Web 3 disruption and the domain name system: understanding the trends of blockchain domain names and the policy implications

ABSTRACT

Blockchain or Web3 technology has the potential to disrupt the everyday use of the internet. The polarized discussion around blockchain technology makes it notoriously difficult to navigate between the opposing narratives of blockchain evangelists and skeptics. This article provides a data–led approach to blockchain domain names, a rapidly growing trend that is currently non–interoperable with the Domain Name System. Alternative DNS roots have previously not become popular due to the lack of supporting browsers. Blockchain domain names could offer an exciting prospect of a decentralized and novel way to manage online naming and addressing according to one view, others regard them as insignificant and undeserving of attention. This study explores their burgeoning growth, assesses the challenges of blockchain domain names and provides five recommendations to address them. A pragmatic response should be adopted to blockchain domain name as, even if it is not clear that blockchain domain names solve any problems not currently solved by the DNS, the registrations continue to rise. Furthermore, the technologies will continue to advance, and due to the decentralized nature of the blockchain, developments or changes can be more rapidly implemented than within the DNS.

KEYWORDS:

• Blockchain
• policy
• DNS
• decentralisation
• Web 3

Introduction

Since the early pioneers of the internet, disruption and progress have been inevitable. Blockchain technologies, which add a decentralised nature to the internet, will underpin what some researchers are calling ‘Web3’ (McFarland 2021). Blockchain-based domain names are an example of a Web3 trend that moves away from centralised name spaces and traditional governance. The Domain Name System (DNS) can be described as comparable to a phone book of the internet. Its purpose is to direct a user to the intended website and resolve the input of an address to an output on the internet. The central governing body responsible for the naming and addressing of the Domain Name System is known as the Internet Corporation for Assigned Names and Numbers (ICANN). ICANN enables the coordination of the DNS so that the unique identifier typed into a browser can find the web address associated with it (Haggart, Tusikov, and Scholte 2021). This is not the case for the Web3 alternative, which does not have a centralised body coordinating the naming and addressing. Blockchain domain names are a newer alternative root or alt-root to the DNS. ICANN has historically avoided some of the difficulties that can arise with alt-roots as they are often not compatible with the DNS. This article will assess the challenges of blockchain domain names and argue that, although they are beyond the scope of ICANN’s traditional governance, they should no longer be ignored. It is important to take a pragmatic approach to blockchain domain names. We will then provide five recommendations that will help to address these challenges:

1. Increased alliances and policy forums;

2. Unity between the different blockchain domain name providers;

3. ICANN involvement;

4. Upskilling and diversification of stakeholders; and

5. Further research and monitoring of trends.

There has been a large increase in the number of registrations of blockchain domain names. According to ICANN, looking at the top two blockchain domain providers (Ethereum Name Service and Unstoppable Domains), the number of registered blockchain domain names was just over 1 million in March 2022 (Durand 2022), which has increased to over 6 million in March 2023.¹ Blockchain technology is currently being used to track records effectively in areas such as IoT component tracking and compliance, where data is stored in blockchain ledgers to allow all parties access to the provenance and records. It is also being used in areas such as insurance, peer-to-peer payments and within supply chain management (Insider Intelligence 2023). Proponents of blockchain technology assert that it promotes trust and transparency by removing the need for intermediaries in a peer-to-peer system (McFarland 2021).

Blockchain domain names are an alt-root that uses blockchain technology, which has unique challenges. This decentralised alt-root lacks the governance and coordination that we see in the DNS and this increases the risk of name collisions, as there can be multiple blockchains with duplicate top-level domains (TLDs)² without a central authority to monitor or regulate domain names. There is no appropriate legal mechanism for blockchain domain names that infringe on brands or trademarks. Blockchain domain names can be owned without an easy way of disputing ownership rights. Blockchain domain names are also considered to be a non-fungible token (NFT). An NFT is a token or digital asset which contains a digital signature. NFTs became a popular feature of blockchain-based trading and selling of digital assets in 2021, particularly within digital art. Proponents claim they provide a certificate of ownership (Insider Intelligence 2023), yet NFTs are not subject to consistent regulation and are out of scope of the Financial Action Task Force which makes them risky to trade, buy and sell. The blockchain domain name itself is the NFT in this context, which adds another layer of complexity around regulation and puts them in a grey area. The issue of ownership is also complicated by the difficulties of name collisions which have not yet been addressed. There are clear risks to our naming and addressing system if more blockchain domain names are registered, or more use cases are identified, as there are currently no clear policies in place, nor regulations to negate these issues.

Although there is substantial literature on blockchain technology, there is very limited literature written on blockchain domain names and there is a need for more research. This is reflected in the lack of attention given to this alt-root from many governance bodies. One of the main discussion points around scrutinising the potential growth of blockchain technology is that the blockchain ‘revolution’ is more of a blockchain ‘bubble’, which will not penetrate the mainstream of internet users (Mehta, Agashe, and Detroja 2021). Considered disruptive by some researchers (Lovett 2020), blockchain technology is seen by others as a ‘new way forward’ and it is claimed that this could circumvent the limitations of having powerful intermediaries, characteristic of Web2, and provide exciting opportunities (Tapscott and Tapscott 2018). The decentralised nature of blockchain technology could enable easy and transparent interaction with confidence (Felin and Lakhani 2018). Literature around the adoption of blockchain technologies is still in its infancy, and further evidence gathering around the adoption of blockchain or Web3 alternatives is recommended (Stratopoulos, Wang, and Ye 2022).

Alternative roots have been in existence for as long as the internet has, and were originally ideologically motivated, or motivated for their profitability (ICANN SSAC 2006). Typically, alt-roots fall out of scope for ICANN, which runs the Domain Name Root System (Haggart, Tusikov, and Scholte 2021). Mueller (2002), who has written extensively on alt-root systems, outlines some of the problems with the DNS and the competition of alt-roots. According to Mueller (2004), the DNS could be a ‘a single point of failure’ as well as a ‘single point for the surveillance of users and the control of cyberspace’. Researcher Daniel Paré (2003), takes a theoretical approach and describes the ‘DNS wars’ in which the most powerful interests within ICANN triumph, creating a chasm of trust.

The adoption of alt-roots has so far remained marginal due to deployment challenges and interoperability of internet architecture, browsers and web settings (Durand 2022). Currently, to use blockchain domain names, a user would need to have a blockchain-enabled web browser or an extension to their usual browser. At the time of writing this paper, dominant browsers, such as Google Chrome and Safari, are not blockchain-enabled. However, with an extension or add-on such as MetaMask, browsers including Google Chrome and Firefox can access blockchain-based content. The browsers that support blockchain-enabled apps include Opera, Brave and Osiris. Other blockchain domain name providers also create their own browser environment to use the domain name on. It is widely believed that if more dominant browsers were to enable access of blockchain-based apps and content, the biggest obstacle to mainstream adoption (lack of interoperability) would be removed (Bose 2023).

The main use case of blockchain domain names is for connecting a cryptocurrency wallet to an easy, human-readable blockchain address for cryptocurrency transactions instead of using the crypto wallet address, which is a long, complicated string of characters. Other use cases of a blockchain domain name include creating an uncensorable website that cannot easily be taken down, as content on the InterPlanetary File System using blockchain cannot be changed without the owner (IONOS 2022). They are also used for buying and trading domain names in a speculative trade known as ‘cybersquatting’.³ However, these use cases have been challenged as being ineffective (Craig 2021; Trachtenberg 2022). The main issues surrounding blockchain domain name adoption concern the usability. You must have a cryptocurrency wallet to be able to purchase one, and you must use a blockchain-enabled browser or have an extension, which can be complicated for the average user. Enthusiasts, however, describe them as an opportunity for digital identity (Barrett 2023), and others claim that when Web3 is more developed, it is likely to have many more purposes (Kam 2022). This article will assess the challenges of blockchain domain names and argue for internet communities to take a pragmatic approach with five recommendations.

Methodology

This study uses a mixed methodology that includes quantitative analysis, primary data collection based on our own findings, and qualitative data from discussions with subject matter experts. This section will explain the data collected, and the rationale behind it, to assess the effectiveness of blockchain domain names.

Trends in blockchain domain names

To assess the uptake in blockchain domain name registrations, data was collected and analysed for trends. As the two largest blockchain domain name providers, Ethereum Name Service (ENS) and Unstoppable Domains (UNS) were analysed in terms of the number of registrations and information on the uses of the blockchain domain name. Future studies are recommended to incorporate other blockchain domain name providers such as Handshake. The analysis of registrations was done using the DNS Analytics Platform, DAP.LIVE. This was developed by the DNS Research Federation to gather information on the DNS and other unique identifiers relating to the internet. The DAP.LIVE platform enables the use of data visualisation to show statistics and trends over time as well as perform data analysis (Figure 1).

Figure 1. DAP.LIVE blockchain domain name data dashboard 3 May 2023.

The blockchain domain name data on DAP.LIVE was gathered via API connections to ENS and UNS. Data was collected from these providers at multiple points throughout the day to ensure that the registration data captured was up to date. There are almost 6.5 million blockchain domain names between ENS, UNS and Zilliqa Name Service (ZNS), which is powered by Unstoppable.

The data shown in Figure 2 includes the chosen domain name registered and the TLD chosen as well as the date that it was registered. It also shows the total registrations by TLD, with.eth being the most popular. The table on the far right shows the blockchains that have been used to create the domain name. Blockchain domain names need to be ‘minted’ on the blockchain which is the term used to describe publishing an NFT. The ‘ETH’ blockchain requires a fee to mint NFTs known as ‘gas fees’. However, this is not the case for the ‘MATIC’ blockchain used by Unstoppable, also known as the Polygon blockchain. This is because it is less congested and has greater scaling than the Ethereum blockchain.

Figure 2. DAP.LIVE drill down of data 3 May 2023.

Of note, the table on the far left of Figure 2 contains the expiry date, which only ENS has, as blockchain names registered on ENS will need to be renewed every year for them to continue to be owned and to resolve. ENS transitioned to instant registrations with an annual fee model in 2019 (brantly.eth 2019). Names can expire and once the 90-day grace period is up, they are available for someone else to register (brantly.eth 2020).

Looking closely at the information retrieved from these blockchain domains and the type, we can surmise how the blockchain domains are being used. For example, the data below shows the number of UNS blockchain domain names that have been put up for sale, as acquired from the Unstoppable platform. The data can also tell us what the record type is, enabling us to deduce whether the record type is for a connection to a crypto wallet for Unstoppable. This data can help to gauge how active the wallet address is (Figure 3).

Figure 3. Blockchain domain data from UNS and wallet addresses.

Caveats

Although we have collected a substantial amount of useful data – because the two top providers of blockchain domain names have different frameworks – there are many other blockchain domain name providers with different information available. In comparison to the information available for domain name registrations on the DNS, the information for blockchain domain names is incomplete, almost anonymous, and hard to identify. This is because the details, when registrations are filled in, are not obligatory.

Blockchain domain names that have been connected to a wallet are identified in the data. We also have some details about these wallet IDs. For example, we were able to gather outgoing transaction counts for wallet addresses on the Ethereum network. While we know how frequently a wallet had been used, it is not possible from this data point to determine whether the domain name attached to the wallet was used to initiate the transaction and it is possible that the wallet ID was used directly instead.

Collecting primary data: testing use cases

To address the effectiveness of blockchain domain names and the governance model (or lack of governance), we collected our own primary data by registering our own blockchain domain names and testing the identified use cases. In the previous section, we outlined the use cases for blockchain domain names for: (a) connecting to a cryptocurrency wallet; (b) creating an uncensorable website using IPFS; and (c) speculating on popular domain names by registering, buying, and selling or trading them.

Using Coinbase as our wallet, we bought and registered the blockchain domains on UNS: oxilresearch.crypto and oxilresearch.blockchain. On ENS, we bought and registered oxilresearch.eth. We then tested the usability of connecting to a cryptocurrency wallet and cryptocurrency transactions, using the blockchain domain name. We also tested the use of the blockchain domain name in creating an uncensorable website and attempted to add content to it.

The browsers used to test the blockchain website using the blockchain domain name were Brave and Opera. As the purpose of this study was not to test the interoperability of different browsers, other tests should be performed to assess how many browsers are blockchain-enabled. Testing took place in March 2023, and with the rapidly developing nature of blockchain and internet technology, it is highly likely that elements of this testing will be out of date even by publication. Updates to the technology or policies could change the way registration or use cases could be implemented. There could even be more use cases available to users upon publication.

Discussions with subject matter experts

Finally, after discussions with five subject matter experts, we have a qualitative overview of some of the issues regarding blockchain domain names. These included intellectual property lawyers, cryptography experts, cryptocurrency investigators and ICANN members. Efforts were made to select interviewees from diverse approaches to the blockchain and to alt-roots. This included selecting from industries that cover the legal, political, technical and societal aspects of blockchain domain names. Future studies will look to provide a more inclusive spectrum of expertise to enable a broader understanding. We found that there was a lack of diversity in this field, and, of the experts on blockchain domain names, we were only able to speak to male experts. This could reflect a lack of diversity within Web3 applications and features which should be investigated in future studies, particular with regards to policy implications. The full list of interviews can be seen in Table 1.

Table 1. Interviewees.

Name	Organisation and Role
Tomas Barrett	President of EnCirca Inc
Bruce Schneier	Security Technologist
Paul Hoffman	Distinguished Technologist at ICANN
Marc Trachtenberg	Intellectual Property Lawyer
Eireann Leverett	CEO of Concity Risks

Key findings

Although information from registrations of blockchain domain names is limited, because of the blockchain’s trackable nature, there are other inferences we can draw from the data. There are many comparisons to be made with regards to how UNS domain names can be registered, as opposed to ENS names. The use cases from each provider are implemented differently due to policy, governance and technical differences between the blockchain or providers. In addition, ENS domain names have a rental fee that renews annually or expires, and for each step from registration to implementation of a use case, there are so-called ‘gas fees’ to pay.⁴ This is unique to the Ethereum blockchain and relates the computational power needed to change elements on the blockchain. Upon collecting our own data and registering blockchain domain names in each provider, we found that UNS was easier to navigate and gave more options than ENS. However, due to the high level of decentralisation and greater number of TLD extensions available, there could be more scope for name collisions and brand infringement on UNS. Although some brand names are protected in Unstoppable, these are only for exact matches and there is currently no efficient legal redress system.

Trends in the data show significant increase in registrations

The number of blockchain domain names registered was just over 1 million in March 2022 (Durand 2022), which increased to over 6 million in March 2023.⁵ The data collected from ENS and UNS show significant growth. UNS shows more registrations at 3,233,810, compared to ENS registrations at 2,963,089 at the end of April 2023.⁶ Although details to identify the owners of blockchain domain names are limited as they are voluntary, in cases where blockchain domain names are put up for sale, there are details that have been included presumably so that the owner can be contacted for purchase of their blockchain domain name.

When looking at how the blockchain domain name has been connected to a specific use case, we can look at the record type in the DAP.LIVE platform (Figure 4).

Figure 4. Most popular record type for blockchain domain names.

The record type for a wallet connection, ‘crypto.ETH.address’ is the most popular record type, followed by the other wallet addresses based in the Polygon blockchain. This shows that the use case most prominently intended for the blockchain domain name is for it to be connected to a cryptocurrency wallet. The second most prominent use case is to trade or sell the blockchain domain name with the ‘whois.for_sale.value’ record type. The record type for the use case of creating a blockchain-based uncensorable website using the InterPlanetary File System (IPFS) is seventh in the most popular record types. Although this is not as prominent as the other record types, some agree that with further development of this technology, this will be a prominent use case (Kam 2022).

There was a total of 1,548,920⁷ unique registrants for blockchain domain names across all providers out of 6,450,309⁸ registered blockchain domain names at the end of April 2023.⁹ This shows that there are multiple blockchain domain names being registered from a specific user or registrant ID. Exploring the reasons behind the multiple blockchain domain name registrations, it was discovered that registrants are registering multiple domain names with popular trademarks and brands (Deacon 2023). It was also discovered that many of the blockchain domain names were also being registered with special characters or spaces that made them look like the legitimate domain name and could be considered a potential domain name for phishing activities. When looking at the number of blockchain domain names for sale, only about 5.13% of the total on UNS have been marked for sale on the public WHOIS of Unstoppable Domains.¹⁰

While ENS and UNS are both blockchain domain providers that offer the same service, they do so very differently. Reviews of the two services described UNS as being easier to use, free and as having more choices available for TLDs (CoinGecko 2022). This section will outline the difference between the two main providers of blockchain domain names through registration, fee structure, governance structure, usability and use cases.

Registrations

UNS had a total 3,236,151 by the end of April 2023¹¹ and Zilliqa Name Service, which is owned by Unstoppable, had 252,342 registered names. ENS had 2,964,068 blockchain domain names registered under.eth. Ethereum offers only the.eth TLD extension while Unstoppable offers many extensions including.crypto,.nft,.x,.wallet,.polygon,.dao, .888,.zil,.blockchain and.bitcoin (Figure 5).

Figure 5. Minting the Unstoppable domain name on the Polygon network.

Parking

Upon registration, UNS gives the registrar an option of claiming the blockchain domain name into their own wallet to become the sole custodian or paying Unstoppable an annual fee to hold the blockchain domain name in its wallet. This is called ‘parking’ the domains and has previously been used for those who are speculating about the worth of the domain name, to hold it for future use, or to prevent it from being claimed. Unstoppable even offers the option of ‘bulk parking’ in which an unlimited number of domains can be parked in the Unstoppable custodial vault (Unstoppable Domains 2023). ENS does not offer this service and has incentives to prevent parking that include paying annual fees for the blockchain domain name to continue to be rooted and owned by the registrar.

Fees

The main difference at the registration stage is the fee structure of ENS compared to UNS, which is free. ENS has a registration fee and a yearly rent fee. It also includes gas fees at each point of a transaction or change in the use of your blockchain domain name.

In the data, we can see that the ENS blockchain domain name has an expiry date, which is a key difference, as a fee is needed to keep the blockchain domain name rooted. In a blog post by the director of operations at ENS, the rationale behind rental fees was explained as being to prevent a small group of people from being able to register all the names they may want with little purpose, effectively ‘parking’ them. The fees were included to ensure the names were used and to prevent ‘cybersquatting’ (brantly.eth 2019). The post goes on to say that ‘for ENS to be useful, there has to be a limiting principle on how many names a person can own for speculative purposes.’

Governance

Blockchain-based technology, or public blockchains, are permissionless in that anyone may be their own bookkeeper or create their own blocks without a central authorising body (Lewis 2018). In the blockchain domain name context, there is a form of ‘rules’ created from the blockchain domain name providers or in the smart contract. The decision-making of blockchain projects usually happens through the community of participants, or members. This is because blockchain can enable transactions or exchange of data without intermediaries in a transparent and ‘trustless’ way, without trusting a third party.

Both blockchain domain providers are decentralised in different ways, but also have different methods of running their policies and making decisions. ENS enables its members to vote on new policies. These members have governance tokens called Airdrop, as part of the ENS Decentralised Autonomous Organisation (DOA) and can participate in deciding when a new policy or decision is made across ENS (ENS 2022). An example of this voting system can be seen in Figure 6. The ENS community owns, modifies and enforces all ENS policies and conducts all business relating to ENS proposals. To join the ENS community and participate in the ENS governance, a participant request form must be filled out; this has very basic questions such as your username on ENS, email address, X handle (formerly known as Twitter), other communities you are a part of and any suggestions you may want to share. There are four different workstreams which have subcategories for each process of governance including: Community, ENS Ecosystem, Meta-Governance and Public Goods. The ENS constitution contains five policies by which all members who have signed up to the DAO are bound (ENS 2021). The policies in the constitution which have been signed by 84,350 accounts stipulate the following:

1. Name Ownership shall not be infringed;

2. Fees are primarily an incentive mechanism;

3. Income funds ENS and other public goods;

4. ENS Integrates with the global namespace; and

5. Amendments to this constitution by majority vote.

Figure 6. Screenshot of votes from the ENS governance members on their Snapshot Portal (ENS 2023).

We can see that the governance structure for ENS is decentralised in that anyone can join, and the members vote on changes, but that it is organised and has different categories and tracks. The director of operations at ENS asserted in a blog post that he ‘considers ENS to be a public good for the whole ecosystem’ (brantly.eth 2019). UNS does not currently have a codified constitution but both providers have a discord channel¹² in which certain rules must be agreed upon to join, such as being civil towards each other and not impersonating another member (Figure 7).

Figure 7. Governance proposals on ENS (ENS 2022).

This is distinctly different from how the DNS is run and governed by ICANN, which has a board of directors as a centralised body to ‘exercise [its] business judgement to act in what they believe to be the best interests of ICANN and for the benefit of the Internet community as a whole’ (ICANN.org 2022). ICANN, which was founded in 1998, was tasked originally with taking over the administrative duties of running the internet from the US government. It has received a number of criticisms for being too US-centric as well as being slow and bureaucratic (Paré 2003; Mueller 2002). Blockchain domain names, on the other hand, would be able to change quickly and adapt as the technology and use cases evolve, with subject matter experts drawing parallels with some of the concerns seen with blockchain domain names during the early days of ICANN, such as lack of interoperability, mainstream adoption and brand protection (Barrett 2023).

Regarding policy around brand protection, UNS has ‘protected’ some of the top brands or organisations from being registered (Unstoppable Domains 2022a). As part of their ‘Protected Brands Policy’, trademark holders were able to register their domain names corresponding to their trademarks before names were generally publicly available (Unstoppable Domains 2022b). This was only available for the.blockchain extension, and Unstoppable only protected the top 100,000 websites. If a brand or organisation was not on that list, then others could register them with no restriction.

Usability: results from testing use cases

After testing the use cases, we found UNS to be easier and more user-friendly to connect to a wallet and create an uncensorable website. The use-case testing is outlined in detail below using the domain names: ‘oxilreseach.crypto’, ‘oxilresearch.blockchain’ and ‘oxilresearch.eth’.

Connecting to a cryptocurrency wallet

Unstoppable supports more than 275 different coins and tokens from multiple blockchains. Ethereum supports more than 10 cryptocurrencies (CoinGecko 2022). This means that you can connect your blockchain domain name with your wallet addresses supporting many more different currencies with an Unstoppable domain name.

Testing this use case for UNS was straightforward and, after the blockchain domain name ‘oxilreseach.crypto’ was registered, we connected it to a Coinbase wallet to make Ethereum transactions. This was efficient, easy and quick to perform. The same process was carried out for ‘oxilreasearch.eth’ using ENS, which seemed to be more complicated to connect from our own testing. It was discovered during the testing phase that the.blockchain extension in Unstoppable did not have the same level of support with exchanges and browsers and instead, the.crypto extension is the extension that supports this use case (Figure 8).

Figure 8. Connecting Unstoppable domain name to a cryptocurrency wallet.

Creating an uncensorable website

A blockchain domain name can be used to create an uncensorable website. The website cannot be easily seized or taken down, creating what some call a breakthrough for free speech (Gould 2020). This use case was tested within both providers using the Brave and Opera browsers. A website using the IPFS cannot currently be complex or multipage, but it is expected that this will advance and develop over the years (Kam 2022). Finding a browser that accepted content from the InterPlanetary File System (IPFS) for blockchain domain names was challenging but was eventually successful for all blockchain domain names we registered. We found that creating a website was more challenging for the average user as you cannot easily use a website creator (Figure 9).

Figure 9. The Oxford Information Labs team create content on the blockchain IPFS using Unstoppable blockchain domain name.

‘Cybersquatting’ – buying and selling

In the previous section, we outlined the option offered in UNS to ‘park’ domain names. With UNS, a registrar is the sole owner of the domain and Unstoppable does not have the power to take ownership from you. This is not the case for ENS, in which you are expected to pay a fee to keep ownership.

The Unstoppable domains can be sold within the Unstoppable Domains website which offer to list the domain for sale. They can also be sold on an online marketplace called OpenSea which is where users can sell or buy NFTs including the blockchain domain name. Some users have even claimed they are able to make over $10,000 by registering a blockchain domain name and selling it (RuthandEric 2022). The ENS blockchain domain name can also be sold on OpenSea market. We did not test the buying and selling of domains in this study and instead relied on the reviews and accounts of others.

Blockchain and DNS integration

Blockchain domain names can also be linked to a DNS website and ENS has enabled support for DNS integration which is based on a protocol called Domain Name System Security Extensions (DNSSEC). Most TLDs are now enabled to become available for use in ENS. This means that anyone who owns a domain on one of the TLDs can claim and use it inside ENS (Johnson 2019).

Analysis of blockchain domain names and recommendations

‘In the history of the Internet there seems to be a recurring hope that open-source, decentralised, and distributed digital technologies would give rise to novel, revolutionary modes of social, political, and economic organisation.’ (Bodo and Giannopoulou 2020)

With blockchain domain names, this ideal is not as easy to implement in practice and can also give rise to other challenges. ICANN raised the issue regarding duplicate domain names in a report on the challenges with the alternative name systems in 2022 (Durand 2022). The brand infringement that is evident on blockchain domain names, (Deacon 2023) has no easy redress system or legal process to deal with the issue. Despite the challenges, the registrations of blockchain domain names are on the rise and changes to the implementation or governance can happen very rapidly, increasing the potential use cases. This section will analyse some of the risks and opportunities of blockchain domain names, the obstacles to mainstream adoption, and will provide five recommendations.

Risks and opportunities for blockchain domain names

Blockchain domain names have some unique and novel benefits. They have no custodian, and the domain name is stored by the owner so a third party cannot easily move or seize them. They can be used as payment gateways for cryptocurrency transactions with multiple different currencies. This can make cryptocurrency transactions easier to manage. They can also be used to create censorship-resistant websites and content where it is difficult to take the website down. Finally, they can be a unique feature of your Web3 identity, which you can even personalise with emojis or different linguistic scripts in a way that you cannot within the regular DNS. This means you can have all payments, or perhaps content, for a Web3 identity in one place. Through our own analysis of data, we have assessed that there could be opportunities for increased Universal Acceptance¹³ as you can register blockchain domain names with diverse linguistic scripts and emojis. In the DNS, linguistic diversity on the internet is limited due to the standardised western ASCII¹⁴ code used for websites and email addresses. With blockchain domain names, you can include emojis in your domain name or different linguistic scripts which could increase individual expression (Ash 2022).

There is evidence that big brands and companies are purchasing and registering blockchain domain names such as the fashion brands, Gucci and Puma (The Rubicon Show 2022). This is encouraged as part of their Web3 digital identity. Many of the opportunities within blockchain domain names reflect the speculative nature of the blockchain. If cryptocurrency or the IPFS has more adoption, we can see more potential opportunities within the use of connecting a blockchain domain name to a cryptocurrency wallet or website. The purpose of this study is not to assess the adoption or use of cryptocurrency or IPFS websites, but we will provide an overview of the opportunities for these use cases being connected to a blockchain domain name.

The primary use case of blockchain domain names identified by this study is attaching a cryptocurrency wallet to an easy, human-readable blockchain domain name. This provides a unique opportunity in terms of cryptocurrency transactions. Cryptocurrency fundraising played a substantial role for Ukraine during the war with Russia, and over $212 million worth of crypto has been donated to pro-Ukraine war efforts (World Economic Forum 2023). The Ukrainian government posted multiple cryptocurrency addresses on X (formally known as Twitter) in order to elicit donations for the war effort a few days after the war began (Government of Ukraine 2022).

Cryptocurrency has been involved in the fundraising of criminal and terrorist activity and will likely continue in trends identified by blockchain intelligence company, TRM Labs (TRM Labs 2023). The Ukrainian government, which posted its cryptocurrency addresses online, was the first government to fundraise publicly for a war using cryptocurrency. As cryptocurrency can circumvent foreign exchange difficulties, issues with global payments, and in some cases, even avoid country sanctions and taxes, international cryptocurrency fundraising could avoid some of the challenges with funding international relief efforts (Tradestation 2023). The Ukrainian government posted several different cryptocurrency addresses, two of which you can see in Figure 10 above. With UNS supporting over 275 cryptocurrencies, one could imagine a post on X with the address: ‘Ukraine.crypto’¹⁵ without the need of several different addresses. There is also the same possibility for criminal activity. If blockchain domain names increase in mainstream adoption, providers will have to reckon with these potential uses. There have been many suggestions of the blockchain being used to send aid or fundraise for international relief and crises. The transparent nature of transactions would mean that you could track all donations to a specific cause (Sojan et al. 2021). This represents an opportunity for blockchain domain names. However, it is highly dependent on the mainstream adoption of cryptocurrency, which is currently in decline (Weaver 2022).

Figure 10. Ukraine government post cryptocurrency addresses on X (formally Twitter).

At the launch of the Unstoppable blockchain browser in 2021, CEO of Unstoppable, Matthew Gould, said, ‘we believe that a decentralised web is critical for protecting free speech around the world’ (Gould 2020). Blockchain can enable websites to be created on the IPFS in what is called the ‘permanent web’. Using blockchain domain names to create a censorship-resistant website would promote freedom of speech without the concerns that the content or website could be seized or taken down (Article 19 2019). This is a unique opportunity for those espousing the importance of free speech and transparency online. The IPFS has been used to combat censorship in cases such as in Turkey. The IPFS was used to support the people of Turkey in keeping copies of Wikipedia pages, which were censored in 2018 after the Turkish government issued a court order that permanently restricted access (The IPFS Team 2017). Efforts to keep censored content on the IPFS, particularly with content that can be edited and altered, are important as any changes made using blockchain technology are usually transparent.

However, it could also run the risk of becoming another dark web in which sinister or criminal activity can fester and law enforcement or public safety authorities can do little about it (Grigg 2022). Blockchain domain names have already been identified as being involved in criminal activity since 2016 (Trinidad and Tobago Cyber Security Incident Response Team 2018). Not only are there issues around potential phishing activities of blockchain domain websites, as identified from data from the DAP.LIVE Platform (Deacon 2023), but there are also issues around content that is hosted on these censorship-resistant websites. The Unstoppable Domains co-founder, Brad Kam said in an interview with CoinDesk, ‘We expect over time all sorts of content that is currently controversial or maybe even not permissible in certain parts of the world popping up because the censorship-resistant Internet [is] usable now’ (Foxley 2020). This could even be the case for content relating to child sexual exploitation (RuthandEric 2022). Blockchain domain names as NFTs do have the potential to hold abusive materials. Content in an NFT has already been used by a sympathiser of the terrorist group ISIS as an attempt ‘to circumvent censorship with NFTs’, as seen in Figure 11 (JihadoScope 2022).

Figure 11. ISIS sympathiser creating an NFT on the blockchain as part of propaganda efforts in resisting censorship.

At the time of publishing, blockchain domain name abuse has not been thoroughly investigated, but blockchain abuse can be reported to abuse reporting websites such as chainabuse.com. More evidence is needed to assess the use of blockchain domain names and abusive content or abusive domains.

Obstacles to mainstream adoption

Interoperability and accessibility are critical in the adoption of alternative roots and the first issue we encounter with blockchain domain names is the lack of accessibility in browsers. Only specific browsers are blockchain-enabled, such as Brave and Opera, or browsers with extensions and add-ons. More browsers are expected to enable blockchain access which could increase the accessibility of blockchain domain name content (Foxley 2020). Currently, the limited accessibility with browsers enabling blockchain is the biggest obstacle to mainstream adoption.

To acquire a blockchain domain name, a cryptocurrency wallet is required. As cryptocurrency itself is often unstable, this means that to have a blockchain domain name, there needs to be enough trust in the cryptocurrency wallet to have one in the first place. During our testing process, it was found that using a blockchain domain name for cryptocurrency transactions was quick and efficient – but only with a wallet that was interoperable with the blockchain domain name.

Blockchain domain names also increase the potential of multiple name collisions and risk fracturing the internet (Durand 2022). We may end up with an infinite number of competing identical TLDs in an infinite number of blockchains. A name collision happens when there are duplicate names in different name spaces and can be accidental or malicious. As there are multiple blockchains, name collisions have already been identified with the.wallet TLD extension. Unstoppable Domains has sued the registrant of.wallet and the provider of Handshake on the basis that ‘defendants are attempting to sell identical.wallet domain names that have caused and will continue to cause consumer confusion, misdirected payments and internet traffic’ (Unstoppable Domain Inc. v Wallet Inc and Scott Florcsk – Delaware 2022). While looking to alternative namespaces when a specific name is not available could be an opportunity, it also causes problems for the consumer as well as the blockchain provider. There will likely be competition for the same extensions in different blockchains and further applications could follow for.crypto or.bitcoin extensions (Trachtenberg and Allemann 2022). There is currently no easy way to solve a dispute around a name collision and we are yet to hear the results of the Unstoppable lawsuit. Without a clear way to deal with these name collisions, blockchain domain names face a huge obstacle to mainstream adoption.

As blockchain domain names are decentralised and ungoverned by ICANN, brand infringement is common, as we have seen from our data (Deacon 2023). There is no Uniform Domain Name-Resolution Policy (UDRP) and no method for resolving a dispute regarding the purchase or sale of blockchain domain names (Trachtenberg and Allemann 2022). Brand infringement could thrive in blockchain domain names, which has prompted some blockchain domain name providers to have policies around it, such as the ENS policy in their constitution: ‘Name Ownership shall not be infringed’ (ENS 2021). Unstoppable Domains’ ‘Protected List’ of brands only protects the top 100,000 websites and does not extend outside of that list. Without blockchain domain name providers tackling this issue of brand protection, it will likely prevent mainstream adoption. The law is expected to evolve around brand infringement, just as it is evolving with any NFT (Agateev et al. 2022). Yet in terms of enforcement, there are still many issues regarding the identity of the owner of the blockchain domain name, the country the owner is in and how they can be served a legal notice.

Recommendations

The future of blockchain domain names reflects the future of the Web3 era of the internet: speculative and disruptive. If we believe in Web3, then blockchain domain names might have a brighter future. If cryptocurrency is increasingly adopted by the mainstream, it will also likely increase the role and use cases of blockchain domain names. The speculation of blockchain domain names is part of the blockchain paradox. While many may argue that anything blockchain domain names can do, the DNS can do better, the decentralised nature of blockchain domain names means that any technical change to the architecture, or change in policy, can be adopted and implemented more quickly. The technology is expected to develop over the next few years, and it has been suggested that, in the future, systems similar to ENS or Unstoppable could be a viable alternative to the DNS (Agateev et al. 2022).

Even if there is no evidence of mainstream adoption, the importance of monitoring the trends is critical as blockchain domain names cannot easily be regulated or stopped, meaning that users of blockchain domain names may choose them precisely because of the lack of restrictions, enabling sinister or abusive activity online. For these reasons, we suggest five key pragmatic recommendations for policymakers looking to address these concerns.

Increased alliances and policy forums are recommended to ensure that the interests of stakeholders, brands and users are protected. Currently no policies or laws exist to effectively tackle the challenges with blockchain domain names. Although blockchain domain names are decentralised, to deal with some of these issues there need to be organisations or forums that allow for policy discussions.

There are several initiatives and organisations that are designed to ensure the progress and development of blockchain domain names such as the Web3 Domain Alliance (Web3 Domain Alliance 2022) or ENS Labs (ENS Labs 2018). These organisations can help to address issues around name collisions and brand infringement with a ‘blacklist’ system. They can also encourage browser interoperability and support users with their blockchain domain names. Multi-stakeholder governance may move blockchain domain names away from total decentralisation, but it is recommended to make the blockchain domain name environment healthier for the internet and move towards a more integrated, less fragmented model.

Unity between blockchain domain providers is critical as the number of different providers offering different models is increasing and this escalates the challenges with name collisions, brand or trademark infringement and abuse through use cases.

ICANN participation or involvement is needed to ensure these challenges are adequately addressed. Name collisions are a concern, with the next round of TLDs expected, and multiple name collisions already exist. The ability to bridge blockchain domain names and DNS means that ICANN needs to participate in the discussion. It should adopt a pragmatic approach towards blockchain domain names, particularly as further integration between the DNS and blockchain is expected.

Upskilling and diversification of stakeholders is recommended to create adequate policies that tackle the challenges faced by all parties. As highlighted by Tapscott and Tapscott, ‘The blockchain movement is overpopulated by men’ (2018, 287). Our qualitative analysis lacked representation from female subject matter experts. Therefore, it is crucial that future studies and policy development initiatives prioritise, and ensure, balanced participation of both male and female stakeholders. By doing so, we can harness a diverse range of perspectives, experiences and insights, enabling the creation of more inclusive and effective policies that address the needs and concerns of all individuals involved in the Blockchain and DNS ecosystem. Furthermore, this specialist area requires specialist knowledge. Stakeholders must upskill to understand the challenges and to solve the issues.

Further research and monitoring of trends will be crucial. This study has discussed some of the potential risks, challenges and opportunities of blockchain domain names, which is vital as the literature is limited. As the trends continue to increase towards more registrations, so will the use cases and their adoption. It is important to monitor these trends for changes or abuse, as blockchain domain names can quickly evolve and change due to their decentralised nature. There are more blockchains and providers enabling features, and this is expected to progress as the technology advances.

Conclusion

Blockchain domain names are a burgeoning trend that may change the way in which we use the internet as part of a new Web3 era. Although the success of adoption is speculative in nature, this article has shown that the potential for disruption is clear and must be addressed. Due to their decentralised nature, they are difficult to control or stop, offering risks and opportunities. There are currently no clear policies or laws to deal with brand infringement or name collisions. Initiatives exist to achieve more cohesive policies to tackle these issues. With five key recommendations to address the risks while enabling opportunities, we have shown that it is important to engage with blockchain domain names in a pragmatic way. This new area of research within alt-roots is still in its infancy and requires upskilling and understanding. More research and evidence-based studies are required to understand whether the intended use cases are being utilised, as well as assessing blockchain domain name abuse. Currently, the potential of blockchain domain names is broad but speculative. Internet communities must work together to integrate the potential negative and positive impact that it may have into their policies.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Correction Statement

This article has been corrected with minor changes. These changes do not impact the academic content of the article.

Additional information

Notes on contributors

Nathan Alan

Georgia is a Senior Research Analyst at Oxford Information Labs and Research Community Manager at the DNS Research Federation. She has 5 + years of experience previously working within counterterrorism and law enforcement, intelligence analysis, investigations, and policy analysis. Her previous roles include working in London’s Metropolitan Police Counterterrorism Command, and in an international law firm. She has a master’s degree in international studies and diplomacy from SOAS University of London. As well as managing the Research Community for the DNS Research Federation, Georgia produces research on emerging technologies such as Blockchain, AI and Quantum as well as digital policy and regulations.

At the DNS Research Federation, Nathan has been responsible for developing and architecting the front end software used to power the DNS Analytics Platform (DAP.LIVE). With 10 + years experience building and maintaining websites and mobile applications, Nathan is an expert in modern javascript frameworks, and has experience creating hybrid apps that work across multiple platforms for well know high street retailers, delivery companies, and domain registrars. Nathan has also recently co-authored a research paper based on the impact and governance gaps surrounding Blockchain Domain Names, and has helped support other DNS based research projects through data gathering and data analysis. Nathan is currently the Director of Engineering at DNS Research Federation, and holds a BSc(Hons) in IT from Oxford Brookes University.

Notes

1 See Figure 1.

2 A top-level domain (TLD) is the segment of the domain name that immediately follows the ‘dot’, for example, .com or .org are examples of popular TLDs.

3 ‘Cybersquatting’ is a practice that involves registering specific domain names on the internet for a web address, particularly well-known brand or company names, and trying to resell them for profit.

4 ‘Gas fees’ are the fees required to conduct a transaction to execute a smart contract on the Ethereum blockchain platforms successfully.

5 See Figure 1.

6 See Figure 1.

7 See Figure 2.

8 See Figure 2

9 See Figure 2.

10 See Figure 2.

11 See Figure 1.

12 Discord is a text, video and voice chat application. A discord channel is a community of users who have joined a particular group on Discord for a specific purpose.

13 Universal Acceptance is the implementation of a policy and technical universality that all TLDs and Internationalized Domain Names (IDNs) or email addresses are treated equally, and different linguistic scripts are treated the same as Western linguistic script.

14 ASCII is abbreviated from American Standard Code for Information Interchange.

15 This domain name is currently protected on UNS.