Opinion by: Fred HSU, Co-Founder and CEO on D3
A small -owned business sits on a premium domain like organic.shop. They will buy for months and not find a buyer at their requesting price.
Meanwhile, someone around the world only bought one part of a Manhattan apartment by tokenized real estate in under five minutes.
This difference describes a dazzling inconsistency in our digital economy. While the real world of asset (RWA) tokenization market career towards A $ 400 trillion -headed market, the domain industry remains trapped in Web2’s immovable disadvantage despite the management of 360 million registered domains and a $ 10 billion premium segment.
The refusal of the domain industry to embrace tokenization will destroy billions -billions of value and market dominance over web3 -giving systems such as Ens.
Stocks, real estate, and carbon credits embrace the liquidity of the blockchain, while the risk of domains becomes unknown dinosaurs on the Internet.
The Domains of the tokenization wave are missing
Tokenization is a start to rewrite how important trade is around the world. Tokenized treasury today value In more than $ 7 billion, which provides instant liquidity for traditionally slow -moving government security security.
The fractional platforms of the owner -owner let small investors buy at Manhattan Skyscraper or patent portfolios that were previously accessible to institutions.
Smart contracts remove brokers, escrow services and paperwork that has traditionally been slowing the transfer of property. Arrangements occur in minutes instead of weeks. Global markets operate 24/7, rather than in business hours in specific time zones.
Technological ability exists to change domain trading immediately. The question is why an industry developed in digital change allows the friction of the analog.
The antique economy of the domain
The sale of a domain today feels noticeable as in 1999. The average domain sale lasts three to six months, thinking it reaches completion. Brokers charge a 15% -30% commission compared to less than 1% for tokenized assets.
Geography and capital barriers are artificially limit potential buyers. A brilliant trader in Lagos may have a perfect vision for developing a premium domain, but there is no access to traditional payment systems or credit repair that domain brokers usually demand.
Due to these dispute points, less than 1% of registered domains Goods Every year. It represents massive economics in a theoretical market that costs a billion -billions of dollars.
https://www.youtube.com/watch?v=TECW0lfikwg
The situation becomes particularly absurd when you consider that domains represent pure digital assets that should be forever fluid than physical real estate or security security. Instead, they are better off trading than any category.
The penalty of change is growing
This liquidity crisis creates cascading problems that extend more than slow sales processes. Premium domains represent significant -valid value that can change change if properly locked by modern financial infrastructure.
Startups cannot use domains as collateral for defi loans because traditional banking systems do not recognize digital properties. Defi protocols cannot verify domain -owned by legacy register systems. This financing gap limits the opportunity entrepreneurs around the premium digital real estate.
Voice.com sells $ 30 million in 2019. However, that transaction lasted months of communication and excluded potentially higher fractional bid from smaller investors who could collectively appreciate the owner higher than any single buyer.
Related: Bitcoin’s early domains headed to the auction
Web3 providing systems such as Ens get traction, partly because they offer native blockchain integration with a lack of legacy domains. This represents competitive pressure from technically lower but financial alternatives that solve liquidity problems by design rather than thinking.
Developing a modern domain infrastructure
Tokenizing domains require resolving technically successfully met by other real World Asset (RWA) categories. The main framework involves converting domains to tradable NFTs that maintain compliance with ICANN while activating fractional ownership and instant regulating.
Crosschain liquidity allows domain trading throughout Ethereum, Solana, and other networks based on user preferences rather than technical limits. Dao can be collectively owned by premium domains with management tokens that represent fractional stakes in possession and voting rights in developing decisions.
The regulatory path will appear brighter for domains than other RWA categories as the domains represent the established digital property with well-defined frameworks of ownership recognized by ICANN and international law.
Early mors in the tokenization of the domain also get incredible benefits through the network’s effects that dominate the reward platform. The first registers to implement the tokenization properly will attract premium domain -seeking premiums, attracting entrepreneurs who seek quality inventory.
Market interruption is already happening
The domain industry shows early signs of Competitive pressure From alternative blockchain-natives. Web3 providing systems gain adoption despite technical limits as they solve liquidity problems that are ignored by traditional domains.
The investment capital is increasingly flowing towards the tokenized assets that offer fractional ownership and integration of the DEFI. This change creates opportunity costs for investors considering premium domains with no similar capabilities.
Traditional domain trading platforms face potential interruptions from blockchain-based alternatives that can offer more user experiences. First-mover’s advantages over the tokenization of the domain can prove that it is difficult for established players to overcome once market preferences move to alternatives.
The inevitable transition
The tokenization of the domain represents evolution rather than the revolution. Infrastructure exists, demand is proven by other RWA categories, and economic incentives clearly favors the increase in liquidity in ongoing friction.
Companies that embrace the move ahead will establish platform advantages that make it difficult to replicate as the market lasts. Resistants will find themselves competing with more outdated measures of value.
Without a change, the domains would be the only basic type of owner who is still trapped in web2 trading mechanisms. The first registers that will properly implement the tokenization will dominate the next period of digital owner by providing the premium of liquidity that has been wanted by the domain for decades.
The domain industry has built an Internet address system. Now, it must participate in the financial evolution of the Internet before leaving it completely.
Opinion by: Fred HSU, co-founder and CEO in D3.
This article is for general information purposes and is not intended to be and should not be done as legal or investment advice. The views, attitudes, and opinions expressed here are unique and do not necessarily reflect or represent the views and opinions of the cointelegraph.
