by David Barnett, Tom Ambridge and Richard Ferguson
IoTeX has recently announced the approval of a proposal to create a new domain-name system (IoTeX Domain Name Service, or 'IoTeX Name Service' (INS))[1]. The company is a provider of technology linking 'Internet-of-Things' (IoT) devices and blockchain infrastructure - through the development of products such as UCam, a blockchain-powered home-security camera[2]. The new system[3] is an example of Web3 (blockchain) domains being introduced using a DAO ('decentralised autonomous organisation')[4], an entity managed by a decentralised computer program handled through a blockchain[5].
INS will offer blockchain domains with the extension .io. As discussed in a previous article[6], blockchain domains are similar to regular (Web2) domains, in that they can be registered by users across specific extensions, but are decentralised and unregulated by any governing body such as ICANN. In general, they can be used for a number of purposes, such as the construction of memorable wallet addresses for sending and receiving cryptocurrency. One additional development in the case of INS is the option to offer 'name wrappers', a type of smart contract[7] granting the owner the ability to create subdomains of domains under their ownership (such as 'sub.domain.io') and trade them as NFTs in their own right.
Overall, in the blockchain domain arena, the lack of centralisation means that, in theory, the same domain name can exist on multiple different blockchains - an issue known as naming 'collisions'. There is also the risk - as in the INS case - that clashes can arise with regular (Web2) domain name extensions. .io is also a Web2 TLD - technically the country-code TLD for the British Indian Ocean Territory - but one which has been largely adopted for use with technology-related content[8,9]. This issue is likely to cause confusion as and when the adoption of Web3 technologies grows - particularly if native support of blockchain domains by mainstream web browser develops further. This is likely to necessitate the development of appropriate agreements and technological work-arounds.
The industry has already seen a number of disputes over naming collisions. In October 2022, provider Unstoppable Domains ceased selling .coin blockchain domains. This was apparently to boost its argument - as used in a disagreement with competitor provider Handshake over the .wallet extension - that the first provider to achieve market penetration should receive exclusive rights[10].
Other cases regarding control of TLDs in the Web2 world also have parallels with the IoTeX / .io case, by virtue of their relevance to business vs geopolitical issues. One example is the lengthy dispute between e-commerce giant Amazon and the South American member states of the Amazon Cooperation Treaty Organization (ACTO), for control of the .amazon extension[11,12].
As Web3 offerings grow, the prospect of domain name collisions is likely to be a serious concern for brand owners. This is particularly true when considering their defensive domain registration strategies, and when monitoring for third-party infringements and instances of potential brand confusion. However, there is also the possibility that a brand owner may not be aware of a collision until it is too late. The associated technologies also raise a number of other issues around which brands may be wise to be mindful. Two specific examples include:
- Name wrapping - The emergence of tradable blockchain subdomains may transpire to be an area of high risk for companies with multiple brands or family marks. Sports teams may also be susceptible to third parties creating trading-card-style domain names as NFTs (e.g. [player].[football-club].[blockchain-TLD]), or with similar examples surrounding general sporting events, such as the Olympics, World Cup, Tour de France, etc.
- DAOs - This new form of governance may raise questions - such as those concerning the liability of voters - if (for example) they are used by brands for stakeholders to vote on certain company decisions. In one recent case, the US Commodity Futures Trading Commission (CFTC) won a lawsuit against Ooki DAO for offering unregistered commodities and neglecting to observe know-your-consumer laws[13], contravening the prevailing perception that these types of decentralised operators are immune to legal scrutiny[14].
Overall, blockchain domains present new opportunities in claiming fresh digital space. However, in addition to the need for active and defensive registrations to safeguard a brand in Web3, the emergence of a new extension competing with an existing popular TLD like .io is a reminder of the interplay between Web2 and Web3 domains. These types of clash show no signs of abating, and proactivity by key stakeholders in this area is likely to remain of key importance.
References
[1] https://iotex.io/blog/iip-22-proposes-to-simplify-iotex-domain-names/
[5] https://en.wikipedia.org/wiki/Decentralized_autonomous_organization
[6] https://www.iamstobbs.com/opinion/trends-in-web3-part-1-a-look-at-blockchain-domains
[7] Smart contracts are self-executing programs stored on a blockchain, which can be configured to run when certain pre-defined conditions are met (e.g. when an agreement between parties is made); see e.g. https://www.ibm.com/topics/smart-contracts
[8] https://www.lightercapital.com/blog/what-does-io-mean-what-is-the-io-domain
[9] https://circleid.com/posts/20230117-the-highest-threat-tlds-part-2
[10] https://domainnamewire.com/2022/10/18/unstoppable-domains-kills-coin-in-the-name-of-wallet/
[11] https://www.licenseglobal.com/retail/amazon-wins-domain-dispute-sa-nations
[12] https://www.lexology.com/library/detail.aspx?g=85594134-7b40-436c-b5ac-a807d98d1b56
[13] https://www.cftc.gov/PressRoom/PressReleases/8715-23
[14] https://www.coindesk.com/policy/2023/06/09/cftc-wins-lawsuit-against-ooki-dao/
This article was first published on 16 October 2023 at:
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