Comprehensive analysis of the global development of Web3 domain names

2023-05-05 13:04
Singapore
ENS, Unstoppable Domains, Space ID, including the Bitcoin domain name .sats, which has received a lot of attention recently, etc. If we divide a track for these projects, it should be called the "Web3 domain name" field.

There are already many articles that introduce different Web3 domain name projects separately, or introduce the overall situation. This article will not introduce a specific project in detail, but is more of a high-level overview, mixed with some personal information. Thinking, everyone is welcome to put forward more views and opinions for exchange.

1. Analysis of the reasons for the birth and continued development of Web3 domain names

First of all, let’s talk about the reasons why blockchain domain names, or more fashionable, “Web3” domain names will appear and continue to develop. I think there are three main points.

The first point is related to the current traditional domain name system of the Internet. Global Internet domain name top-level domain allocation, root zone file management and formulation of related rules are responsible for ICANN, a non-profit organization registered in California, USA. Although ICANN is open, equal and multi-party, It is a governed non-profit organization, but there are still potential risks such as centralized control; at the same time, the world's 13 root zone servers are managed by a few countries (10 in the United States, 1 in the Netherlands, 1 in the United Kingdom, and 1 in Japan), forming a global Internet single Border governance pattern.

Figure 1 shows the distribution of 13 root servers around the world.

The emergence of Bitcoin in 2008 brought new possibilities for the technical architecture and governance system of Internet domain names. For example, the early namecoin project in 2011 and the Handshake project that emerged in recent years all hope to use the decentralization, difficult to tamper, traceability and other characteristics of the blockchain to store Web 3 domain name data in blocks maintained by multiple parties. Between the chain nodes, potential threats such as centralized control and single point of failure are avoided. At the same time, users control the domain name by controlling the private key, so that the ownership of the domain name data is returned to the user.

Secondly, similar to the logic behind the emergence of the DNS system, the emergence of Web3 domain names also simplifies user operations and promotes the large-scale adoption of Web3. DNS provides mapping between domain names and IP addresses, so that users do not need to remember obscure IP addresses (such as 192.168.xxx.xxx), but only need to use human-readable domain names (such as baidu.com) to access the Internet The logic of the Web3 domain name is similar, except that it uses a Web3 domain name that is easy for humans to remember and read, replacing the blockchain address composed of a long string of random strings to facilitate transfer operations between blockchain networks.

Figure 2, V God’s Ethereum domain name and corresponding account address.

The third point is the economic value brought by Web3 domain names. We know that based on the brand value, special meaning or scarcity of different domain names, there will be secondary sales and purchases, and there will be some sky-high price transactions (such as Qihoo 360 Company (I bought 360.com from Vodafone for US$17 million); and in line with the same logic of speculation, Web3 domain names have added NFT attributes, that is, each Web3 domain name is a resaleable NFT brings greater transaction liquidity and the possibility of model innovation to the market.

Figure 3, the transaction status and transaction price of ENS domain name NFT listed on the ENS.Vision website.

2. An attempt to classify Web3 domain name projects

Web3 domain name projects are complex and full of fantastic ideas and innovative practices in this field. After sorting out nearly a hundred web3 domain name projects, the following is an attempt to classify projects in this field. It can be roughly divided into the following categories.

(1) "Single-chain" Web3 domain name projects. This type of Web3 domain name projects are often issued based on a certain blockchain and are fixed top-level domains. The top-level domain can generally reflect the brand value of the blockchain. Including the well-known Ethereum Name Service (based on Ethereum, fixed top-level domain .eth), Polkadot Name Service (based on Polkadot, fixed top-level domain .dot), Flowns (based on Flow chain, fixed top-level domain .fn), etc.

Figure 4, a single-chain Web3 domain name project based on a certain public chain.

This category contains the most projects in the Web3 domain name classification. Almost every public chain (currently including alliance chains) will launch a Web3 domain name project with the blockchain brand value suffix in order to promote its own on-chain ecology. .

(2) "Platform-type" Web3 domain name projects. These projects are based on several or multiple blockchain networks and provide domain name registration under multiple suffixes. Some projects can even directly register top-level domains. They are committed to creating a A platform for unified registration and management of Web3 domain names. Typical projects include Unstoppable Domains, freenames, EDNS, quik.com, etc. And according to the processing rules for top-level domains, it can be subdivided into multi-top-level domain type and unrestricted top-level domain type.

① Multi-top-level domain type, represented by Unstoppable Domains, etc. The project will provide popular words such as .crypto, .nft, .dao and other top-level domains for Web3 domain name registration. Generally, the name and number of top-level domains to be released are decided by the project side.

② There is no restriction on the top-level domain type, represented by freename, etc. Users can freely register the name of any Web3 top-level domain they want on the platform (provided that no one else has registered in advance). After the user obtains a certain top-level domain Later, other users can register subdomain names under the Web3 top-level domain, which can generate profits for the owners of the top-level domain.

Figure 5: Platform Web3 domain names are classified according to the openness of the top-level domain.

(3) Cross-chain type. This type of Web3 domain name project focuses on supporting cross-chain interoperability of multiple chains, typically the .bit protocol. Cross-chain support can be divided into cross-chain at the domain name resolution level and native cross-chain support at the chain level. Cross-chain at the domain name resolution level refers to the Web3 domain name project .a of chain A. Users can set 123.a to map to chain A address, chain B address, chain C address, etc. when binding. The native cross-chain at the chain level Chain refers to the support for creating and trading web 3 domain names on accounts in different chains. Currently, .bit has cross-chain support for four public chains: Ethereum, Tron, BNB Chain, and Polygon. This means that users can create an account on any of these four public chains and register their own .bit.

(4) Social application type, which prefers to use web3 domain names as the identity attribute representatives of the application layer, such as .key of the SNS domain name service on the Linkkey social protocol, .lens of the Lens Protocol social graph, etc.

Figure 6, web3 social network domain name project

(5) Decentralized type. The establishment goal of this type of project is to address the pain points of the current global Internet domain name system and hope to use blockchain technology to operate in a decentralized manner. Typical projects include the early namecoin and 2020 Handshake, currently namecoin is basically in a state of "disappearance". Handshake may not be as well-known in the public chain circle as ENS, Unstoppable Domains, SpaceID and other projects, but its current registration volume is one of the highest among many projects, and it is very popular in overseas technology circles. It has a high reputation and influence in the customer circle. It is worth mentioning that Handshake’s goal is not to replace the existing Internet’s DNS system, but to replace the root zone file and use the existing global DNS infrastructure plus blockchain to transfer centralized ICANN power to decentralization in the community. Handshake also provides the application and registration of "top-level domains" in the form of auctions, so Handshake is equivalent to the status of "decentralized ICANN". Everyone can become a domain name registrar on Handshake, and is allowed to register on platforms such as namebase. Conduct sales of Handshake second-level domain names.

(6) Unified spatial type. The Registry3 project launched by MetaScan is trying to unify the ecology of various web3 domain names. Registry3 hopes that different stakeholders can conduct fair negotiations and cooperation in the form of DAO, and allocate different domain name suffixes in Web3 to different project parties. , to avoid space collision. At the same time, Registry3 is also innovating in technology, providing a unified SDK for each web3 domain name service, and creating a layer 0 blockchain based on DAG to build a unified web3 domain name ecosystem.

Figure 7, Registry3 architecture diagram

3. Name space of Web3 domain name

At present, for most web3 domain name projects, the name space rules are completely consistent with the existing traditional domain name rules, that is, separated by "." to indicate the hierarchical relationship of domain names. What I want to express here is that if we look at the design of a domain name in terms of a pure name, it is actually a human-readable name identifier superimposed with a representation of hierarchical attributes. If we separate the name from the hierarchical relationship , then there may be more innovative expressions.

In addition, web3 domain names also have some interesting name space innovations. Here are three:

(1) space ID

Space ID once wrote in its introduction that colons ":" are used to represent different domains. For example, user Allan registered allan.bnb on BNB Chain, then he can use eth: allan to represent his name on the Ethereum domain. , use Bank:allan to express the name allan in the banking field, etc. However, as far as I know, this design does not seem to be online for use at present. Maybe we can see the promotion and use of the concept of this domain in the future.

Figure 8, space ID’s innovative namespace design

(2)Y.at

The emoticon domain name, that is, the name, is composed of emoticons selected and combined arbitrarily by the user. Yat provides people, animal environments, food, activities, travel locations, objects, and seven categories of emoticons to choose from. Users can use at least 3 or more emoticons to form a Yat domain name. Yat is currently widely used in art, music, culture and other fields.

Figure 9, Y.at domain name

(3)Threely

The web3 domain name system stipulates that the name can only be three-part, such as "hey.its.me", "pay.to.Jason", "party.like.rockstar", etc., which is very suitable for catchy English speaking. Expression is also the core point of this project.

Figure 10, threely domain name

4. Application of Web3 domain name

In terms of applications, various Web3 domain name projects are relatively homogeneous. The core application models include marking wallet addresses to facilitate transfers, NFT, subdomain name applications, and digital identity DID.

Among them, treating Web3 domain names as users' digital identities on the Internet, and using this as a basis for on-chain interaction of different applications, is the current focus and promotion point of most Web3 domain name projects. Web3 domain names will highlight the identity attributes of the domain name by carrying more user information. For example, ENS adds .xyz after .eth, and .bit protocol adds .cc after .bit. After entering the browser address box, it will jump to the host On the personal profile page for more information about users; at the same time, Web3 domain names are also decentralized identifiers, so they are naturally integrated with the concept of DID to create a user's self-sovereign identity under the web3 network.

Figure 11, enter nick.eth.xyz to jump to the personal profile homepage of ENS founder Nick Johnson.

5. Business model

The current business models of Web3 domain names are mainly divided into three categories: annual fee model, one-time payment model and auction model.

(1) Annual fee model In order to prevent behaviors such as domain name manipulation, users need to pay an annual fee to the project party every year. According to the length of the domain name, different amounts of annual fees are paid. This type of model can give the project party continuous revenue capabilities.

Figure 12, ENS charges different annual fees based on different name lengths.

(2) One-time payment model. This model is more in line with the concept of "self-sovereign identity". Once the user buys the domain name, he does not need to pay for it. Moreover, different fees are charged for different top-level domains based on the different length of the domain name. Pay. Project parties need to continue to release attractive top-level domains or attract users to continue to register to maintain revenue sources.

Figure 13, register "michael" under Unstoppable Domains, different one-time payments under different top-level domains

(3) Vickrey auction model. Vickrey combines concepts such as game theory. Users place bids without being able to see other people's bids. The highest bidder gets the domain name and pays the second highest bid at the same time. In the early days of 2017-19, ENS, as well as Handshake, etc., all used the Vickrey auction model.

6. Some problems faced by Web3 domain names

Web3 domain names are in the early stages of development and have shown strong development momentum and the development potential that may have a transformative impact on the Internet. However, Web3 domain names still face some development problems. The following is a summary of these problems:

(1) Ecosystem fragmentation

Web3 domain names are deployed on different blockchain networks, and if the underlying chains do not have good cross-chain interoperability, it will cause the fragmentation of the upper application ecosystem. Except for the Web3 domain name project that can provide cross-chain attributes, other Web3 domain names are limited to the ecosystem based on the chain they are deployed on.

(2) Competition for similar projects

Anyone can deploy Web3 domain name contracts on the blockchain, causing unnecessary competition and resource consumption. From a certain perspective, the web3 domain name is a matter of "consensus size". Anyone can publish a web3 domain name project with any top-level domain name on any chain. If there are many people who recognize this Web3 domain name, it will be supported and used. The more people this Web3 domain name has, the greater and stronger the "consensus" based on it will be, and the more valuable this Web3 domain name project will be. It is precisely based on this openness and consensus that many projects compete and consume resources in the Web3 domain name field. For example, everyone recognizes the value of ENS's .eth, but few people may know that there is also a .ether domain name service for Biao.eth on Ethereum, right?

Figure 14, ether name service project and its logo

(3) Name space collision

Namespace collision for the global Internet

It is fatal to build a unified name resolution function, including the collision of Web3 domain name and traditional DNS domain name space, and the collision of name spaces between Web3 domain name projects.

①The collision between Web3 domain name and traditional DNS domain name space

At present, Web3 domain names are not recognized by ICANN, the Internet's traditional domain name coordination and management organization. For example, the top-level domain of ENS. eth is the national top-level domain suffix of Ethiopia under the traditional domain name system. In this case, some projects do not care, and perhaps one of their publicity points is that they hope to replace ICANN and create a decentralized domain name system, so these projects will continue to publish and publish in the "consensus" circle they created. Use more Web3 domain names; and some projects will respect and actively integrate into the current DNS domain name system and try to avoid name space collisions. For example, Handshake, ENS, etc. will protect the registered DNS domain names. ENS uses the DNSSEC security mechanism. DNS domain name owners are allowed to use the ENS domain name space, and ENS has also stated in multiple public occasions that ENS is a "friendly army" of DNS and hopes to maintain and jointly build a unified global Internet network system.

② Name space collision between different Web3 domain name projects

Hot words such as .web3, .nft, .metaverse, .dao, etc. can easily cause collisions between the name spaces of two or more Web3 domain name projects, such as last year’s Unstoppable Domains and TwitterScan’s .nft top-level domain. Regarding name space collision issues, OpenSea also removed TwitterScan's .nft domain name from the shelves after UD sent a letter of infringement. Some projects will also draw on the power of the offline world, such as Freename, which allows users to apply for global trademark protection for their Freename top-level domain. After the user passes the KYC process, it will be processed through the Swiss Federal Intellectual Property Institute (IGE.ch) Legal protection.

Regarding DNS domain names and name space collaboration between different Web3 domain names, it is also worth mentioning the establishment of the Web3 Domain Alliance.

In November 2022, Unstoppable Domains took the lead and teamed up with 6 other Web3 domain name projects to jointly establish the web3 domain name non-profit organization Web3 Domain Alliance (W3DA), which is committed to creating a unified, open and inclusive web3 domain name through openness and collaborative cooperation. ecology.

Figure 15, Web3 Domain Alliance

At present, W3DA has more than 50 members. In addition to Web3 domain name project members, it also covers the participation of different stakeholders such as cryptocurrency exchanges, traditional ICANN registrars, blockchain wallet projects, underlying chain projects, traditional CA institutions, etc. , it deserves attention in the future, and I will write about it in detail when I have the opportunity.

Figure 16, W3DA member list

(4) Disadvantages of large-scale use of banned words, sensitive words, etc.

The registration logic of Web3 domain names is "first come, first served". In most cases, if the domain name searched by the user has not been registered, then he can have the name. The user can use his imagination to create the name he wants. There is no need during the operation. Review of prohibited words, sensitive words, etc. This is logical in our pursuit of freedom and decentralization in the Web3 world, but if we hope that Web3 domain names can really be adopted globally and on a large scale, the registration and management of some inappropriate words will also be a problem that needs to be faced. For example, parents in any country do not want their children to use or interact with a domain name that contains words such as murder and violence.

7. Will Web3 domain names replace the traditional domain name system in the future?

Now that we have said so much, let us finally ask a bold question: Will Web3 domain names replace traditional Internet domain names?

This is a question worthy of in-depth consideration, because Web3 may change the global Internet governance model, application ecology and business model in the future, and will profoundly affect everyone's life. From a market and technical perspective, Web3 domain names may currently face the following problems:

(1) The global large-scale adoption of Web3 depends on the improvement and support of policies, laws and regulations of various countries around the world, the improvement and interoperability of global blockchain infrastructure, and the lowering and better use threshold for users. The user experience (such as the upgrade of blockchain wallet) may not be an overnight process.

(2) Compatibility with the global Internet ecosystem and huge deployment challenges. It is unlikely that we will break away from the Internet TCP/IP system to build a separate "blockchain Internet". Therefore, the adoption of web3 domain names also depends on global browser manufacturers. Support, support from communication service providers, support from application developers, etc.

(3) Create a globally unified Web3 name registration and resolution space. Currently, there is a lack of effective solutions to the name space collisions between Web3 domain names and traditional domain names, as well as name space collisions between Web3 domain name projects.

It may be as stated in the article "Challenges with Alternative Name Systems" published by ICANN Chief Technical Expert Alain Durand in 2022, "none of the non-DNS alternative naming systems can act as a pure DNS replacement today. If the IPv4 to IPv6 transition is any indication, a transition to replace the DNS could potentially span multiple decades."

However, just like the rise of mobile phones that defeated the monopoly giant Kodak in the camera industry, the hegemon in a certain field may also be subverted by an unexpected change in an unexpected field. Who knows?