Tokenizing Domains: Exploring The Future of NFT Domains

• Ayushi Abrol
• September 16, 2022

There’s much to be explored in the realm of NFTs. While current use cases primarily revolve around artwork and musical scores, there’s so much more than could be explored. NFT domains, in particular, is a market left untapped. Over the years, domain name investment has contributed significantly to the making of internet billionaires. Lasvegas.com, for example, is currently the most expensive domain name – having been purchased for a whopping $90 million as of 2005, according to Domain Name Statistics.

Tokenization and NFTs

The process of tokenization is the certain next step for domain ownership. With tokenization, you convert your non-physical asset into digital tokens – providing you with the ownership rights of the asset in the form of tokens. Tokenization secures sensitive data, rather than representing irreplaceable digital assets. A tokenization platform will exchange customers’ sensitive data for nonsensitive data known as “tokens” – which contain randomly generated numbers that have no value or association with the original data. As an added bonus, this means that the code can’t be deciphered, as there is no mathematical correlation between the token itself and the code that’s been encrypted.

The process of tokenization has many use cases and applications, one of which includes web hosting and domain names. We’ll dive deeper in the next section.

Domain Tokenization

Domain tokenization is simply the process of tokenizing an existing asset, like a domain, such that it can be owned by multiple people. The value of a digital presence has especially shined during 2020, when the stay-home economy grew and shone. During that time, eCommerce sales jumped 44% and reached a penetration rate of 21%, as reported by Digital Commerce. This means that 21% of all sales occurred digitally.

As with any new technology, the advantages of this process may not be so readily apparent to the new user though, if you have any experience working in the dafter market domain industry, however, you’ll be well aware of some of these benefits:

Website Sellers

For the sellers, tokenization allows fractalization as well as different distribution contribution configurations for employees. Say you created your $10,000 dollar website with 10,000 tokens, with each token representing a dollar. Fractalization allows multiple people to own a fraction of your domain, meaning that you no longer have to wait for a single person willing to shell out $10,000 for a website. This works especially well for start ups as it allows them to offer employee incentives in the form of ownership of the domain, providing them an incentive to perform better.

Buyers

Fractalization also benefits buyers as it allows them to gain a larger pool of quality websites for investment through the use of fractal ownership – providing greater opportunity for diversification into several domains rather than simply owning one. The decentralized exchange also means that the buyer is able to quickly sell off website ownership at Fair Market Value – providing greater liquidity.

How You Can Get Started

Domain tokenization is a rather young technology though starting on your tokenization is a rather clear-cut process. Either you create a site yourself or find a site that you believe will rapidly grow in the future. Don’t worry too much about shelling out thousands of dollars to buy a website, remember that fractalization solves this problem for you.

If you’re interested, make sure to check out Cloudname, the current leading platform to trade and tokenize your domains. Understand the ecosystem, join the community, and start flipping websites today.