Tokenizing Domains! Bridging Two Worlds, 3DNS Enables URLs to Receive Cryptocurrency
Tokenizing Domains! Bridging Two Worlds, 3DNS Enables URLs to Receive Cryptocurrency
#621
GM,
First, an announcement about an event. The quadratic funding campaign is back!
Blocktrend is participating in a quadratic funding campaign jointly organized by the public funding platform Giveth and ThankArbitrum. The latter has contributed 150,000 ARB (approximately $100,000) to the matching fund pool, allowing the public to vote with small donations to decide how much funding each project will receive. This is an alternative form of participatory budgeting, where the more people support a public project, the more budget allocation it can receive.
Giveth and Gitcoin have similar functionalities and could be considered competitors. I enjoy participating in Giveth because donors can receive a 75% GIV token rebate of their donation amount afterwards. In other words, if you donate $100 to support a project, you could receive up to $75 worth of GIV tokens airdropped to you, along with a POAP participation certificate. The more projects you support, the higher the proportion you can receive. I invite everyone to add their favorite projects to the cart. Let's get into the main topic.
Last week, I used a new application called 3DNS to enable cryptocurrency payment functionality for my URL mnhsu.xyz, making it not just my URL (DNS), but also my wallet address (ENS). 3DNS also minted my URL into an NFT. In the future, I can transfer the ownership of the URL via blockchain or integrate decentralized applications. To understand the significance of these new features, we can start with the familiar process of bank transfers.
Phone Number Transfers
Do you remember your bank account number? Being able to recall more than two sets of numbers indicates an extraordinary memory. Like bank account numbers, wallet addresses are system-assigned random numbers. People often forget their own set account numbers, so forgetting a bank account number isn't surprising. However, phone numbers are shorter, and writing them down a few times makes them easier to remember.
To reduce the problem of people entering the wrong account numbers and transferring money incorrectly, Taiwan's financial institutions launched the "Mobile Number Transfer Service" in 2020. Users who activate the service can bind their bank account to their mobile number, allowing them to transfer money by entering the mobile number without having to write down the bank account number.
In the online world, people face similar inconveniences. Website URLs are as easy to remember as phone numbers, but wallet addresses are more complex than bank account numbers. Even though there is the Ethereum Name Service (ENS1), most browsers do not recognize URLs ending in .eth. After all, .eth is not a top-level domain recognized by the international organization ICANN, and special methods are needed to make it a website URL.
It would be ideal if website URLs could also serve as payment addresses, similar to phone number transfers. Previously, I made a video demonstrating how to register a URL via GoDaddy and then bind the website URL to a wallet address. In the future, when someone enters the URL in a browser, they can view the website, and when they enter the URL in a wallet, it transforms into a payment account.
The main character of today’s article- 3DNS, which also has the same functionality, but it goes a step further by tokenizing the URL, allowing it to be traded on the blockchain like an NFT.
3DNS
3DNS, like well-known companies such as GoDaddy and Namecheap, is in the domain registration business. People can obtain the URLs they want through domain registrars. URLs registered through 3DNS can be used not only for browsing websites (web2) but also for sending and receiving cryptocurrency (web3). According to 3DNS:
3DNS is the world's first on-chain domain registrar that is compatible with both web2 and web3. This means you can not only bind your domain to Email and websites, but also use it to send and receive cryptocurrency. 3DNS currently supports the most popular top-level domains, such as .com, .xyz, .co, .io, and .box. Domains registered or held through 3DNS are also NFTs in your wallet. This means your domain is protected by the private key of your wallet and can be self-custodied.
The following image shows the 3DNS website interface. When I enter "blocktrend," various URLs with different endings and prices are offered. For example, blocktrend.wtf costs 5.7 USDC for the first year, while blocktrend.org costs 8.89 USDC for the first year.
The pricing unit is USDC, indicating that 3DNS targets users familiar with web3. Users must have a wallet; otherwise, they will be stuck. The "Connect Wallet" button in the upper right corner serves the same function as "Login/Register." The difference is that traditional users register separate web2 accounts that do not communicate with each other, like PChome and momo shopping. However, 3DNS uses a web3 account system that is universal across websites – the wallet address.
This is an upgrade in itself! For those without a wallet, encountering such an "unfriendly" website in the past would likely result in them leaving immediately. Only a few who are willing to spend time researching wallet creation and mnemonic phrase backup might come back later, but anyone who has experienced it knows the likelihood is low.
The good news is that the 3DNS website supports the Coinbase Smart Wallet introduced in Blocktrend's video yesterday, allowing those without a wallet to obtain a web3 account within a minute.
I highly recommend everyone to try creating a Coinbase Smart Wallet2 through the 3DNS website to experience the "registration" process for a web3 account. The Coinbase Smart Wallet does not use troublesome private keys but instead manages them with Passkeys stored in a password manager. Once the Passkey is placed in the password manager, it is not as easily lost as a mnemonic phrase. This is one of the most substantial technological advancements in the blockchain field recently, significantly lowering the entry barrier and reducing the possibility of private keys being hacked.
Although this might seem lengthy, the process is not as intimidating as it sounds. Once you have a wallet, 3DNS can transfer the domains you purchase into your wallet as NFTs, allowing for personal management. This unprecedented innovation also makes domains less susceptible to hacking.
The Benefits of Tokenization
Domain management is highly centralized and is often a target for hackers.
When people buy Bitcoin through Binance, they can eventually withdraw it to their personal wallets. However, domains registered through GoDaddy can only be transferred between different domain registrars. Both exchanges and domain registrars are targets for hackers. Previously, hackers redirected people to phishing websites to steal credit card information; now, they are after cryptocurrencies.
3DNS tackles this issue at its root by handing domain management back to the users. Once a domain is minted as an NFT, the system only recognizes the token, not the person. Without the NFT, hackers cannot alter the corresponding domain information.
Is it safer for users to manage their domains? Opinions will certainly differ. Those confident in their management skills will fully support this, while those prone to losing things might find it riskier. However, global cybersecurity trends have shown that having companies manage account passwords is not secure; personal management of Passkeys is more reliable. In essence, 3DNS is applying a variant of the crypto adage, "Not Your Key, Not Your Domains."
But in the absence of a hacking incident, people often do not take precautions. Therefore, 3DNS must rely on other advantages to attract users. The second key feature of 3DNS is integrating web2 domains into web3, essentially a form of asset tokenization, a concept that has recently garnered significant interest from enterprises and governments.
Integrating Domains into Web3
Domains are also a type of Real World Asset3 (RWA). Take USDT, the largest stablecoin by market cap, as an example. Tether, the issuer, tokenizes USD deposits (real world assets), allowing people to transfer dollars via blockchain, which is more efficient and cost-effective than using SWIFT for international wire transfers.
Initially, people were skeptical about USDT: Can it really be converted into USD? Now, every exchange has USDT trading pairs, and almost all on-chain applications support USDT. No one questions its value anymore. With this on-chain dollar as the foundation, blockchain financial applications have flourished in recent years.
I believe that 3DNS tokenizing domains is similar to Tether issuing USDT; both are creating a new type of asset on the blockchain. At first, people might be wary: Does this NFT really equate to domain ownership? Once people no longer worry about whether an NFT domain can be used, and confidence is built, the benefits of domain tokenization will become apparent.
The most immediate benefit is domain trading. As of 2024, the domain trading market is still quite primitive. If the desired domain is already registered by someone else, you can only contact the owner through a broker to inquire about purchasing. The commission is typically around 10% to 25% of the transaction amount.
With domain tokenization, the trading market will become more transparent and direct. People can directly place bids on OpenSea. This will not only revolutionize the entire domain trading process but also bring new business opportunities.
If you want to try it out, 3DNS is currently hosting a limited-time event with Optimism, allowing people to experience it for $5. For example, I have already registered mnhsu.super.box, which is a universal domain managed by an NFT for both web2 and web3. It can serve as my website address and also be linked to a wallet address.
In addition, this is also a bit of a speculation. 3DNS has promised to participate in the domain auction for .super next year. If successful, my domain will be upgraded to mnhsu.super. The shorter the domain, the more valuable it is. It’s like buying a small lottery ticket for $5 now, which might be sold at a higher price next year. Usually, people spend money for experiences, but this could be a rare opportunity to both make money and gain an experience.
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