When people first started to become aware of NFTs, the whole idea behind them was a little out there. Here were these unique blockchain-based tokens attached to pictures or videos of random items and linked to a crypto certificate as proof of ownership. From cartoon images of bored apes to video clips of the top basketball shots, NFTs took off, with tens of thousands being traded every day.
Now, there is a relatively new kid causing a stir in the crypto world, the so‑called Ethereum (.ETH) domains that are registered using the Ethereum Name Service (ENS). Similar to the DNS system of Web2, ENS is a naming system based on the Ethereum blockchain that converts traditional Ethereum wallet addresses (which typically consist of a jumbled collection of 42 hexadecimal characters) into human-readable names, like brandit.eth.
These “domains” are a form of an NFT that are minted and sold just like any other on marketplaces like Opensea. They can also be linked to one’s cryptocurrency wallet. So, instead of having to provide someone with their long Ethereum address, users can give their .eth domain name to receive a transaction.
Similar to the web domain craze of the early internet, the .eth buying rush has created thousands of new potential digital landlords — some of whom have collected hundreds of domains. In September 2022 alone, 437K new .eth domains were registered, according to ENS Domains, and the hype has also been helped by some top celebrities and big brands who have taken to social media to promote the domains and even changed their social media usernames to ENS names.
Risk to brands wanting to join the hype
As things continue to evolve within Web3 and the creators promise an interchangeable experience between the physical and digital world, it is easy to understand why a lot of brands are excited to enter this space and want to register their very own .eth domain(s).
However, as with any craze, and especially in an environment where your identity remains largely anonymous, bad actors are quick to take advantage of the ease of registering .eth domains incorporating some of the world’s largest brand names with the aim of either reselling the domain to the “rightful” owner or duping unwitting users into transferring money for goods they believe to authentic.
What happens if someone has already registered your desired .eth domain name?
So, what happens if you decide to buy a blockchain domain for your brand but discover someone has already registered it? Further risks arise when there appears to be more than one .eth domain incorporating your name.
Take the example on the left using NHL (the American National Hockey League). You type in the .eth you want – i.e., nhl.eth and a whole bunch of options appear, two with an exact match! How do you know which one is authentic?
Risk to brands wanting to join the hype
The last thing you want is to spend a lot of time, and probably money, obtaining your dream .eth domain only to find out it is not the “official” domain! It can seem a bit overwhelming trying to navigate such a fast-paced and new environment and this is where using an expert in this field really pays dividends.
If you find that your .eth domain has been registered by someone else (or multiple other people) and you have made the decision to make an offer, an expert can:
- quickly establish which .eth domain is authentic
- check if ownership details are available
- review purchase history in order to gauge a reasonable offer
- establish whether there is an expiry date etc. etc.
All of these are essential pieces of information to achieve a successful and satisfactory purchase.
This is not unique to .eth domains either. Other providers of crypto-related domain names (e.g., as .sol (Solana), .bitcoin, and .zil (Zilliqa) have also come onto the market and are becoming popular ways to show that you “belong” in Web3. All with similar risks.
So before you click on that “Make Offer” button, stop and speak to an expert to make sure you’re not making a big mistake.
If you’re a brand owner wanting to learn more about blockchain domains, feel free to contact us.
Or read our list of blockchain domain services here.