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A report published by ICANN (The Internet Corporation for Assigned Names and Numbers) in late 2024 highlights a growing need for collaboration between decentralized blockchain-based domain systems and the existing domain name governance framework. While ICANN is identifying this as a point of interest, opinions on the role of blockchain in domain ownership vary widely.
To explore one perspective on blockchain’s potential impact, we spoke with Zainan Victor Zhou, a blockchain and domain industry expert and CEO of Namefi.io. In this interview, Zhou shares his views on how he believes blockchain will reshape the domain space, the challenges of adoption, and the future of Web2 and Web3 domain names.
it.com Domains: To start with, tell us a bit more about what you do and how you see the role of Namefi.io in the domain industry.
Zainan Victor Zhou: We tokenize domain names, making them assets on the blockchain. This makes it easy to verify the ownership, trade them, and engage in new features that were very difficult without the Web3 rails. In a nutshell, we allow people to own a domain name as an NFT (non-fungible tokens) and open the doors to new actions domain owners can take that they could not do before.
For starters, domain name trading has a problem of speed. In a traditional model, you register a domain with a registrar, and if you want to transfer ownership, you need to request it to be unlocked, then you have to list it on marketplaces, that have limited visibility, then assuming you find the buyer, the settlement still requires a lot of trust to the intermediary and a long time. Your capital is locked for some time, and you need to rely on customer support to facilitate the transfer. If you own a domain as an NFT however, and you want to transfer the ownership – you can do it in a second trusting only the code of the auditable smart contract. In these terms, blockchains are better ledgers that you can rely on for owning, holding, and transferring domain names.
it.com Domains: You’ve already mentioned that traditionally, domain names are registered and managed through a centralized system. How do you see the blockchain transforming the way people own and manage domain names?
ZVZ: Firstly, it becomes very fast, with far less chance for friction or errors when buying and selling domains. Second, we unlock new ways these assets are used. Take for example an interesting use case: a person or a company might want to borrow money against a domain name as collateral. It’s difficult to do it within a traditional system, as anyone who lends you money needs to rely on a registrar as a guarantor. By bringing your domain name on the blockchain, the lender and borrower can transact at the speed and trust guarantees of the blockchain.
Source: Unsplash
In another use case, as long as we can use cryptography for authorization, we can also allow a group of people to use it together. Let’s say, you have a company where only two people – a CEO and a CFO – can sign off a domain ownership transfer. Domain name NFTs will enable the domain transfer to happen only if, for example, the required people sign off on it.
it.com Domains: Here’s a scenario. I have a domain that I got from a traditional registrar, and I decided to tokenize it as an NFT and sell it. If I transfer the NFT ownership, would there be a record in a traditional system about the sale? How are the systems integrated?
ZVZ: Firstly, there is a distinction between Web3 native domain names and ICANN-compliant domain names. There are services powering Web3 native domain names – for example, Handshake (HNS) domains which use the blockchain to decentralize the traditional DNS system, or Unstoppable Domains (.crypto, .nft, .blockchain, etc.) which allow easy crypto transactions and Web3 identities, or Bonfida (.sol), a domain service for the Solana blockchain. These domain name systems are completely on-chain, and the ownership is native to the blockchain.
On the contrary, we work with Web2 domain names we have all been familiar with since 1996. When the NFT changes hands, the sale of those assets will not be reflected in the ICANN registry of owners immediately, until the new owner decides to make changes to the website.
The record inserted into the traditional system is the NFT identifier – so there is a record of which NFT represents the asset on chain. If the buyer of a name buys it as an NFT, Namefi serves as the proxy owner of the domain name. This means that the buyer is not reported to the traditional systems until such a time as they wish to make changes to the website.
So if a domain buyer only wishes to hold the name for investment reasons or because they may want to start a business with it later, they can hold it in their wallet without declaring their PII to traditional centralized systems.
it.com Domains: ICANN currently plays a central role in domain name governance. How do you see blockchain-based decentralized DNS (BDNS) sharing a role with ICANN in the mid or long-term future?
ZVZ: In late 2024, Paul Hoffmann, a Distinguished Technologist at ICANN, published a report to explain to the ICANN leadership and community the implications of the blockchain on domain name systems, and highlight the need to better understand and engage with the blockchain name systems.
Traditionally, ICANN has been very conservative about the blockchain, but the sentiment has become more open – and, as a developer focused on standards in Ethereum and previously at Google, I welcome it. I believe that the blockchain will become a new foundation of digital trust. While the internet helped digitize information, I think the trust has not yet been digitized and still relies on traditional approaches.
Even though there are many good Web3 native domain names that I respect, the world still relies on a centralized domain system managed by ICANN for most of us; URLs that resolve to web pages, emails, and scripts that run on 99% of devices today. I believe the rails blockchain tech has to offer will benefit the domains – who knows, maybe in 3-5 years ICANN will be running its own blockchain!
But don’t get me wrong – I don’t think that the blockchain can replace what ICANN does. My contrarian prediction is that ICANN will be even more relevant in the coming years! Let me expand on that. Many people still think about domains in the context of websites, but not many realize how much of the trust they have in a brand or company depends on the trust they can put on the domain name. Imagine your favorite company loses its domain. Their email will stop working, you can’t log into their offering), and you can’t manage your orders with them. Your entire trust in how you engage an organization or company relies on the trustworthy functioning of their domain name. With time, the importance of domain names as we have always known them – and ICANN as a governing force to stop breaches or violations – will only grow.
it.com Domains: There is a discussion now about the rise of AI-powered search like Google’s AI Overviews, Perplexity, or ChatGPT search. In a new era where a search platform generates a response about your brand, your domain becomes a single source of truth for searchers to validate that response. Would you agree?
ZVZ: With the rise of AI, fakes are becoming harder to detect – and we know that AI can hallucinate. I foresee the role of a domain would be to endorse a fact, terms and conditions, or a piece of content users receive from elsewhere – from AI, from social media, etc.
The most natural way for a user to validate something about a company is to go on their website, right? To validate the offering of a company you go to their website or to validate a claim John Doe is the CEO of a company you go to their website. So domain names serve as a primary means of confirmation that a user is in the right place to validate claims as the trust-worthy source of information.
it.com Domains: Going back to the tokenization of the domain names. Being in the industry, you see how people react to the idea. What is the typical response – are there any doubts, misconceptions, or blockers to the adoption of this idea?
ZVZ: One of the biggest challenges is that users struggle to see the value of domains being tokenized. Yet we try to counterweight those doubts with the idea of faster, safer, and more liquid domain ownership. If your domain turns into NFT, any DeFi App (Decentralized Finance application) would be able to work with it.
Some have tokenized and transacted domain names on chain, and love the simplicity of listing, marketing, and settling immediately. We love our first adopters and work hard every day to bring them new ways to monetize and use their domain names.
it.com Domains: What’s the risk of tokenizing domains for the owners?
ZVZ: Just like with any registrar, there is inherently some level of trust you need to have. Any registrar’s system can go down, and there can be human or computer errors, yet the blockchain has a lower error ratio.
Let’s think about a negative scenario of losing a domain. If you own a domain with a traditional registrar, and for some reason, an unauthorized transfer got processed (in other words, you lost a domain), it’s hard to agree on why it happened. Did your account get compromised? Or was there an issue in the registrar’s system?
With the blockchain, there will be a signature of transaction on-chain. You will know who was the one authorizing it. The separation of responsibility is very clear, and it helps build trust.
Just like in the early days of the internet, the infrastructure is still being built. With more freedom of using assets, the user has to have some knowledge – for example, they need to understand what a Web3 wallet is, how to sign transactions, secure their keys, and how to avoid phishing.
Source: Pexels
it.com Domains: Is there potential for a “Domain Name Gold Rush” in the blockchain ecosystem? We’ve seen significant interest in NFTs for various digital assets in the past. Do you foresee a similar surge in demand for tokenized Web2 domains or Web3 native domains?
ZVZ: It’s an interesting idea. People naturally like good names. With decentralization making it easier to trade domains, I would imagine a growing interest and passion for domain names in the Web3 community. If you have more liquidity to monetize your skill in finding good names people would want, would you also not want to buy more domain names?
it.com Domains: Looking ahead: what’s your vision for the future of domain names? In five years, how do you envision the landscape of domain name ownership?
ZVZ: I’d like to draw an analogy with mobile phones. When people used them only to call and send SMS, they were useful – but not as useful as they are now when you can use them for authentication, place an online order, or stream a video.
In the future, domain names will be more than a place for browser-resolvable content and e-mails. They will be a critical tool for publishing provable facts about yourself such as your associations with entities, on-chain assets you own, and how we come to streamline parts of e-commerce. Both ICANN and blockchain developers can see to that.
Keen to stay on top of industry trends? Visit it.com Domains’ blog and connect with us on social media.
Continue reading at the it.com Domains blog...
To explore one perspective on blockchain’s potential impact, we spoke with Zainan Victor Zhou, a blockchain and domain industry expert and CEO of Namefi.io. In this interview, Zhou shares his views on how he believes blockchain will reshape the domain space, the challenges of adoption, and the future of Web2 and Web3 domain names.
NFTs and Domains
it.com Domains: To start with, tell us a bit more about what you do and how you see the role of Namefi.io in the domain industry.
Zainan Victor Zhou: We tokenize domain names, making them assets on the blockchain. This makes it easy to verify the ownership, trade them, and engage in new features that were very difficult without the Web3 rails. In a nutshell, we allow people to own a domain name as an NFT (non-fungible tokens) and open the doors to new actions domain owners can take that they could not do before.
For starters, domain name trading has a problem of speed. In a traditional model, you register a domain with a registrar, and if you want to transfer ownership, you need to request it to be unlocked, then you have to list it on marketplaces, that have limited visibility, then assuming you find the buyer, the settlement still requires a lot of trust to the intermediary and a long time. Your capital is locked for some time, and you need to rely on customer support to facilitate the transfer. If you own a domain as an NFT however, and you want to transfer the ownership – you can do it in a second trusting only the code of the auditable smart contract. In these terms, blockchains are better ledgers that you can rely on for owning, holding, and transferring domain names.
it.com Domains: You’ve already mentioned that traditionally, domain names are registered and managed through a centralized system. How do you see the blockchain transforming the way people own and manage domain names?
ZVZ: Firstly, it becomes very fast, with far less chance for friction or errors when buying and selling domains. Second, we unlock new ways these assets are used. Take for example an interesting use case: a person or a company might want to borrow money against a domain name as collateral. It’s difficult to do it within a traditional system, as anyone who lends you money needs to rely on a registrar as a guarantor. By bringing your domain name on the blockchain, the lender and borrower can transact at the speed and trust guarantees of the blockchain.
Source: Unsplash
In another use case, as long as we can use cryptography for authorization, we can also allow a group of people to use it together. Let’s say, you have a company where only two people – a CEO and a CFO – can sign off a domain ownership transfer. Domain name NFTs will enable the domain transfer to happen only if, for example, the required people sign off on it.
ICANN and Blockchain: Better Together?
it.com Domains: Here’s a scenario. I have a domain that I got from a traditional registrar, and I decided to tokenize it as an NFT and sell it. If I transfer the NFT ownership, would there be a record in a traditional system about the sale? How are the systems integrated?
ZVZ: Firstly, there is a distinction between Web3 native domain names and ICANN-compliant domain names. There are services powering Web3 native domain names – for example, Handshake (HNS) domains which use the blockchain to decentralize the traditional DNS system, or Unstoppable Domains (.crypto, .nft, .blockchain, etc.) which allow easy crypto transactions and Web3 identities, or Bonfida (.sol), a domain service for the Solana blockchain. These domain name systems are completely on-chain, and the ownership is native to the blockchain.
On the contrary, we work with Web2 domain names we have all been familiar with since 1996. When the NFT changes hands, the sale of those assets will not be reflected in the ICANN registry of owners immediately, until the new owner decides to make changes to the website.
The record inserted into the traditional system is the NFT identifier – so there is a record of which NFT represents the asset on chain. If the buyer of a name buys it as an NFT, Namefi serves as the proxy owner of the domain name. This means that the buyer is not reported to the traditional systems until such a time as they wish to make changes to the website.
So if a domain buyer only wishes to hold the name for investment reasons or because they may want to start a business with it later, they can hold it in their wallet without declaring their PII to traditional centralized systems.
it.com Domains: ICANN currently plays a central role in domain name governance. How do you see blockchain-based decentralized DNS (BDNS) sharing a role with ICANN in the mid or long-term future?
ZVZ: In late 2024, Paul Hoffmann, a Distinguished Technologist at ICANN, published a report to explain to the ICANN leadership and community the implications of the blockchain on domain name systems, and highlight the need to better understand and engage with the blockchain name systems.
Traditionally, ICANN has been very conservative about the blockchain, but the sentiment has become more open – and, as a developer focused on standards in Ethereum and previously at Google, I welcome it. I believe that the blockchain will become a new foundation of digital trust. While the internet helped digitize information, I think the trust has not yet been digitized and still relies on traditional approaches.
Even though there are many good Web3 native domain names that I respect, the world still relies on a centralized domain system managed by ICANN for most of us; URLs that resolve to web pages, emails, and scripts that run on 99% of devices today. I believe the rails blockchain tech has to offer will benefit the domains – who knows, maybe in 3-5 years ICANN will be running its own blockchain!
But don’t get me wrong – I don’t think that the blockchain can replace what ICANN does. My contrarian prediction is that ICANN will be even more relevant in the coming years! Let me expand on that. Many people still think about domains in the context of websites, but not many realize how much of the trust they have in a brand or company depends on the trust they can put on the domain name. Imagine your favorite company loses its domain. Their email will stop working, you can’t log into their offering), and you can’t manage your orders with them. Your entire trust in how you engage an organization or company relies on the trustworthy functioning of their domain name. With time, the importance of domain names as we have always known them – and ICANN as a governing force to stop breaches or violations – will only grow.
it.com Domains: There is a discussion now about the rise of AI-powered search like Google’s AI Overviews, Perplexity, or ChatGPT search. In a new era where a search platform generates a response about your brand, your domain becomes a single source of truth for searchers to validate that response. Would you agree?
ZVZ: With the rise of AI, fakes are becoming harder to detect – and we know that AI can hallucinate. I foresee the role of a domain would be to endorse a fact, terms and conditions, or a piece of content users receive from elsewhere – from AI, from social media, etc.
The most natural way for a user to validate something about a company is to go on their website, right? To validate the offering of a company you go to their website or to validate a claim John Doe is the CEO of a company you go to their website. So domain names serve as a primary means of confirmation that a user is in the right place to validate claims as the trust-worthy source of information.
DNS Meets DeFi: Turning Domains into Digital Gold
it.com Domains: Going back to the tokenization of the domain names. Being in the industry, you see how people react to the idea. What is the typical response – are there any doubts, misconceptions, or blockers to the adoption of this idea?
ZVZ: One of the biggest challenges is that users struggle to see the value of domains being tokenized. Yet we try to counterweight those doubts with the idea of faster, safer, and more liquid domain ownership. If your domain turns into NFT, any DeFi App (Decentralized Finance application) would be able to work with it.
Some have tokenized and transacted domain names on chain, and love the simplicity of listing, marketing, and settling immediately. We love our first adopters and work hard every day to bring them new ways to monetize and use their domain names.
it.com Domains: What’s the risk of tokenizing domains for the owners?
ZVZ: Just like with any registrar, there is inherently some level of trust you need to have. Any registrar’s system can go down, and there can be human or computer errors, yet the blockchain has a lower error ratio.
Let’s think about a negative scenario of losing a domain. If you own a domain with a traditional registrar, and for some reason, an unauthorized transfer got processed (in other words, you lost a domain), it’s hard to agree on why it happened. Did your account get compromised? Or was there an issue in the registrar’s system?
With the blockchain, there will be a signature of transaction on-chain. You will know who was the one authorizing it. The separation of responsibility is very clear, and it helps build trust.
Just like in the early days of the internet, the infrastructure is still being built. With more freedom of using assets, the user has to have some knowledge – for example, they need to understand what a Web3 wallet is, how to sign transactions, secure their keys, and how to avoid phishing.
Source: Pexels
it.com Domains: Is there potential for a “Domain Name Gold Rush” in the blockchain ecosystem? We’ve seen significant interest in NFTs for various digital assets in the past. Do you foresee a similar surge in demand for tokenized Web2 domains or Web3 native domains?
ZVZ: It’s an interesting idea. People naturally like good names. With decentralization making it easier to trade domains, I would imagine a growing interest and passion for domain names in the Web3 community. If you have more liquidity to monetize your skill in finding good names people would want, would you also not want to buy more domain names?
it.com Domains: Looking ahead: what’s your vision for the future of domain names? In five years, how do you envision the landscape of domain name ownership?
ZVZ: I’d like to draw an analogy with mobile phones. When people used them only to call and send SMS, they were useful – but not as useful as they are now when you can use them for authentication, place an online order, or stream a video.
In the future, domain names will be more than a place for browser-resolvable content and e-mails. They will be a critical tool for publishing provable facts about yourself such as your associations with entities, on-chain assets you own, and how we come to streamline parts of e-commerce. Both ICANN and blockchain developers can see to that.
Keen to stay on top of industry trends? Visit it.com Domains’ blog and connect with us on social media.
Continue reading at the it.com Domains blog...
