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 offering free .nft names to Twitter users

Unstoppable Domains is enabling Twitter users to claim free “domains” in its alt-root blockchain-based TLD .nft.

The site offers users a domain that matches their Twitter handle. You only need to authorize its app to log in using Twitter credentials, much like other Twitter-connected apps.

Actually using the name seems to require you to have a cryptocurrency wallet. And of course you won’t be able to use the name to address a web site unless all your visitors use a specialist plug-in or certain browsers.

Unstoppable usually sells .nft names for $29, with no renewal fees. It says it currently has 3.1 million names across its portfolio of crypto-themed alt-root TLDs.

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.

It’s ICANN versus the blockchain in Kuala Lumpur

Internet fragmentation and the rise of blockchain-based naming systems were firmly on the agenda at ICANN 75 in Kuala Lumpur today, with two sessions exploring the topic and ICANN’s CTO at one point delivering a brutal gotcha to a lead blockchain developer.

Luc van Kampen, head of developer relations at Ethereum Name Service, joined a panel entitled Emerging Identifier Technologies, to talk up the benefits of ENS.

He did a pretty good job, I thought, delivering one of the clearest and most concise explanations of ENS I’ve heard to date.

He used as an example ICANN’s various handles across various social media platforms — which are generally different depending on the platform, because ICANN was late to the party registering its name — to demonstrate the value of having a single ENS name, associated with a cryptographic key, that can be used to securely identify a user across the internet.

Passive aggressive? Maybe. But it got his point across.

“We at ENS envisage a world where everyone can use their domain as a universal identifier,” he said. Currently, 600,000 users have registered 2.4 million .eth domains, and over 1,000 web sites support it, he said.

He described how ENS allows decentralized web sites, is managed by a decentralized autonomous organization (DAO) and funded by the $5 annual fee for each .eth name that is sold.

Van Kampen had ready responses to questions about how it would be feasible for ENS to apply to ICANN to run .eth in the consensus root in the next new gTLD application round, suggesting that it’s something ENS is thinking about in detail.

While not confirming that ENS will apply, he described how a gateway or bridge between the Ethereum blockchain and the ICANN root would be required to allow ENS to meet contractual requirements such as zone file escrow.

What did not come up is the fact the the string “eth” is likely to be reserved as the three-character code for Ethiopia. If the next round has the same terms as the 2012 round, .eth will not even enter full evaluation.

But the real gotcha came when ICANN CTO John Crain, after acknowledging the technology is “really cool”, came to ask a question.

“What kind of safeguards and norms are you putting in place regarding misbehavior and harm with these names?” Crain asked.

Van Kampen replied: “Under the current implementation of the Ethereum Name Service and the extensions that implement us and the integrations we have, domains are unable to be revoked under any circumstances.”

“So if I understand correctly, under the current solution, if I’m a criminal and I register a name in your space, I’m pretty secure today,” Crain asked. “I’m not going to lose my name?”

Van Kampen replied: “Under the current system, everything under the Ethereum Name Service and everything registered via us with the .eth TLD are completely censorship resistant.”

Herein lies one of the biggest barriers to mainstream adoption of blockchain-based alt-roots. Who’s going to want to be associated with a system that permits malware, phishing, dangerous fake pharma and child sexual abuse material? Who wants to be known as the maker of the “kiddy porn browser”?

If I were Crain I’d be feeling pretty smug after that exchange.

That’s not to say that ICANN put in a wholly reassuring performance today.

Technologist Alain Durand preceded van Kampen with a presentation pointing out the substantial problems with name collisions that could be caused by blockchain-based alt-roots, not only between the alt-root and the ICANN root, but also between different alt-roots.

It’s a position he outlined in a paper earlier this year, but this time it was supplemented with slides outlining a hypothetical conversation between two internet users slowly coming to the realization that different namespaces are not compatible, and that the ex-boyfriend of “Sally” has registered a name that collides with current boyfriend “John”.

It’s meant to be cute, but some of the terminology used made me cringe, particularly when one of the slides was tweeted out of context by ICANN’s official Twitter account.

To learn more about alternative naming systems, read #ICANN's OCTO publication >> https://t.co/LFYjy1KX3w | Emerging Identifier Technologies #ICANN75 pic.twitter.com/mWN7fCc7eR

— ICANN (@ICANN) September 21, 2022

Maybe I’m reading too much into this, but it strikes me as poor optics for ICANN, an organization lest we forget specifically created to introduce competition to the domain name market, to say stuff like “Market, you are a monster!”.

I’m also wondering whether “icannTLD” is terminology that plays into the alt-root narrative that ICANN is the Evil Overlord of internet naming. It does not, after all, actually run any TLDs (except .int).

The language used to discuss alt-roots came under focus earlier in the day in a session titled Internet Fragmentation, the DNS, and ICANN, which touched on blockchain alt-roots while not being wholly focused on it.

Ram Mohan, chief strategy officer of Identity Digital and member of ICANN’s Security and Stability Advisory Committee, while warning against ICANN taking a reflexively us-versus-them stance on new naming systems, wondered whether phrases such as “domain name” and “TLD” are “terms of art” that should be only used to refer to names that use the consensus ICANN-overseen DNS.

We ought to have a conversation about “What is a TLD”? Is a TLD something that is in the IANA root? Is a domain name an identifier that is a part of that root system? i think we ought to have that conversation because the place where I worry about is you have other technologies in other areas that come and appropriate the syntax, the nomenclature, the context that all of us have worked very hard to build credibility in… What happens if that terminology gets taken over, diluted, and there are failures in that system? … The end user doesn’t really care whether [a domain] is part of the DNS or not part of the DNS, they just say “My domain name stopped working”, when it may not actually be a quote-unquote “domain name”.

Food for thought.

Alt-root .eth is getting very big, very fast

If .eth was a real domain, it would be the second-largest new gTLD and have more registrations than ccTLDs from nations as large as Spain and Japan, according to the blockchain-based registry.

Ethereum-based alt-root registry ENS Domains today tweeted that it added 301,000 new .eth domains in August, to end the month with a total of 2.17 million names. It said it now has 540,000 registrants.

August 2022 stats for ENS

– 301K new .eth registrations (total 2.17m names)
– $4.7m in protocol revenue (all goes to the @ENS_DAO)
– 2,744 ETH in revenue (3rd highest month)
– 34K new eth accounts w/ at least 1 ENS name (total 540k)
– >99% of OpenSea domain vol pic.twitter.com/utU8i4cBMT

— ens.eth (@ensdomains) September 1, 2022

For context, that’s about 10% of what .com does in a month, and about 75% of monthly registration volume for .xyz, the largest new gTLD.

The total of 2.17 million domains would make .eth bigger than .online, the current second-largest new gTLD, and would put it in the top 10 ccTLDs (of those tracked by DI).

Not bad for a niche product that won’t resolve in most browsers and is chiefly useful for addressing cryptocurrency wallets.

Group crowdfunding crypto to apply to ICANN for blockchain gTLD

Do we have our first confirmed blockchain-themed new gTLD application? Looks like it.

A group of pseudonymous individuals have announced plans to apply to ICANN for .dao in the next round, and are currently crowdfunding the project by asking for donations in the Ethereum cryptocurrency.

Going by the name DomainDAO, they say they’ve raised 230 ETH so far, which appears to be worth over $430,000 at today’s rates, already probably enough for a bare-bones new gTLD application.

They want to apply for .dao, an acronym for “decentralized autonomous organization”, a type of entity where token-owning participants set the direction of the DAO via rules laid down in software and votes encoded into a blockchain.

DomainDAO’s web site takes a few pops at the likes of Verisign and Identity Digital owner Ethos Capital for alleged unethical practices and says the goal is for .dao to one day “supersede” .com.

The concept differs from other blockchain-based TLD projects, such as Unstoppable Domains, in that it’s not alt-root. The plan is to apply to ICANN to get into the authoritative, consensus DNS root, so that .dao domains can be used by all.

Unstoppable already runs .dao in its own alt-root, selling domains for $20, and has recently proven litigious when it smells a collision from a competing project.

But the main roadblock to the root may well be ICANN itself.

While the rules governing the next round of gTLD applications are not yet set in stone, it strikes me as incredibly unlikely that ICANN will entertain a bid from an applicant that is not a recognized legal entity with a named board of directors that can be subjected to background screening.

DomainDAO is itself a DAO, and the DAO concept is reportedly prone to corruption and hacking, which could make ICANN nervous.

In addition, people funding DomainDAO today are offered crypto tokens that can be redeemed for second-level domains if the TLD eventually goes live — it’s essentially already selling pre-registrations — which could interfere with rights protection mechanisms, depending on implementation.

But DomainDAO claims to have an industry Greybeard on the payroll, a senior advisor going by the handle “Speech-less”, an “Executive with 20+ years experience in domain and ICANN”.

If that’s you, we probably already know each other. Why not get in touch to tell me why this thing is going to work?

Tucows’ domains business stagnates again in Q2

Tucows’ domain name business has experienced its third consecutive quarter of stagnating growth.

The company yesterday reported third-quarter total domains revenue of $61 million, compared to $62.3 million a year ago and $61.5 million in the second quarter.

Dave Woroch, CEO of Tucows Domains, described this 2% annual decline as “consistency” on a prerecorded address to analysts.

He pointed to Verisign’s recent comments about a decrease in .com registration volumes as evidence of an industry-wide post-pandemic slowdown, but was somewhat bullish on some new gTLDs.

“At the other end of the industry, we do see more robust growth in many of the new gTLDs that are of higher quality and that have little to no speculation or cyber crime opportunity,” he said.

The domains industry is “generally not showing a lot of growth”, he said, adding that “outsized growth would need to come from new areas”, which could include so-called “web3” efforts.

Woroch noted the recent funding of blockchain alt-root project Unstoppable Domains, but said Tucows is not a fan. Unstoppable has, like similar efforts dating back over 20 years, some “fatal flaws” and “a chicken and egg problem” of adoption, he said.

Domains under management at Tucows decreased to 24.8 million from 25 million sequentially and 25.6 million a year ago.

Tucows’ retail domains revenue was down to $8.5 million from $8.9 million a year ago, while the wholesale business, including value-added services, was down to $52.3 million from $53.4 million.

Including non-domains businesses, Tucows’ Q2 revenue was up 11% to $83.1 million and the net loss was $3.1 million compared with net income of $1.8 million a year ago.

Unstoppable valued at over $1 billion after huge new investment

Unstoppable Domains has received a huge new funding round that the company says means it now has a valuation in excess of $1 billion.

The $65 million Series A round was led by Pantera Capital, with a whopping 17 other venture capital firms taking part, according to the company.

Unstoppable is an alt-root player, offering blockchain-based domains in nine TLDs such as .nft, .blockchain, .crypto and .wallet.

Much of its work to date has been on persuading crypto currency users to use Unstoppable domains to replace the otherwise cumbersome and confusing addresses of their crypto wallets, but the names can also be used to address web sites if you use the right browser software.

Unlike the regular domain name industry, where much of the investment attractiveness comes from the possibility of high-margin recurring renewal revenue, Unstoppable sells its names for a one-time fee. It presumably has other revenue sources in mind for long-term growth.

The traditional domain name industry, ICANN, and potential new gTLD applicants should pay attention.

If, as seems likely, some of the TLD strings Unstoppable is using in its alt-root are applied for in the next new gTLD round, a well-funded competitor that has already proven itself litigious when it comes to name collisions could prove a formidable opponent.

Of course, some potential applicants might see a well-funded alt-root player as an invitation to apply for colliding strings in the hope of a quick pay-off at private auction.