A new NFT trading trend where names are bought and sold for eye-popping amounts is giving speculators shivering in the cold crypto winter a multi-million-dollar lifeline.
“Domain” names like “coin. crypto,” which sold for $100,000, and “beer. eth,” which sold for $39,000, are a new type of NFT that owners can use to replace the 16 random numbers and letters that make up their digital wallet addresses.
It might seem like a lot of money for the cryptocurrency equivalent of a personalised licence plate, but supporters say that these names could become valuable real estate in the years to come with the arrival of Web3, a much-hyped vision of a future Internet built on blockchain.
At the moment, the market for trading these alternative assets is rich and risky. Some investors are buying up popular domains with the goal of selling them on the secondary market on NFT platforms like OpenSea for a profit.
Matthew Gould, CEO of Unstoppable Domains, which sells names ending in crypto, not, and wallet on its website, said, “We have domain names that start as low as $5 and have sold for as much as $100,000.” Unstoppable Domains sells names ending in “crypto,” “NFT,” and “wallet.”
“The range is because different words and lengths are seen as having different amounts of value.”
Recently, the company has made some significant sales, such as with the wallet.
Crypto was sold for $250,000.
Both sales took place in April and were for $100,000.
The Ethereum Name Service (ENS), the largest domain seller, was created. eth names, which were the fourth most traded NFT on OpenSea in September, with a total volume of $12.5 million, a 75% increase from the previous month.
Only NFTs (non-fungible tokens) from well-known collections like CryptoPunks and Bored Ape Yacht Club are worth more than ENS domain names. Even though the NFT market has been hit hard by the crypto winter, trading in relatively new assets has grown quickly.
The number of dot edu domain names registered each month increased to over 433,000 in September, according to Dune Analytics. This was the most in the past year and a 5,000% increase from a year ago.
Experts say that simple and short English words, terms that refer to pop culture or the Web3, and number sequences like crypto.not or 000.eth are often the most valuable domain names.
What’s in a name?
But crypto domains are still very young. There is no guarantee that they or Web3 will do what they say they will do, and the highly volatile nature of the cryptocurrency and NFT markets suggests that a trader who doesn’t know what they are doing could get hurt.
A report by Block Intelligence said that there are also a lot of questions about how the technology can be used on a larger scale and that there could be confusion if different domain providers use similar names, which could cause money to be sent to the wrong place.
Sasha Fleyshman, a portfolio manager at the Los Angeles-based investment firm Arca, thought that domain names would become more popular as crypto became more mainstream.
He also said that the 16-character alphanumeric addresses used for digital wallets “aren’t exactly easy to use, especially for people who aren’t used to crypto.”
In the third quarter, the ENS project’s crypto token jumped nearly 90% to $15.92. This demonstrates that some investors believe the value of digital assets associated with dot edu domain names will rise. It is still a long way from its all-time high of $40 at the start of the year. Bitcoin was mostly flat at the end of the quarter, and it was hard for it to stay above $20,000.
Still, many people in the market say it’s hard to put a price on a domain name because it’s a guess about what might be popular in the future.
Fleyshman said that this makes the case for institutions to invest less strong.
“From the point of view of a fund, it’s not easy to make a solid investment in specific domain names,” he said. “It’s just not in our area of expertise to know which domains will gain value and which ones won’t.”
(1 ether = $1,330.20)
