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GoDaddy and XYZ sign away rights after UNR’s crypto gambit

Kevin Murphy, April 19, 2022, Domain Registries

ICANN has started asking registries to formally sign away ownership rights to their gTLDs when they acquire them from other registries.

GoDaddy and XYZ.com both had to agree that they don’t “own” their newly acquired strings before ICANN would agree to transfer them from portfolio UNR, which auctioned off its 23 gTLD contracts a year ago.

GoDaddy bought .photo and .blackfriday for undisclosed sums in the auction, it emerged last week. XYZ bought 10 others and newcomer Dot Hip Hop bought .hiphop.

All three transfers were signed off March 10 (though GoDaddy’s were inexplicably not published by ICANN until last Thursday, when much of Christendom was winding down for a long weekend) and all three contain this new language:

The Parties hereby acknowledge that, notwithstanding anything to the contrary in any marketing or auction materials, documentation or communications issued by Assignor or any other agreements between the Parties or otherwise, nothing in the Registry Agreement(s) or in any other agreements between Assignor and Assignee have established or granted to Assignor any property or ownership rights or interest in or to the TLDs or the letters, words, symbols or other characters making up the TLDs’ strings and that Assignee is not being granted any property or ownership rights or interest in or to the TLDs or the letters, words, symbols or other characters making up the TLDs’ strings.

The Parties represent that they understand the scope of ICANN’s Consent, which: (A) does not grant Assignee any actual or purported property or ownership rights or interest in or two the TLDs or the letters, words, symbols or other characters making up the TLDs’s strings; (B) is solely binding and applicable to the assignment of rights and obligations pursuant to the Registry Agreement(s); (C) solely relates to the operation of the TLDs in the Domain Name System as specified in the applicable Registry Agreement(s); and (D) does not convey any rights to the letters, words or symbols making up the TLD string for use outside the Domain Name System.

The TL;DR of this? Registries don’t “own” their gTLDs, ICANN just allows them to use the strings.

The new language is in there because UNR’s auction had offered, as a bonus, ownership of matching non-fungible token “domains” on the blockchain-based alt-root Ethereum Name Service.

Alt-roots arguably present an existential threat to ICANN and a risk to the interoperability of the internet, so ICANN delayed authorization of its approvals for many months while it tried to figure out the legalities.

Dot Hip Hop, for one, has said it couldn’t care less about the Ethereum NFT, and has had it deleted.

Separately, the .ruhr contract has been transferred from regiodot to fellow German geo-TLD operator DotSaarland, a subsidiary of London-based CentralNic, which announced the acquisition in February.

This assignment agreement was signed March 31 — after GoDaddy’s and XYZ’s — and does not include the new ownership waiver language, suggesting that it’s unique to UNR’s auction winners.

However, the friction between blockchain alt-roots is likely to be an issue when the next new gTLD application round opens.

It’s being said that a great many “TLDs” are being registered on various blockchains specifically in order to interfere with matching ICANN applications, and that blockchain fans are attempting to delay the next round to give their own projects more time to take root.

GoDaddy’s two acquisitions bring the total known outcomes of UNR’s auctions to 13 out of 23 gTLDs. At least four more are being processed by ICANN, according to a now month-old statement.

With mystery auction winner, .sexy prices go from $25 to $2,500

Kevin Murphy, March 28, 2022, Domain Registries

UNR is increasing the annual price of a .sexy domain from $25 to over $2,000, according to registrars.

The price increase will hit from April 30, according to registrars, but will not affect renewals on domains registered before that date.

French registrar Gandi said its retail price for a .sexy name will increase from $40 to $2,750. That’s after its mark-up. Belgian registrar Bnamed said in January prices were about to get 100 times more expensive.

The current wholesale price for .sexy is believed to be $25 a year. I’m guessing it’s going up to about $2,500, which is a price tag UNR has previously experimented with for its car-related gTLDs.

UNR CEO Frank Schilling has previously defended steep price increases for TLDs that under-perform volume-wise.

.sexy had barely 6,000 names under management at the last count, having peaked at about 28,000 in 2017.

The question is: who’s decided to increase the prices? Did .sexy actually sell when UNR tried to offload its portfolio last year, or is UNR keeping hold of it?

.sexy was among the 23 gTLD contracts UNR said it sold, mostly at auction, about a year ago. But it’s not one of the ones where the buyer has been yet disclosed.

The gTLDs UNR said it sold were: .audio, .blackfriday, .christmas, .click, .country, .diet, .flowers, .game, ,guitars, .help, .hiphop, .hiv, .hosting, .juegos, .link, .llp, .lol, .mom, .photo, .pics, .property, .sexy and .tattoo.

Of those, a new company called Dot Hip Hop bought .hiphop and XYZ.com bought .audio, .christmas, .diet, .flowers, .game, .guitars, .hosting, .lol, .mom and .pics.

ICANN has approved those 11 contract reassignments — after some difficulty — and said that there are six remaining in the approval process.

That only adds up to 17, meaning there are six more that UNR said it sold but for which it had not, as of a week ago, requested a contract transfer.

But in May last year, UNR “announced gross receipts of more than $40 million USD for its 20+ TLDs”, said there had be 17 participating bidders, and that 10 to 20 had “came away as winners, including six who will be operating TLDs for the first time”.

That leaves with at least five as-yet undisclosed winners from outside the industry, six contract transfers outstanding, and six gTLDs with an unknown status.

Neither UNR nor ICANN have been commenting on the status of pending transfers.

ICANN is blocking 23 gTLD transfers over blockchain fears

ICANN is objecting to the transfer of 23 new gTLDs from UNR to an unknown number of third parties, because it’s scared that the associated non-fungible tokens may break the internet and its own authority over it.

The mystery of how UNR’s auction in April of its entire new gTLD portfolio has so far not resulted in a single ICANN Registry Agreement changing hands appears to have been solved.

It’s because UNR bundled each contract sale with a matching top-level “domain name”, in the form of an NFT, on the Ethereum Name Service, an alt-root based on the Ethereum blockchain, and ICANN is worried about what this means for both the long-term interoperability of the DNS and its own ability to act as the internet’s TLD gatekeeper.

This all emerged in an emergency Request for Reconsideration filed by a company called Dot Hip Hop, which bought .hiphop from UNR earlier in the year.

It turns out .hiphop is the TLD alluded to by Digital Asset Monetary Network, which in October became the first to out itself as a UNR buyer while not naming its gTLD. The purchase was made separately from the April auction, despite .hiphop being “mistakenly” listed as one of the lots.

It also turns out that consultant Jeff Neuman, who’s been a leading figure in the ICANN community since its inception, was behind long-time employer Neustar’s application for .biz, and is a big fan of musical theater, is chief legal officer of and a partner in DHH.

In his reconsideration request, Neuman rages against the fact that it had been over 120 days at time of writing since DHH and UNR had applied to have the .hiphop contract reassigned, but that ICANN is continuing to drag its feet despite DHH long ago passing its due diligence review (which Neuman says cost an excessive $17,000).

DigitalAMN lists DHH as a subsidiary in its recent Securities and Exchange Commission filings. The company is publicly listed but essentially pre-revenue, making its ability to start selling domain names rather quickly rather important.

ICANN has repeatedly delayed approval of the reassignment, provided no visibility into when approval will come, and has repeatedly asked the same questions — largely related to the NFTs — with only slight rewording, Neuman says:

ICANN Org has already communicated to DHH that it has already met all of the criteria required under the Registry Agreement. Yet still, ICANN is withholding consent based on its mere curiosity about the former owner of the .hiphop, TLD (UNR Co), and based on the questions that ICANN keeps re-asking, has presumably conjured up non-issues that: (a) have already been addressed by DHH on multiple occasions over the past 123 days, (b) are beyond the scope of ICANN’s mission, and (c) are philosophical, fictional and frankly do not exist in this matter.

The ENS NFT is a “de minimus” component of the transaction that DHH didn’t even know about until after it had already decided to buy .hiphop, the request states, and ICANN has no authority over the blockchain so the existence of an NFT is not a valid reason to deny the reassignment.

I think I also detect a race card being played here. The RfR spends a bit of time talking about how ICANN’s foot-dragging is making the Org look bad to “traditionally underserved communities where the Hip Hop culture has thrived, globally”.

Apparently referring to DigitalAMN, the RfR states:

In addition to such partner being established at the birthplace of Hip Hop (Bronx New York), by its founder who shares the same birthdate as Hip Hop (August 11th), its mission is to provide financial literacy and economic opportunities for those communities and cultures that are traditionally under-represented, under-funded and under-valued.

DigitalAMN is majority-owned and led by Ajene Watson, who is black. One of company’s stated goals is to connect early stage companies with capital from non-traditional investors (not just the “privileged few”) using non-traditional means.

The RfR goes on to say:

The most dominantly underserved, under-funded and under-valued communities, are also those that embrace and are part of the Hip Hop culture. This Partner has embraced what seemed to be an opportunity to provide domain name registration services to a culture that knows nothing of ICANN, nor the domain name industry. Now, its first impression of the ICANN community is unnecessary delay, a lack of transparency, and bureaucratic indecision—just another gatekeeper to prevent equitable access. In their eyes, they consistently see deadlines that are never met (by ICANN), a lack of information as to why their launch is being held up, and an entity (ICANN) that takes weeks/months to act on anything with no end in sight. In their view, it would appear that ICANN, as an organization, cares nothing about serving the public interest, or about the impact of its actions (or in this case inactions) on the undervalued communities this Partner aims to support.

It should be noted that 22 other unrelated UNR gTLD reassignments are also in limbo, so it’s not like ICANN has a problem in particular with hip-hop music or those who enjoy it.

ICANN, in its response to the RfR, lays all the blame with UNR for, it says, refusing to provide “fulsome and complete” answers to its questions about the NFTs. In a December 10 letter to Neuman, ICANN VP Russ Weinstein wrote:

Significant questions remain, including regarding the role and rights conveyed to the proposed assignees related to the NFTs created on the ENS. For these reasons, ICANN must continue to object to and withhold its consent to all pending Assignments proposed by UNR, including yours.

The RfR was denied by ICANN’s Board Accountability Mechanisms Committee on a technicality. DHH had filed an “emergency” request based on ICANN’s staff inaction, but emergency requests only apply to board action or inaction.

Neuman appears to have known this in advance. It appears DHH just wanted to get something in the public record about the state of play with UNR’s gTLDs.

ICANN seems to have two problems with the NFTs, and they’re both big, existential ones.

First, ENS is essentially an alt-root, and when you have competing roots there’s the risk of TLDs colliding — two or more registries claiming authority for the same TLD — breaking the global interoperability of the internet.

Second, but related, the existence of alt-roots threatens ICANN’s authority.

ICANN has no authority over ENS or the NFT names that live on it, so for a registry to run a TLD in the both the authoritative ICANN root and the alt-root of the ENS could cause problems down the road.

While NFTs can be “owned”, gTLDs are not. UNR is merely the party ICANN has contracted with to run .hiphop. While UNR and any subsequent assignees have a presumptive right of renewal, it’s possible for ICANN to terminate the contract and hand stewardship of the gTLD to another registry. It’s not merely a hypothetical scenario.

Should that ever happen with .hiphop, ICANN wouldn’t have the authority to seize the ENS NFT, meaning the old registry could carry on running .hiphop in the ENS while the new registry runs it in the ICANN root, again breaking global DNS interoperability.

You could spin it either way — either ICANN is worried about interoperability, or it’s worried about protecting its own power. These are not mutually exclusive, and are both probably true.

One thing’s the sure, however — in roadblocking these gTLD transfers, ICANN is playing into the hands of critics and blockchain fanboys who argue for decentralized control of naming, with ICANN as their bogeyman.

ICANN takes the lamest swipe at Namecheap et al over blockchain domains

Kevin Murphy, November 24, 2021, Domain Tech

ICANN has come out swinging against blockchain domains and the registrars that sell them. And by “come out” I mean it’s published a blog post. And by “swinging” I mean “offered the weakest criticism imaginable”.

The post starts off well enough, observing that services marketed as “domain names” that are not automatically compatible with the global DNS are probably not a great purchase, because they don’t work like regular domains.

Using these alternatives requires something like a browser plug-in or to reconfigure your device to use a specialist DNS resolver network, the post notes, before concluding with a brief caveat emptor message.

All good stuff. ICANN has been opposed to alt-root domain efforts for at least 20 years, and the policy is even enshrined in so-called ICP-3, which nobody really talks about any more but appears to still be the law of ICANN Land.

So, which domain-alternatives is ICANN referring to here, and which registrars are selling them? The post states:

Name resolution systems outside the DNS have existed for a long time. One could mention the Sun Microsystem Network Information Service (NIS), the Digital Object Architecture (DOA), or even the Ethereum Name Service (ENS)…

With some ICANN-accredited registrars now selling NIS, DOA, or other similar domains alongside standard domain names, the potential for confusion among unsuspecting customers seems high.

You may be asking: what the heck (or, if you’re like me, fuck) are NIS and DOA domains, and which registrars are selling them?

Great questions.

NIS is an authentication protocol (a bit like LDAP) for Unix networks developed in 1985 (the same year the original DNS standard was finalized) by Sun Microsystems, a company that hasn’t existed in over a decade.

To the best of my knowledge they’ve never been marketed as an alternative to regular domain names. Nobody’s ever used them to address a publicly available web site. Nobody sells them.

DOA, also known as the Handle System, is a more recent idea, first implemented in 1994, before some of you were born. Handles are mostly numeric strings used to address digital objects such as documents. Libraries use them.

The main thing to know about Handles for the purposes of this article is that they’re specifically designed to convey no semantic information whatsoever. They’re not designed to look like domain names and they’re not used that way.

So how many registrars are selling NIS/DOA domains? I haven’t checked them all, but I’m going to go out on a pretty sturdy limb and guess the answer is “none”, which is a lot less than the “some” that ICANN asserts.

But ICANN also mentions the Ethereum Name Service, a much newer and sexier way of cybersquatting, based on the Ethereum cryptocurrency blockchain.

ENS allows people to buy .eth domain names (which do not function in the consensus DNS) for the Ethereum equivalent of about $5. As far as I can tell, you can only buy them through ens.domains, and no ICANN-accredited registrar is functionally capable of selling them.

The ICANN post also contains a brief mention of “Handshake”, and this appears to be what ICANN is actually worried about.

Handshake domains, also known as HNS, look like regular domain names and a handful of ICANN-accredited registrars are actually selling them.

Handshake is also based on blockchain technology, but unlike ENS it also allows people to create their own TLDs (which, again, do not function without special adaptations). Registrars including Namecheap, 101domain and EnCirca sell them.

It’s Namecheap’s storefront hover text, warning that HNS domains don’t work in the regular DNS, that ICANN appears to be paraphrasing in its blog post.

The registrar has a lengthy support article explaining some of the ways you can try to make a Handshake domain work, including an interactive comment thread in which a Namecheap employee suggests that DNS resolvers may choose to resolve HNS TLDs instead of conflicting TLDs that ICANN approves in future.

That’s the kind of thing that should worry ICANN, but it’s got a funny way of expressing that concern. Sun Microsystems? Digital Object Architecture? What’s the message here?

Twenty years ago, I interviewed an ICANN bigwig about New.net, one of the companies attempting to sell alt-root domains at the time. He told me bluntly the company was “breaking the internet” and “selling snake oil”, earning ICANN a snotty lawyer’s letter.

Today’s ICANN post was ostensibly authored by principal technologist Alain Durand, but I’m going to give him the benefit of the doubt and assume comms and legal took their knives to it before it was published.

While some things haven’t changed in the last two decades, others have.

Biggest .co flip ever — bought for $25, sold for $300,000

Kevin Murphy, May 14, 2021, Domain Sales

A domain investor has reportedly sold the domain eth.co for $300,000, making it the second-highest amount a .co domain has sold since the ccTLD relaunched in 2010.

Domain marketplace Efty today reports that MagnumDomains used its platform to sell the domain via its buy-it-now function, with no broker involvement.

eth.co is expected to refer to Ethereum, the blockchain cryptocurrency, but it doesn’t seem to be clear whether the buyer is an end-user or fellow investor.

It’s believed to be the second most-expensive .co domain ever sold, and the most-expensive sold by a domain investor.

The previous record-holder is o.co, which .co registry .CO Internet (now part of GoDaddy) famously sold to Overstock.com for $350,000 during its relaunch back in 2010.

The eth.co seller bought the domain for $25 back then, before Ethereum existed, and has been sitting on it ever since, according to Efty.

MMX makes $100,000 .luxe premium sale

Kevin Murphy, May 24, 2019, Domain Sales

MMX says it has sold a package of premium .luxe domain names for $100,000.
The registry announced this week that it has sold “a small number of .luxe names for a combined value of $100,000 in a single trade”.
Depending on what that “small number” is, the individual per-domain value may not be all that much.
MMX CEO Toby Hall would only tell DI that the package comprises fewer than 100 domains.
That would still put at least a four-figure price on each domain, which I’m sure many domainers would regard as near-miraculous for a string such as .luxe.
.luxe was originally intended to have a connection to luxury goods, but MMX has repurposed it as its inroad to the blockchain space.
Domains are being primarily sold to address cryptocurrency wallets, primarily in Asia, in the Ethereum blockchain.
There are currently over 5,700 domains in the .luxe zone file.

DNS inventor says .luxe first innovation in a decade

Kevin Murphy, December 10, 2018, Domain Registries

DNS inventor Paul Mockapetris has endorsed MMX’s foray into the blockchain as “the first genuine piece of DNS related innovation that I have seen in the last decade”.
The quote came in an MMX press release this morning, which provided an update on the launch of .luxe as the first gTLD that publishes information to the Ethereum blockchain as well as the DNS.
As I attempted to describe a few months ago, .luxe is being sold as an alternative way to address blockchain assets such as cryptocurrency wallets, which currently use nonsense, immemorable 40-character hashes.
MMX has built an API that allows registrars to automatically associate .luxe domains with Ethereum addresses.
The registry said today it now has 11 registrars signed up to use this API, along with 60 more selling vanilla .luxe domains.
In addition to its launch distribution partner, the wallet provider imToken, MMX said it has also signed up Bitxbank, BeeNews, BEPAL, Hillstone Partners, Math Wallet, MTC Mesh Network, Qufen, Fbee, and ChainDD, which all appear to be Asian blockchain software companies.
It expects to announce support for two non-Ethereum blockchains in the first half of next year.
Judging by zone files, .luxe names have not exactly been flying off the shelves since launch.
It had around 2,600 names in its zone file yesterday, having entered general availability about a month ago.
Despite this, CEO Toby Hall said in this morning’s press release that MMX’s initial investment in .luxe (I assume he’s referring to the R&D investment rather than the cost of applying for the gTLD) has already been recouped.

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.