Blockchain crisis looming for new gTLD next round

New gTLD applicants could face more of a threat from blockchain-based alternative naming systems next year than perhaps they first thought.

ICANN is coming under pressure to give additional rights to the owners of top-level strings that act like TLDs on blockchains, potentially adding friction — and six figures of extra costs — to applications for matching strings.

In the recently closed public comment period on the current draft Applicant Guidebook, two blockchain naming firms focused on the risk posed from name collisions should a gTLD get delegated that matches a blockchain TLD.

More importantly, ICANN’s influential Security and Stability Advisory Committee expressed the same views.

Alexander Urbelis, general counsel and CISO of Ethereum Name Service, said in his comments that many operators of alt-TLDs will apply for their DNS matches in next year’s application round, adding:

ICANN should consider that a new gTLD, for which an identical string already exists in an alternative name space, should be considered a compromised asset, and that delegating such gTLDs may subject ICANN, and applicants, to substantial liability. In addition to the technical issues posed by name collision, such delegations could also result in consumer confusion, difficulties with resolving queries (particularly as access to alternative names is increasingly integrated into mainstream web browsers), security risks, and broken authentication systems

Shifting gears, Urbelis then goes on to espouse the exactly opposite view to what you might expect from an operator of a blockchain naming system:

We urge ICANN to ensure that operators of strings in alternative names spaces are not given preferential treatment in the upcoming new gTLD application round, either deliberately or inadvertently. Such operators should not be rewarded for choosing to operate outside of ICANN governance and policies, particularly when the results of such preferential treatment could be so devastating for the stability of the DNS, as well as consumer trust in the new gTLD program and the DNS itself.

However, he concludes that alt-TLDs should be considered during the application process, specifically when ICANN’s evaluators conduct the String Similarity Evaluation.

we note that the string similarity evaluation does not appear to account for strings that may exist in alternative name spaces that are not under ICANN governance. Given the proliferation of such strings and alternative name spaces in recent years, ICANN should not ignore their existence by considering string similarity within only the ICANN-governed DNS, particularly due to the technical issues outlined above in connection with name collision.

Currently, this evaluation stage only looks at similarity to existing TLDs, some strings blocked by policy, and other applied-for strings.

If Urbelis’ advice were taken on board, an application for .clown, for example, could find itself ruled similar to alt-TLD .down, which is on the Handshake naming system and available at some registrars.

ENS runs .eth as a blockchain TLD. While the company claims over 1.6 million names registered there, .eth can never make it to the consensus DNS because ETH is the protected three-letter code for Ethiopia and therefore blocked by a Guidebook policy that is pretty much locked-in.

Unstoppable Domains, which markets dozens of alt-TLDs, focused on name collisions in its brief comment to ICANN, seeking extra clarity in how the collision assessors will decide whether a string is “high risk”.

The current AGB says evaluators will look at both quantitative data — measurements of traffic for non-existent TLDs to the root servers for example — and unspecified “qualitative” factors. Unstoppable’s head of operations Michael Campagnolo wrote:

If ICANN wants to help applicants to assess their risk pre-application submission, examples and sources of qualitative evidence should be described and made available to applicants prior to, and in a reasonable amount of time before the opening of the application window, similar to the quantitative information.

The subtext here, it appears, is that Unstoppable wants to know if non-DNS qualitative factors, such as the existence of an alt-TLD matching an applied-for string, will be taken into account.

That’s a good question, and as the AGB currently stands it appears to be up to the Technical Review Team that will conduct the name collision evaluation on each application.

The Name Collision Analysis Project working group, which came up with most of the current name collision rules, seemed to have mostly ignored alt-TLDs in its work due to difficulty and timing.

Unstoppable points out that applicants with strings deemed at high risk of collisions could incur extra fees of $100,000 to $150,000, on top of the $227,000 standard application fee, so the extra clarity on the rules could avoid applicants having to reach deeper into their pockets.

While ICANN is adept at ignoring or merely paying lip service to self-serving public comments filed by commercial entities, it is bound by its bylaws to take the advice of its Advisory Committees seriously.

Comments filed by the 17-member SSAC will carry more weight, and SSAC is warning that collisions between DNS and non-DNS naming systems could raise security risks, promote instability, and create user confusion.

SSAC’s SAC130 (pdf) — formal Advisory Committee advice — makes four recommendations related to name collisions. One is:

The AGB should explicitly state that the TRT is allowed to include evaluating potential collisions with known, widely used alternative naming systems and other external sources, as these can create foreseeable security and stability risks for DNS users.

If ICANN adopts the SSAC recommendations, it seems the TRT will be encumbered with the heavy burden of figuring out how, when and why an alt-TLD and an applied-for gTLD create risks so unacceptable that the applied-for string should be blocked.

Another question that has been raised in recent weeks is whether alt-TLD operators should be able to use mechanisms such as Community Priority Evaluation and Community Objection to secure their TLDs or disrupt other applications.

Could Unstoppable, for example, claim that its cohort of .wallet alt-TLD registrants constitute a protected “community” and thus get a priority approval?

The company could certainly try, but experts in the policy-making community and ICANN staff seem to think the point-based CPE mechanism is designed in such a way to make such a claim incredibly difficult to back up.

ICANN will consider all of the public comments over the coming weeks and months before making changes, if any, to the AGB.

There are hundreds of thousands of alt-TLDs out there — over 6,000 are even carried by a handful of ICANN-accredited registrars — but it’s not clear how many are actually used.

With that in mind, should ICANN offer additional protections to blockchain-based alt-TLDs, many new gTLD applicants would face the very real risk of additional friction and huge extra costs.

Blockchain domain firm raises $2.5 million

Switzerland-based startup Freename said it has secured $2.5 million in seed funding to pursue its ambitions in blockchain-based domain names.

The round was led by Sparkle Ventures with participation from Abalone Asset Management, Golden Record Ventures, Blockchain Founders Fund, and Sheikh Mayed Al Qasimi, a member of a UAE royal family.

Freename, which can be found at freename.io, says it enables pretty much anybody to register a TLD on a blockchain and then earn 50% of the reg fee whenever somebody registers a second-level domain in that TLD.

The “free” appears to mean as in speech, rather than as in beer. If I want to register .murphy, it will apparently set me back $4,099, meaning I’d have to sell over 1,600 2LDs at $5 a pop to make my money back. A gibberish string of characters will cost $79. Freename says it does not charge renewal fees.

It also seems to be reserving strings when they match a “brand, organization, or notable person”, weakening the case that blockchain offers
a liberating alternative to the centralized control inherent to the ICANN root.

Terms associated with some crimes also appear to be blocked, as are strings that match existing generic TLDs in the authoritative DNS.

The company says it has issued 5,000 TLDs on multiple blockchains since it launched last year, but of course users need to install a custom browser plug-in for any of them to actually resolve.

Freename says it hopes to help make these “Web3” domains compatible with traditional “Web2” DNS over time.

Blockchain startup gets $5 million to apply for gTLDs

A company backed by some familiar industry names has raised $5 million in seed funding to apply to ICANN for new gTLDs and, it says, bridge the gap between the traditional DNS and blockchain alternate roots.

Las Vegas-based D3 Global is being led by Fred Hsu, one of the founders of aftermarket pioneer Oversee.net. Among its listed founders are Paul Stahura, one of the triumvirate that launched Donuts, now Identity Digital, to apply for hundreds of gTLDs in 2012.

Also listed as founders are Shayan Rostam, who’s currently building Internet Naming Co into a prominent new gTLD portfolio player, former Network Solutions engineer Shay Chinn and investment banker Michael Ho.

These are people with domain industry experience going back in some cases to the 1990s and track records of building successful disrupters, so it’s worth paying attention no matter what you think of blockchain stuff.

D3 says it plans to apply to ICANN for traditional TLDs but will also introduce interoperability with blockchain-based “Web3” naming systems.

Hsu said in a press release: “We are committed to driving forward the convergence of the traditional DNS system and Web3 to make domain names more versatile, secure, and universally accessible.”

It also talks of introducing a marketplace that combines traditional DNS names with blockchain to “significantly reduce the friction traditionally seen in domain name transactions, such as low transparency, high broker fees, transfer delays, and escrow services.”

The funding round was led by Shima Capital with participation from Lightshift, Dispersion Capital, VentureSouq, Infinite Capital, MZ Web3 Fund, Kestrel0x1, Nonagon, C² Ventures, Arthur Hayes’ Maelstrom, Stahura himself.

ICANN turns down money from blockchain alt-root

It seems ICANN is turning down free money from blockchain alt-root providers, apparently as a matter of principle.

We hear one such alt-root, Freename.io, tried to sponsor the upcoming ICANN 78 meeting in Hamburg, but was rebuffed.

“At this time, ICANN is not interested in having Freename serve as a sponsor and will not be moving forward with a sponsorship agreement,” the Org told the company in an unsigned email.

Freename had offered to be a general sponsor, and not at the cheapest tier, I’m told.

ICANN sponsorship offers typically start in the low thousands but can get up to six figures at the higher tiers. Sponsorship is overall a very small part of ICANN’s revenue.

Org has become increasingly rattled in recent years with the proliferation of alt-roots, which have been gradually gaining market acceptance while ICANN’s own efforts to expand the domain universe languish in interminable policy knots.

ICANN delayed the sale of the UNR portfolio of gTLDs until buyers renounced their ownership rights to blockchain versions of their authoritative root strings.

Clearly, splashing an alt-root’s branding all over an ICANN stage would be seen as problematic.

Freename.io plans to attend the Hamburg meeting anyway.

.art links DNS and alt-root ENS

UK Creative Ideas, the .art gTLD registry, has started offering its registrants the ability to register names on the blockchain-based alt-root Ethereum Name Service that exactly match their DNS names, for a one-time fee.

CMO Jeff Sass said that for $20, paid in Ethereum coin, registrants can secure their exact-match on the ENS, with no renewal fees.

There’s an authentication system using DNS TXT records to make sure only .art DNS registrants can obtain their matching ENS names, he said.

“We’ve married the two together, so there can’t be any confusion or collisions,” he said.

The benefit of this is that registrants will be able use their .art domains to address their cryptocurrency wallets. Web browsers that support ENS obviously already support DNS, so there’s no real benefit in that context.

.ART is also selling ENS .art names without matching DNS names — and these can include ICANN-prohibited characters such as emojis — but these are priced from $5 to $650, based on character count, and have annual renewal fees.

.art current has about 230,000 registered names, a pretty respectable number for a new gTLD, and Sass said about 60% of them are in the form of firstnamelastname.art, suggesting usage by professional and amateur artists.

gTLD registries selling matches in alt-roots has been a cause of concern at ICANN over recent years, due to legal concerns. Uniregistry’s sale of its portfolio was held up for months because of this.

First two proper registrars join Web3 Domain Alliance

Two significant ICANN-accredited registrars have signed up to a body that commits them to, among other things, endorse the position that blockchain-based alt-root TLDs have trademark rights to their strings.

United-Domains and MarkMonitor are among about 50 companies now listed as new members of the Web3 Domain Alliance, the association created late last year by well-financed alt-root registry Unstoppable Domains.

The other companies listed appear to be players in the crypto/blockchain/Web3/NFT space, rather than the traditional domain name industry.

The moves by the two registrars are significant because the Alliance’s platform stands to be a significant thorn in ICANN’s side when it finally opens up the next new gTLD application round, which could happen in the next couple years.

According to the Alliance’s web site, members have to commit not only to promote the market acceptance and interoperability of blockchain alt-root domains, but also:

To advocate for the policy position that NFT domain registry owner-operators create trademark rights in their web3 TLDs through first commercial use with market penetration.

This could be a big problem in the next new gTLD round, as current ICANN policy proposals, developed before the likes of Unstoppable became such a big deal, do not specifically account for claims by alt-root providers.

Trademark owners will be able to challenge gTLD applications if the applied-for string matches their mark, but historically it’s not really been possible for companies to obtain trademarks on TLDs.

Along with the membership announcement, Unstoppable has said that it will not enforce its patents against any Alliance member that implements its standards, provided the member agrees not to enforce its own patents.

United-Domains is part of United-Internet, the same company that runs IONOS, 1&1, Sedo and InternetX.

MarkMonitor, since November, has been part of Newfold Digital, the parent of Network Solutions, Web.com, Register.com, BigRock, SnapNames, and others.

Unstoppable Domains stops over 116,000 domains as alt-root TLD goes dark

Blockchain alt-root provider Unstoppable Domains has taken a huge credibility hit with its decision to essentially turn off one of its TLDs, rendering over 116,000 domains pretty much useless.

Unstoppable said Tuesday that it has stopped selling .coin domains and would immediately stop supporting their resolution. The names would no longer work with the over 500 cryptocurrency wallets, apps and services that integrate with Unstoppable, the company said.

“As of today, we’ve disabled .coin resolution in our libraries and services. Unstoppable domains are self-custodied NFTs, so you still own your .coin domain, but it won’t work with our resolution services or integrations,” Unstoppable said in a blog post.

According to AltRoots.com, there were almost 117,000 .coin domains at the time they were turned off.

That’s about the same size as Identity Digital’s .email gTLD, and the shutdown is the equivalent of ID telling its registrants that they can keep their domains, but it’s deleting the .email zone file.

The decision drew immediate critical reaction on social media, with many users pointing out that the Unstoppable system doesn’t sound particularly “decentralized” or censorship-resistant any more.

“Doesn’t sound too decentralized or empowering. Hopefully this will wake people up,” one Twitter user wrote.

“So many people literally just had to change their identity due to incompetency. Basically like visa saying you can keep the card but it wont work anywhere anymore,” wrote another.

Users also criticized the company’s decision to offer compensation in the form of store credit — three times what they paid for the domains they return — instead of a cash refund.

Unstoppable said the decision was made after it discovered another blockchain project, Emercoin, has been selling .coin domains since 2014, whereas its own .coin was launched in 2021.

“We’re committed to protecting our customers from the risk of functional collision,” Unstoppable said. “The Emercoin team are pioneers in our industry and we regret that we weren’t aware of this naming collision earlier.”

Name collisions are of course a big deal in the regular DNS, but cohesion around a single consensus root allows risk to be managed and mitigated, as we saw in ICANN’s 2012 new gTLD roll-out.

And in the ICANN system, a TLD would not simply be shut off overnight. Rather, it would transition to an emergency back-end operator for three years until it is either taken over by another permanent registry or wound down in an orderly fashion.

As Domain Name Wire notes, Unstoppable is currently trying to get the operator of a competing .wallet blockchain alt-root TLD shut down in court on the basis of the name collision, and it would have been hypocritical to continue offering its own colliding TLD.

ICANN puts blockchain on the agenda for good

ICANN’s board of directors is apparently worried about the rise of blockchain-based alt-roots.

Its Board Technical Committee voted in May to make blockchain a permanent agenda item going forward, according to just-published minutes.

“After discussion, the Committee decided to have a standing topic on the agenda to address Blockchain Names,” the minutes read.

The minutes don’t record the content of the discussion, but the alt-root topic has been addressed at every one of the committee’s meetings since last July and resulted in the CTO’s office putting together a briefing paper I blogged about last month.

Blockchain alt-roots include the likes of ENS, Handshake and Unstoppable. They are likely to present legal challenges and interoperability problems when ICANN finally opens up the next round of new gTLDs in a couple years.

Unstoppable targets another city gTLD with free domains

Alt-root provider Unstoppable Domains has inked another partnership with a city that already has its own gTLD in the authoritative root.

The blockchain domains company said it has linked up with the City of Miami’s Venture Miami project, which encourages tech investment in Miami, to offer $50 in Unstoppable’s alternative domains to anyone attending Miami Dade College or showing up at an event there over the weekend.

For nine out of 10 of Unstoppable’s extensions, that’s enough to buy at least one domain. The company does not charge renewal fees.

It’s the second city recently that Unstoppable has partnered with, following its offer of free domains to all female residents of Abu Dhabi a couple of weeks ago.

In both of these cases, the cities in question already have their own gTLD in the authoritative, functioning, ICANN root. Unstoppable’s extensions, which are largely themed around crytopcurrency, mostly do not function without browser plug-ins.

While .abudhabi has only about a thousand registered domains, .miami, which was acquired from MMX by GoDaddy last year and has the city as a partner, has been more popular, with close to 16,000 names in its zone file currently.

Whether this can be dismissed as more “web3” hype or alt-root snake oil or not, Unstoppable seems to have secured a couple of pretty interesting marketing coups, and it will be interesting to see which city gets targeted next.

Crypto domains: a feminist issue?

Unstoppable Domains has found a novel way to market its alt-root domains service — give away hundreds of thousands of free domains to female entrepreneurs and women in general.

In two separate announcements over the last few days, partners committed to give away well over a million domains, part of Unstoppable’s push to persuade women that alt-roots and “Web3” are good ideas.

First, Access Abu Dhabi, a project of the Abu Dhabi Investment Office, said it will give a domain for free to “all women residing in the UAE capital”, which is believed to be about one million people.

Abu Dhabi is an overwhelmingly immigrant and overwhelmingly male city. Men are believed to outnumber women 2:1 in the UAE, a nation where until this year women could be jailed or flogged for the crime of extramarital sex.

It’s also one of a handful of cities in the world to have its own gTLDs in the authoritative root — .abudhabi and the Arabic-script equivalent — but while fees are not too high (about $40) registration restrictions are pretty strict, requiring among other things a passport scan.

The announcement by Access Abu Dhabi was made in conjunction with Unstoppable Women of Web3, an Unstoppable spin-off project set up a few months ago to pitch alt-root crypto domains to women.

Unstoppable Women is also behind a separate announcement from The Female Quotient, an equality services company, which is promising to give away up to 600,000 domains to women at its “Equality Lounge” events at various tech conferences over the coming months.

Unstoppable’s alt-root TLDs include .x, .crypto, .bitcoin, .coin and .wallet. Prices usually range from $20 to $100, but there are no renewal fees.

Female entrepreneurs obtaining these domains will quickly realize that they don’t work for the vast majority of internet users and are probably not a sound foundation for building a business.