The ENS domain gold rush

,Welcome to Domains Insider for July 15th, 2022.

We’ve got a great issue today, chock-full of info, opportunities & ideas.

New here? Read our primer on Investing in Domain Names.

July 15, 2022 | ± 5 minutes

CONTENTS:

  • A primer on crypto domains
  • 105.eth available on Rally
  • Alts community domains for sale!
  • Quality aged domains from our partners Odys

Let’s go!

Investing in crypto domains

In our last issue, we talked a bit about ENS domains and why they’re valuable.

Think of ENS domains as short URLs for your Ethereum address (“0x…”). ENS lets you create a universal nickname for your crypto addresses, providing a more easily accessible way to make crypto wallets that live on a variety of other platforms.

The two most popular ENS domains are .xyz, and .eth. This week, Rally is offering an ENS domain for the first time, which we’ll get into below.

But first, a bit more on crypto domains. While the DNS domain name market is a billion-dollar market (GoDaddy alone did $3.8 billion last year), it’s a bit of slow-moving environment. There isn’t much new happening, and the existing players are well-defined.

Crypto domains have recently been the fastest moving part of the domain name market, and it’s not yet clear who the kingmakers are. Opportunities exist for totally new players.

The energy around domain trading has begun to shift towards these crypto domains, and now make for an intriguing and somewhat unique investment opportunity. I think these crypto domains are a great way to get indirect exposure to the crypto ecosystem without the volatility.

There are a relatively low number of users in the industry. According to TechJury, over 100,000 domains are registered every single day. But that number is much lower when it comes to crypto domains. And it’s an especially intriguing time given a) We’re in the ENS early days, and b) We’re in the middle a crypto winter.

ENS domain registrations have surged even as the token plummets. Less capital in crypto = lower prices for crypto derivatives. So now may be a good time to get involved.

Companies offering ENS domains have certainly done well over the past year. Unstoppable Domains and Cloudname, for example. Cloudname is interesting because they provide a platform for buying, selling, and renting both crypto and traditional domains. They offer a solid variety of extensions and their user interface is pretty easy to use.

The average price of a .com domain on primary markets is about $14.50. But, if we take a look at secondary markets, the price skyrockets to $1,660 (increase of +11,757%). With that in mind, ENS domains on secondary markets like OpenSea are starting to shoot up once again…

Secondary ENS sales are one of the few bright spots in crypto right now.

Marketplace domain drops

105.eth on Rally

This week Rally is IPOing 105.eth

Rally’s been hyping this one up pretty heavily. It’s their first time fractionalizing an ENS domain, though not their first time fractionalizing any domain.

The first domain Rally ever fractionalized (to be fair, the first domain any company ever fractionalized) was directions.com back in January. In my opinion, it was an odd choice with poor pricing. The domain sold out at $140k, though it hasn’t opened up for secondary trading yet.

Being an ENS domain, this certainly has more utility. Sending funds to a simple 3-digit ENS wallet will be considerably easier than sending to a longer string of characters. And the fact that it’s a 3-digit ENS domain means owners will be a part of what’s become known as “the #999 club“, referring to the first 999 numeric ENS domains.

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But does being in this 999 club really make that big of a difference? Is it really that much more convenient or status-establishing than the 10k club? Or the 100k club?

Remember there’s no monopoly on this stuff. Sure, low digit domains have plenty of hype today among early ENS/crypto bulls. But how much will 3-digit ENS domains really matter in the future? And why is 105 a significant number? Does 105.com matter today? 711.eth I could see (7-11 corporation might pay up for it) Or 911.eth (emergency funding) Or 555.eth (movies, etc)

But 105? So it’s three digits, okay. But why does this particular number actually matter in the scheme of things?

And let’s not forget that there are many different types of ENS domains! Sure, .eth could become the .com of ENS. But they’re fundamentally not any different than .xyz, .crypto, .nft, or any of the countless ENS domains that will certainly pop up in the future.

Rally’s market cap on 105.eth is $40k, and our inferred value is [Insiders Only] based on the average sales price of the highest-selling 3-digit numeric ENS domains over the past week.

It’s not necessarily a bad IPO, it’s just that there are better opportunities out there right now. We’re entering fire sale territory on lots of assets right now. (Heck, we’re entering fire sale territory on stocks!) But this certainly isn’t fire sale pricing. If nothing else it’s a proxy bet on the popularity of ethereum, without direct exposure or (as much) volatility.

Personally, I do see some value in ultra-simple, single-word ENS domains. But I’d be more bullish on brand name ENS domains. Some people are hoarding these in hopes of an eventual sale to a forward-thinking company with deep pockets.

My theory on brand domain squatting is that you don’t actually want to go too far upmarket. It sounds easy enough to register nike.eth or coke.eth and hope for an eventual sale. But companies like Nike and Coke have hordes of legal armies that will ultimately try to protect their branded terms, and prevent you from using it. History has shown they’d rather fight you than pay you.

Instead, you want to go after the smaller companies that don’t have deep pockets, but want to protect their small but growing brands at all costs.

And on that note, we have a community member who has done exactly that…

Domains from the Alts community

NakedHarvest.com

One of our community members, Julia, is super health-conscious. She buys green powders, plant protein, and vegan hot chocolate every month from a growing business called Naked Harvest, a company that makes delicious products with top-notch ingredients.

As a result their organic traffic has skyrocketed.

Naked Harvest’s organic visitors are up 7x over the past 2 years.

But here’s the thing: Naked Harvest doesn’t actually own the nakedharvest.com domain!

That’s right, their domain is the unbelievably long and ugly, “nakedharvestsupplements.com” Ugh. 🤮

Recently, Julia realized that nakedharvest.com was actually available to hand-register. So she did exactly that. This is exactly the sort of company that would want to own the .com domain for their business.

Click below to make an offer on nakedharvest.com. It’s a great domain regardless. But the fact that a rapidly growing company has the exact same business name is icing on the cake…and could be very profitable.

Other Community Domains

We have a few more primo domains from Alts community members:

DAO Domains

Finally, Alts community member Jan is a crypto domain entrepreneur who has been building the world’s largest DAO domain portfolio. Last time we checked in with him he had 670. It’s now over 2,500 premium DAO names.

He’s sold a bunch of these individually (VacaDAO.com, EvilDAO.xyz, BarrelDAO.xyz, ShellDAO.xyz, LegionDAO.xyz, SoulDAO.xyz), but has now decided to sell his entire portfolio as a single bundle because he needs capital to launch a startup in the nutrition industry.

Oh, and he’s been documenting his journey on our Discord.

This is a very intriguing opportunity for the right investor. Good DAO names routinely sell for thousands of dollars each, and he’s got some terrific ones, including:

  • RapperDAO.com
  • PirateDAO.com
  • StonksDAO.com
  • HamburgerDAO.com
  • EagleDAO.xyz
  • And over 2,500 more

He’s currently speaking with crypto entrepreneurs, and dropping the asking price each week until someone snaps it up (what’s known as a Dutch Auction).

If you’re interested in finding out the current price, email Jan at [email protected], message him on WhatsApp at +420-721-435-559, or on Telegram @DAOHatchery

Two premium domains to consider

We’ve talked a lot about buying aged domains in the past — specifically through a company I love called Odys.

Investing in one of Odys‘ premium domains is always a wise decision. Here are 2 you should consider:

HowsBusiness.org

Help people be more productive

Use this premium domain to build out an authority site focused on business productivity solutions. Fill it with content that includes descriptions, how-to guides, reviews, and articles providing useful and relevant information on various tools, software, and apps for business productivity, analytics, and other related matters. Monetized via affiliate marketing and sponsored content.

Check it out on Odys Global

Weeleo.com

A brandable domain for your startup

Weeleo is the former domain of a FinTech website that facilitated the exchange of currencies between individuals. We strongly recommend building a website that reviews finance products in France like mutual funds, ETFs, trading platforms etc, monetized via affiliate programs.

Check it out on Odys Gl

That’s it for this issue!

Do you have domains you’re looking to sell?

Let us know. We’d love to include them in the next issue.

In the meantime, I’ll leave you with this domain investing wisdom:

Until next time,

Stefan

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Author

Stefan Von Imhof

Stefan Von Imhof

Stefan lives and breathes asset analysis and valuations. Before founding Alts, he was the Head of Product at Flippa, he created and ran Flippa's Due Diligence Program, and has bought & sold dozens of websites & newsletters. Prior to Flippa he was the first product manager at HG Insights, a market intelligence company which sold to Riverwood Capital Partners. Originally from Boston and later Santa Barbara, CA, he now lives in Australia with his wife & Boston Terrier, Charlie.

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