted improperly.

Two companies “capture” auDA

Membership votes of the Australian ccTLD registry auDA could now essentially be captured by just two companies, potentially including new back-end provider Afilias, according to data from a disgruntled former director.

According to Josh Rowe’s analysis of auDA’s newly swollen members list, 39.2% of auDA’s members are now employees of CrazyDomains owner Dreamscape Networks, after Dreamscape signed up a whopping 527 staffers.

Assuming bloc-voting, Dreamscape would need support from only one of either Afilias (with 12.4% of members) or the registrar Arq Group (formerly Melbourne IT, with 15%) to obtain a simple majority in any member vote, judging by Rowe’s figures.

His analysis, sent out to supporters and forwarded to DI this week, was based on auDA’s official member list, which includes full contact information for each member. He had to crowdfund a couple hundred bucks to obtain the list from auDA.

Rowe told ITWire that in most cases the new members listed their employer’s address as their own.

The names-only list published on auDA’s web site currently stands at 1,345 people by my count, about a thousand more than it contained just a few days ago.

Rowe’s tally chimes roughly with my previous estimate that about 150 Afilias employees had joined auDA. Rowe makes it 166.

auDA had previously publicly thanked the three aforementioned companies, along with the registrar Ventra IP, for helping with the membership drive, which auDA says will help it diversify its membership as per the instructions of the Australian government.

The new members will not have the ability to vote in the auDA extraordinary general meeting, which is due to take place at midnight UTC tonight (1000 Friday morning in Melbourne). Their memberships should be active by the time the annual general meeting rolls around in a few months, however.

Tonight’s meeting will see the 300-odd older members vote on whether to fire auDA’s three independent directors. A fourth motion, to express no confidence in CEO Cameron Boardman, was removed from the agenda by the auDA board.

auDA was forced to called the meeting after Rowe and his allies, dismayed by what they see as policy and transparency missteps, managed to rally the support of more than the threshold 5% of the member base.

That was fewer than 20 people under the smaller membership (though Rowe’s petition obtained 22 signatures). Now it would be around 67 people.

This presumably means that Rowe’s allies — the so-called “Grumpies” — have lost their ability to shake things up in the auDA boardroom in future.

However, it presumably also means that if DreamScape, Afilias or Arq wanted to cause trouble, they could strong-arm their employees into supporting whatever flag they wanted to wave.

Baidu gets Chinese approval for .baidu

It seems China’s Draconian licensing program for TLD registries is not limited to foreigners.

Chinese internet giant Baidu on Friday became the latest new gTLD registry operator to get the nod to run a TLD by the Ministry of Industry and Information Technology.

The approval was for .baidu, which is currently pre-launch with no launch plan on record.

Despite the brand match, it’s not technically a dot-brand gTLD — its ICANN contract has no Specification 13, which contains various carve-outs for single-registrant spaces.

While not particularly well-known in the English-speaking world, Baidu is second only to Google in terms of search engine market share, due to its dominance in China.

The company had 2017 revenue of almost CNY 85 billion ($12.5 billion).

Neustar swaps out CEO, PIR looking for new CEO

There are to be changes at the top at two of the industry’s stalwarts.

Neustar has announced that eight-year CEO Lisa Hook has stepped aside to be replaced by Charles Gottdiener, who comes from the world of private equity.

He was most recently COO and MD at Providence Equity Partners.

Hook, who became CEO in 2010, will remain on the Neustar board of directors.

Neustar, which manages .biz, .co and many dot-brand gTLDs, is now owned by private equity group Golden Gate Capital, with a minority ownership by Singapore-based investor GIC, following a $2.9 billion deal last year.

Meanwhile, Public Interest Registry has started advertising for a new CEO of its own, following the mysterious resignation of Brian Cute in May. PIR runs .org and related gTLDs.

PIR said its new boss will need “excellent organizational, strategic planning, financial management and diplomatic skills”.

If it sounds like you, you have a few days to get your application in.