Crypto name services projects attempt to make crypto wallet addresses more accessible to the general public by creating placeholders to make them human-readable and memorable.
A regular crypto wallet address with 42 random characters that can be used for crypto transactions is like this: “0xAf8d71ebDA5E52b7844c0C3853AD44032dfff337” where a crypto domain name service can bear the same function by having the placeholder name of “TheCronicle.CRO“.
Placeholder name services that work as wallet addresses are an obvious improvement because they are less intimidating and more human-compatible than 42 random characters. It is also more recognizable to the newcomers to crypto as the money-sending apps are adopted the same style of wallet names: usernames as placeholders to be sent money.
What should you know about the design of CRO domains to make an informed decision?
Crypto name services are not native to blockchain networks. They are workarounds to solve a specific problem of practicality for converting machine-readable code into human-readable code to provide seamless surfing on the internet. Website domains work similarly as placeholder names for DNS addresses like “126.96.36.199” converted to “TheCronicle.com” for ease of use. Although difficulties arise regarding how CRO domains are designed, they are only as functional as the developers of the service and especially the network effect of its usage.
CRO domains, or ETH domains, are essentially NFTs. However, they are intended to be DNS protocols of blockchain networks.
DNS protocol is a universally accepted standard of how the phonebook of website names are utilized; even though it is an accepted standard and runs the entire internet, it wasn’t like that before, and there were other competing protocols before its wide acceptance. However, in the end, DNS won, and other protocols died out.
It is the same case with CRO domains. Any developer team can create their own CRO protocol on the Cronos Chain. Since the protocol is essentially an NFT contract that isn’t native to the blockchain like wallet addresses, its usability is driven by other Decentralized Applications adopting it.
What is the example of two competing CRO domain services, and how to make sense of it?
Here are two different Cronos Name Service Dapps:
Both of them provide the same service, but the funny thing is when a domain like Cronos.cro is purchased at one Dapp, the same domain can be bought from the other Dapp by a different person because these Dapps do not share the same protocol as Domain Name System that is shared between GoDaddy.com and Google Domains. GoDaddy and Google Domains share the same phone book for the domains through DNS. A universal protocol is accepted even though vendors of domains are different, so when a domain is purchased at one, it can’t be bought from the other. They can also be transferred between domain providers because DNS protocol is only accepted across all internet, making navigating to 1+ billion plus websites possible regardless of which provider they are purchased from.
Emerging name services like CRO Domains are still new. No universal standard is accepted yet for Cronos network to be settled with a particular one. There is an opportunity window for any other project who wants to create a domain service on Cronos to race to become the widely accepted convention throughout the network.
Ethereum Name Services can be exemplified as a protocol that has achieved this on the Ethereum network because other name services in Ethereum are nowhere close to it. Since the protocol has an immense network effect of its first mover advantage and Ethereum’s massive scale, the investing dynamics of ENS are different from the current Cronos Domains we have on the Cronos Chain because no particular project/protocol hasn’t dominated the Cronos network as ENS did on Ethereum. The risk of another protocol coming and taking the whole pie remains, rendering previously purchased CRO domains useless if that happens.
What does this mean for people who have bought CRO Domains or those planning to?
As domain names were an investment opportunity when they were first available for purchase on the open internet, as there are Ethereum domain names that have been sold for hundreds of thousands of dollars, Cronos domains can also be an investment opportunity for highly demanded names when done right.
The most expensive DNS names so far:
- CarInsurance.com — $49.7 million
- Insurance.com — $35.6 million
- VacationRentals.com — $35 million
The most expensive ENS names so far:
- paradigm.eth — 420 Ethereum
- 000.eth — 300 Ethereum
- porno.eth — 184 Ethereum
There is not enough data to determine the most expensive “.CRO” domain names because there is not a widely accepted protocol on the Cronos chain for people to invest a considerable amount of money confidently. Furthermore, Cronos Chain’s market isn’t that big for a high amount of capital to search for investment opportunities for domain names. There is also not enough adoption for CRO name services for the same reason.
An investor can take on the risk, choose a Cronos name service, and stock up on potentially valuable domains. This approach can pay off at the end of the day if the protocol they have chosen would be the “.CRO” standard of the Cronos Chain network in the future. However, the environment we are in signifies that there is not much data that back up the current protocols’ market encompassing success in the future. Since adoption is very low, a competent team that doesn’t exist yet can create a superior protocol that drives wide adoption and quickly surpass current projects through network effects.