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TL;DR
1. The Web3 domain name performed well against the background of the overall downturn in the NFT market;
2. Web3 domain name has a huge user base and huge room for growth;
3. The Web3 domain name is an important Web3 identity certificate for the user, and the domain name can be used to access the full-chain application;
4. In the long run, the use of Web3 domain names is greater than the hype.
In the second half of this year, Web3 domain names performed well in the NFT market.
Taking ENS as an example, the trading volume of ENS in the past three months has increased by 22.48% month-on-month, and the total number of domain name registrations has exceeded 2.6 million. With the increase in transaction volume, domain name registration volume and user volume, ENS market capitalization has increased by 38.62% in the past three months.
In the past three months, NFTs with high prices in ENS accounted for six of the top ten in its history.
In addition to ENS, the number of domain name registrations and users of domain name projects such as SPACE ID and Unstoppable Domains ushered in rapid growth.
In the rapidly growing domain name track, Beep News found that Web3 domain names have become the standard configuration of public chains. The 38 domain name projects compiled by Beep News have deployed nearly 30 public links, and the new husband chain has domain name projects.
Among the new public chains, for example, Aptos and Sui have launched on-chain native domain name projects, and the Aptos on-chain domain name project Aptos Names has opened users to register domain names at the beginning of the Aptos mainnet launch.
Behind the rapid growth of Web3 domain names is the Web3 innovation based on traditional domain names.
The traditional domain name market has experienced rapid growth in the past 20 years and is close to saturation. However, Web3 domain names are still in the early stages of development. Comparing with traditional Web2 domain names, it has become a new growth point in the domain name market.
Compared with Web2 domain names, Web3 domain names are essentially different in mapping objects, carriers, methods, and ecology.
In terms of mapping objects, the Web3 domain name is mapped to the wallet address, and the Web2 domain name is mapped to the server.
In terms of carrier, the Web3 domain name carrier is NFT, and the Web2 domain name is recorded by an authoritative organization.
In terms of methods, the Web3 domain name adopts decentralized resolution, and the Web2 domain name adopts centralized resolution.
In terms of ecology, the Web3 domain name ecology is completely open, and Web2 domain name participants need permission.
In addition, the characteristics of Web3 domain names such as decentralization, anti-censorship, and user-controlled data solve the pain points of Web2 domain names.
Web3 domain names exist in the form of NFT and can be traded through the NFT market. In the recent downturn in the overall trading volume of the NFT market, the trading volume of Web3 domain names such as ENS and SPACE ID has maintained growth, and the trading volume is among the best.
The number of domain name registrations and user groups of Web3 has grown rapidly this year. Among them, the number of domain name registrations of Unstoppable Domains and ENS has exceeded 2 million, and the number of ENS users has exceeded 570,000.
The functions of the Web3 domain name include collecting information such as addresses and user accounts; aggregating user data; accessing dApps supported by the domain name; social account nicknames. Web3 domain names are designed to create users' Web3 business cards, and users use domain names to participate in social networking and experience Metaverse projects.
This article will explain four trends in the development of Web3 domain names:
1. Multi-chain deployment and multi-category domain name projects increase in Web3 domain names;
2. Deepen cooperation with other DID applications such as social graphs and reputation platforms;
3. Use is greater than hype;
4. The domain name competition pattern is similar to the public chain competition pattern.
Beep News compiled 38 Web3 domain name projects, involving nearly 30 public chains. (image description）
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Web3 domain name is the main growth point of the NFT market in the near future
The important difference between Web3 domain name and DNS lies in its carrier, DNS is recorded by authoritative organization, and Web3 domain name is recorded by NFT on the chain. Web3 domain names are expressed in the form of NFT and can be traded on the NFT market.
In the second half of this year, the overall performance of the NFT market was sluggish, while the Web3 domain name bucked the trend and became the main growth point of the NFT market.
This article selects ENS on the ETH chain and SPACE ID on the BNB Chain as examples.
According to NFTGo data, the trading volume of ENS in the last three months was 89.19 million US dollars, a month-on-month increase of 22.48%, and the market value reached 95.95 million US dollars, a month-on-month increase of 38.62%.
During the same period, the performance of the NFT market was sluggish. The total transaction volume in the last 30 days was 1.48 billion US dollars, a month-on-month decrease of 74.1%.
NFTGo data shows that ENS is very popular with NFT whales. The number of NFT whales holding ENS domain names is 683, ranking first among NFT projects on the ETH chain. (Note: NFTGo's comment on the NFT giant whale is an NFT collector with a value of more than 1 million US dollars)
SPACE ID is the most outstanding NFT project on BNB Chain recently.
The transaction volume of SPACE ID in the last 30 days ranks first on the BNB Chain. According to NFTScan data, the transaction volume of SPACE ID in the last 30 days was 18,665.39BNB, the number of NFT transfers exceeded 220,000, and the number of transfers on the chain also ranked first.
The growth of ENS and SPACE ID transaction volume is related to the number of registered domain names and the number of holders.
The data website shows that there are 2.67 million ENS registered domain names, and the number of NFT holders is 565,000. SPACE ID currently has more than 260,000 domain names and 86,000 NFT holders.
Although the average transaction price of the two is low, the number of NFTs and the huge holder group have increased their transaction volume.
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Features of Web3 Domain Names
The Web3 domain name is the cornerstone of decentralized identity authentication (DID), providing users with a Web3 identity card.
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(1) Collection address, user account number and other information
Web3 domain names can be directly bound to wallet addresses, email accounts, NFT trading platform accounts, etc. Users can directly use a unified domain name to receive and send Tokens and NFTs.
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(2) Aggregate user data
The Web3 domain name can be used as the user's Web3 identity card and information data storage tool.
Taking .bit as an example, .bit supports users to create a decentralized personal website. The personal website can display information such as wallet address, dApp, social account, DNS, creative content, etc. All data storage is realized through IPFS.
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(3) Access dApps supported by domain names
Web3 domain name service providers are integrated with dApps of various types (DeFi, encrypted wallets, NFT, etc.), and users can directly use domain names to access these dApps.
Taking ENS and .bit as examples, the ENS official website shows that ENS has supported 59 wallets, 439 on-chain applications (types include DeFi, NFT, DAO tools, SocialFi applications, etc.), and 14 browser plug-ins.
According to the .bit official website, there are 107 applications in the .bit ecosystem, including DID, NFT market, wallet, data platform, DeFi, SocialFi application, etc.
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(4) Social account nickname
Web3 domain name holders can use it as a social account nickname for Web2 applications (Twitter, Facebook, etc.), and have a unified identity card in Web3 and Web2 social networking.
For example, Vitalik Buterin, the co-founder of Ethereum, used vitalik.eth as a nickname for his Twitter account.
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Web3 domain names are both human readable and decentralized, and user privacy protection is questionable
Zooko's triangle paradox refers to the trilemma of the three ideal properties of the domain name system in the network, that is, the domain name system cannot be decentralized, secure and human-readable at the same time. Web3 domain names are both human-readable and decentralized, but the privacy protection of users is questionable due to the transparency of the blockchain.
Decentralization is the essential difference between Web3 applications and Web2 applications. All data exists on the chain, and the data is controlled by users, which solves the centralization problem of Web2 domain names.
Human readability refers to providing meaningful and memorable names to users. Compared with cumbersome wallet addresses, users are more likely to remember short and memorable characters.
The Web3 domain name makes up for the poor human readability of the wallet address. Various symbols (letters, numbers, emoji, etc.) can be added to the domain name to create a domain name that is easy to display and has the user's personal style.
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Web3 domain name project introduction
Beep News counted 38 Web3 domain name projects deployed on 30 public chains. Among the public chains counted, the number of Web3 domain name projects on ETH, BNB Chain, and Polygon chains ranked the top three.
Among these domain names, the top three domain name registrations are Handshake, Unstoppable Domains, and ENS. Handshake has more than 7 million domain name registrations, and Unstoppable Domains and ENS domain name registrations have exceeded 2 million.
In addition to the above three, Bonfida, .bit, SPACE ID, and Tezos Domains have registered more than 100,000 domain names.
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(1) Unstoppable Domains
1 Introduction
Unstoppable Domains is an NFT domain name provider. Users can register domain names with suffixes such as .crypto/.nft/.x/.wallet. The domain name is bound to the wallet address. Enter the domain name to receive, send and store encrypted assets.
According to the official website, Unstoppable Domains already supports 294 Tokens and integrates 472 applications. Users can directly use domain names to access these applications.
Domain name holders can create a personalized Web3 homepage based on the domain name, displaying social accounts, NFT collections, NFT avatars, and achievements on the chain.
NFTgo data shows that the current number of Unstoppable Domains domain name registrations exceeds 2.7 million.
Unstoppable Domains is characterized by more emphasis on NFT domain names, and the combination of domain name use cases and NFT scenarios is more extensive.
2. Fees
Users can own domain names permanently for a one-time payment, ranging from $5 to hundreds of thousands of dollars.
3. Ecology
According to the official website of Unstoppable Domains, it is integrated with 472 applications, and domain name holders can directly access these applications.
Use cases for these applications include trading domain names (e.g. OpenSea), payments (e.g. MoonPay), storing and managing domain names (e.g. Trust Wallet), communication (e.g. Skiff Mail), domain name tools (e.g. Unstoppable Transactions), decentralized websites (e.g. Brave Browser) and so on.
Unstoppable Domains supports applications on ETH, Polygon, and Zilliqa chains.
4. Financing information
Unstoppable Domains completed a $65 million Series A round of financing in July this year, with a valuation of $1 billion.
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(2) ENS
1 Introduction
ENS launched the Ethereum mainnet in May 2017. It is the largest domain name service provider on the Ethereum chain. Users can register domain names with the suffix .eth. Domain name holders can directly use the domain name to receive, send and store assets on the Ethereum chain .
According to the official website, the current number of domain name registrations has reached 2.62 million, and the number of users has exceeded 570,000. ENS has been integrated with 507 applications. Domain names can directly use domain names to access these applications. These applications include Uniswap, OpenSea, Decentraland, etc. The integration with Decentraland means The ENS domain name can be used as the identity of the Metaverse.
ENS is compatible with DNS domain names. If users already have DNS domain names (such as .com, .io), they can still use DNS domain names in ENS.
2. Fees
ENS's domain name service is billed and paid according to the character length of the domain name.
Domain names with a length of 5 characters: pay $5 per year;
4-character domain names: $160 per year;
3-character domain names: $640 per year.
3. Agreement income
According to Token Terminal data, the revenue of the ENS protocol in the last 30 days was 3.56 million US dollars. The highest single-day income in the last 30 days was $174,000 on September 26. The highest single-day income in the past six months was US$1.964 million on May 2.
4. Valuation
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(3) Handshake
1 Introduction
Handshake is a decentralized domain name system developed by namebase, which was launched on the mainnet in March 2020. Handshake allows anyone to register a top-level domain name, which can be a traditional top-level domain name such as my.wallet/, or a custom top-level domain name such as satoshi/, wallet, and the domain name holder can use the domain name to complete the transfer.
Users can trade on the namebase official website, use the Handshake domain name, and use their native Token HNS to pay for the transaction. Some Handshake domain names with more popular characters have experienced a substantial appreciation after multiple transactions.
According to the official website of namebase, the latest transaction prices of pow/ and dapp/ domain names are among the top ten in history, and the revenue of pow/ has increased by 8450%.
According to public data, the current number of Handshake domain name registrations has exceeded 7 million.
The feature of Handshake is that it allows users to register top-level domain names, and stipulates that HNS tokens can be used to buy and sell domain names, and gain income by managing domain names.
2. Fees
The price of domain name registration varies. Users need to use HNS to register domain names and purchase domain names.
3. Financing information
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(4).bit
1 Introduction
.bit, formerly known as DAS, is a decentralized domain name system developed based on Nervos CKB. .bit positions domain names as data storage.
Domain names contain data and ownership. Data includes wallet addresses, social media accounts, point-to-point encrypted communication accounts, web browsers, decentralized websites, etc., and ownership is mainly private keys.
.bit allows users to freely define character content, which is not limited to letters, numbers, special symbols, emoji, pictures, etc.
According to the .bit official website, the total number of registered domain names is 163,000, the number of users is 54,000, and the number of ecological partners is 107.
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2. Ecological application
According to the official website of .bit, 107 projects have entered its ecology. The project categories include domain name registration platform, data platform, NFT market, DeFi application, wallet, etc.
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3. Financing information
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(5) SPACE ID
1 Introduction
SPACE ID is a full-chain domain name service provider on the BNB Chain chain. Users can bind their identities to multiple chains, allowing users to use the same domain name on different chains, simplifying operations. The community can build its own top-level domain name service through the SPACE ID network.
SPACE ID emphasizes the combination of TLD (top-level domain name) and multi-chain domain name service. If user Allen sets the general domain name to Allen, he can set his identity as:
- BAYC：001
- ETH: Allen (allen.eth)
- BNB: Denali (denali.bnb)
SPACE ID has a TLD (top-level domain) that can be used to resolve other domains and name services. This means that developers only need to integrate SPACE ID's SDK to integrate with all other major name services.
NFTScan data shows that the number of SPACE ID domain name registrations exceeds 270,000, and the domain name NFT transaction volume in the last 30 days ranks first on the BNB Chain. Users can trade SPACE ID domain names on Element, TofuNFT, NFTrade and Binance NFT trading platforms.
2. Ecological application
The official website of SPACE ID shows 52 applications integrated by SPACE ID. The application types involve DeFi, NFT, wallet, Metaverse, SocialFi and other tracks, and the applications involve multiple public chains. The integration with the Metaverse application allows the SPACE ID domain name to become the user's identity card in the Metaverse.
3. Fees
Dune data shows that the average registration cost of SPACE ID is 0.0505 BNB, and the highest registration cost is 5 BNB.
4. Financing information
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Domain Name Value Judging Criteria
The Web3 domain name is an improvement on the Web2 domain name, and the general domain name evaluation standard can be used. The domain name evaluation criteria are mainly divided into these three parts: domain name suffix, prefix length and memorability, language and voice applicability.
Among the domain name suffixes, the domain names with higher market usage and influential subjects have relatively higher value. Taking the Web3 domain name as an example, the greater the number of users in the public chain, the higher the value of the domain name on the chain, such as .eth on the ETH chain, .bnb on the BNB Chain, and .sol on the Solana chain.
In terms of prefix length and memorability, domain names with a prefix length of 2 to 7 characters have the best value, and domain names with a prefix length of more than 10 characters usually have a lower value.
In terms of language and voice applicability, domain names of words or phrases are more valuable. For example, domain names prefixed with dapp, pow, lp, etc. in encryption are more valuable than domain names formed by lengthy and irregular alphabetical arrangements.
Combining the above criteria, taking ENS as an example, there are the following types of domain names with relatively high value in ENS:
1. Company domain names (such as nike.eth, starbucks.eth)
2. Digital domain names (the transaction price of 000.eth is 300ETH)
3. First name and last name domain names (such as jack.eth)
4. Noun domain names (such as dapp.eth, pow.eth)
5. Emoji domain names
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Web3 domain name development trend
Web3 domain names are the cornerstone of DID. Against the background of rising popularity of the DID track, Web3 domain names have become an outstanding segment in a relatively sluggish market. Great room for growth.
In addition, trends such as cross-chain and cross-layer Web3 domain names, custom domain names, and accelerated integration with Metaverse and social applications have emerged.
This article will explain four trends in the development of Web3 domain names:
1. Multi-chain deployment and multi-category domain name projects increase in Web3 domain names;
2. Deepen cooperation with other DID applications such as social graphs and reputation platforms;
3. Use is greater than hype;
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(1) Multi-chain deployment and multi-category suffix domain name projects increase in Web3 domain names
The multi-chain deployment trend of Web3 domain names has appeared in the top domain name projects. Unstoppable Domains, .bit, Trust Domains, and Nomspace have achieved multi-chain deployment. SPACE ID, as a full-chain domain name service provider, supports users to access mainstream public chains through domain names Applications.
With the gradual expansion of the ecology of Web3 domain names, Web3 domain names support applications on multiple chains, and users can use a unified account to access applications on other public chains.
Taking .bit as an example, .bit has already integrated ETH, Tron, BNB Chain, and Polygon, and plans to integrate public chains such as Bitcoin, Flow, Solana, and Cosmos in the future, and eventually become a full-chain domain name service provider.
Multi-chain deployment is very important for the domain name project. The domain name project is oriented to the user's needs for full-chain application interaction. If the domain name is limited to a single chain, the user can only access the application on one chain through the domain name, then if the user wants to access other chains To upload applications, you need to register other domain names, and the synchronization of information and data between different domain names is another problem.
In the end, users have registered many domain names in order to access applications on multiple public chains, and both registration and management are very troublesome.
On the contrary, the domain name project that supports multiple chains solves this problem. Users only need one domain name to switch between the applications of each chain, and the information and data are synchronized on one domain name, which is convenient for user management and improves user experience.
Domain names with multi-category suffixes are designed to provide users with more choices for domain name registration.
For example, Unstoppable Domains provides user-registered domain name suffixes such as .crypto, .nft, .x, etc. Users can choose suffixes according to specific needs.
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(2) Deepen cooperation with other DID applications such as social graphs and reputation platforms
Web3 domain names have certain intersections with social graphs and reputation platforms in terms of identity authentication, on-chain information display, and data aggregation.
1. The intersection of Web3 domain name project and social graph
The social graph aims to organize and present users' on-chain portraits and behaviors in different ways, and solve the problem of Web3 user data ownership.
Taking Lens Protocol as an example, Lens Protocol revolves around Profile NFT. Profile NFT contains metadata including the history of all posts, retweeted articles, comments and other actions generated by users. When a user logs in to an application based on Lens Protocol, all the data in the Profile NFT can be synchronized.
The Web3 domain name also contains the metadata of the user. Users participate in the interaction on the chain through the domain name. The role of the domain name is like a wallet address, and the interaction data of the domain name is reflected on the chain. On the decentralized website launched by the Web3 domain name project, user metadata can be displayed on the personal homepage.
The social graph is a good integration object for Web3, not only because the two have many overlapping points, but also as an extension of the Web3 domain name, the social graph can visualize the data information stored in the Web3 domain name.
The most typical example is Lens Protocol. Lens Protocol is not only a social graph, but also shows users' on-chain behaviors, and displays information such as bound wallets, social media, and created content through the user's personal page. Users can also have .lens Domain name, used in the Lens Protocol ecological application.
2. The intersection of Web3 domain name project and reputation platform
Reputation platforms (such as POAP, Galxe) give badges to users who meet the criteria based on their on-chain behavior, and these badges are credited in the form of NFT.
In the Web3 domain name project, ENS has integrated POAP, and SPACE ID has integrated Galxe. The reputation platform badges obtained by users can be displayed on the personal homepage related to Web3 domain names. Users can use domain names to access the reputation platform, and the two can realize information and data synchronization.
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(3) Use is greater than hype
From the perspective of transaction volume, the transaction volume, protocol revenue and market value of ENS have dropped a lot from the high point, while the domain name registration volume has reached 2.62 million, and the number of users has exceeded 570,000, all of which are in a stage of rapid growth.
Another set of data, W3.Hitchhiker’s statistical distribution of ENS transaction prices in July shows that 91.84% of the transaction prices are lower than 1ETH. In the range of 0-1ETH, the majority of transaction prices are lower than 0.01ETH. It shows that the overall transaction price of ENS is low, and the domain name hype is not obvious.
The floor price and recent average transaction price of NFT of other top domain name projects are also relatively low, which is similar to ENS.
From the perspective of the project itself, Web3 domain names are the cornerstone of DID, with practical use cases. Users can use domain names instead of wallet addresses to trade digital assets such as cryptocurrencies and NFTs. Domain names can be used as general accounts for Web3 applications, and identity credentials for SocialFi projects and Metaverse projects.
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(4) Domain name competition pattern and public chain competition pattern converge
From the perspective of registration volume, Unstoppable Domains and ENS domain name registrations both exceeded 2 million, ranking second and third respectively. Domain name projects on the Ethereum chain occupy an absolute leading position in competition with other chains.
The number of domain name registrations, users, and public chain users are highly correlated. Therefore, the huge base of Ethereum ecological users will still lead Unstoppable Domains and ENS domain name registrations in the long run. Both domain names on the Ethereum chain Its leading position is currently difficult to shake.
The market share of the public chain determines the value of the domain name to a certain extent. The .eth in the Web3 domain name is like the .com in the Web2 domain name. User awareness and market adoption determine that the ENS with the .eth suffix is at least in the short term. It is ahead of .bnb, .sol and other projects with domain names suffixed with public chain codes.
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