Traditional vs. Blockchain Domains: Shaping Value and Utility

Understanding Domain Value in Web 2.0

Traditional internet domains have established value models based on factors like:

1. Traffic and Revenue Potential: High-traffic domains, especially those tied to lucrative markets, often command high prices due to ad revenue potential and visibility.
2. Brand Power: Memorable, short domains or those relevant to large markets (like Cars.com) are highly valued and can sell for millions.
3. Scarcity and Leasing: Internet domains are “leased,” not owned, with renewals providing a way to secure continued control. Competition for unique names fuels their market worth.

Blockchain Domains: Ownership, Identity, and New Revenue

Blockchain domains, such as .NetZylo, are decentralized and, once purchased, are fully owned by the buyer, with no renewal fees or centralized entity controlling them.

1. Human-Readable Wallets and Identity: Blockchain domains like rich01.NetZylo offer simplified, human-readable wallet addresses, making crypto transactions straightforward and providing users with a self-sovereign web identity. These domains can link users across all of web3, from sending NFTs to receiving crypto.
2. Revenue Through Sub-Level Domains: TLD owners can create a new revenue stream by selling SLDs (e.g., rich01.NetZylo), building brand identity and user communities under a single TLD.
3. NFT and Wallet Revenue: NetZylo enables brands to onboard users with email-generated wallets, linking each user’s web3 identity for seamless wallet and NFT interactions. This integration lets brands further monetize through branded NFT experiences directly within user wallets.

Challenges and Opportunities in Blockchain Domain Adoption

Blockchain domains have immense potential but face adoption barriers:

1. Technical Limitations: Setting up blockchain domains often involves decentralized hosting solutions (e.g., IPFS) and compatible browsers. However, as infrastructure improves, user-friendly integration should become more accessible.
2. Cross-Dapp Compatibility: Previously, email-generated wallets often only worked within specific platforms, but recent innovations mean they can now connect with any on-chain app, expanding user experience across the ecosystem.
3. Blockchain Security and Hard Wallets: Unlike traditional domains, blockchain assets are stored in decentralized wallets on an immutable blockchain, which remains unbreached—a striking contrast to internet domains frequently hacked for billions annually. To enhance security, NetZylo offers Tangem cards, a cold storage solution that safeguards blockchain domains, NFTs, and assets, preventing unauthorized access and ensuring security far superior to traditional, centralized systems.

The Growing Value of Blockchain Domains

As the digital landscape advances, blockchain domains are likely to follow a similar value trajectory to traditional domains, backed by several industry shifts:

1. Physical-Digital Integration: With the rise of digital-first platforms, tokenized assets, and “phygital” experiences blending physical and digital spaces, blockchain domains become essential for verifiable, user-owned identities.
2. Scarcity and Emerging Regulation: The blockchain domain industry is moving toward cross-platform registry integration, allowing for shared registries and reducing domain duplication. This will ultimately drive demand and scarcity, echoing traditional domains. Additionally, potential regulatory developments could provide safeguards, creating a more structured, reliable ecosystem.

Why Blockchain Domains Are Poised for Long-Term Value

Blockchain domains offer a pathway to own digital identity, revenue potential, and security with platforms like NetZylo spearheading the shift by providing tools for secure onboarding and direct engagement. With evolving use cases in NFTs, wallets, and web3 compatibility, blockchain domains stand to become a critical component of the digital economy, bridging the gap between user-owned identities and brands ready to leverage their value.

As digital integration continues, the importance of self-sovereign, blockchain-based domains will likely grow, offering decentralized ownership with top-level domains that empower users, brands, and communities alike.

Author – The NetZylo Team