Empowering Digital Identity Through Domains

Proposal to Revolutionize the Domain Trading Market through Centralized Appraisals and AI-driven Pricing

Over the past two years, our team has deeply immersed itself in the realms of blockchain, cryptocurrency, and web domain acquisition. We firmly believe that the domain trading market, which is still in its infancy, is ripe for disruption. Major players like GoDaddy, Sedo, and Afternic currently dominate domain sales, brokerage, and appraisals, but the market remains inefficient and underdeveloped.

The Problem: An Underdeveloped Market

The core issue with the domain trading market is that it does not function as a true, efficient market. Domain values are often determined by appraisers who lack transparency in their pricing methodologies and are not incentivized to grow the market. Current appraisal systems, particularly those used by dominant players like GoDaddy, consistently undervalue domains, leading to a market that underperforms relative to its potential.

In 2023, over 1.2 billion domain names were registered worldwide, with .com accounting for nearly 53% of all registrations​ (DomainsMesh). Despite this massive volume, the domain trading market lacks the liquidity and transparency seen in other digital asset markets. This stagnation is particularly concerning as Web3 adoption accelerates globally, with blockchain technology becoming increasingly integrated into digital infrastructures.

The Opportunity: Building a True Marketplace

The domain market shares similarities with other collectible markets, such as baseball cards, pink sheet stocks, fantasy football, and Pokémon, which have successfully transitioned into mainstream markets. Web3 and blockchain adoption in developed countries is expected to grow at a compound annual growth rate (CAGR) of over 44% from 2022 to 2030​ (DomainsMesh). As blockchain technology matures, the demand for secure and unique digital identities—represented by domains—will only increase.

The absence of a principal market with active buyers and sellers has allowed a monopoly of uninformed registrars to control pricing. This has stunted the growth of the domain market, preventing it from evolving into a robust marketplace that could capitalize on the expanding digital economy.

The Solution: AI-Driven Centralized Pricing Tool

Our proposal aims to create a centralized domain appraisal and pricing tool that will enhance the accuracy of domain valuations and stimulate market growth. By utilizing artificial intelligence (AI), we can aggregate data from existing appraisal tools and services, creating a weighted average value that more accurately reflects true market conditions.

Our research indicates that over half of the domains currently on the market are mispriced, with high-value domains ($5,000 and above) consistently undervalued by thousands of dollars. By increasing the accuracy of domain appraisals, we can elevate overall market prices, driving growth and encouraging more active participation from both buyers and sellers.

Strategic Partnership with Domain Appraisers

We propose to approach all major domain appraisal providers and seek partnerships that allow us to utilize their API data. In return, these partners would receive a percentage of the revenue generated from subscriptions to our service. The revenue-sharing model would be tiered, with the largest appraisers receiving 10% of revenues, scaling down to 2% for smaller partners.

This strategy is designed to build momentum, increasing market perception of fair and accurate pricing. As more appraisers join, the tool will become more powerful, and the market will begin to correct itself, reflecting more accurate domain values.

Leveraging Web3 and Blockchain for Market Growth

The rise of Web3 and blockchain technologies offers a unique opportunity to revolutionize the domain market. As digital identities become more critical in the decentralized web, the value of domains, especially those tied to blockchain projects, is poised to increase. In 2023, blockchain adoption in developed countries surged, with more than 80% of Fortune 100 companies exploring blockchain use cases​ (DomainsMesh). This trend underscores the growing importance of digital assets like domain names.

By aligning our platform with these emerging technologies, we can position domain trading as a key component of the digital economy, driving further adoption and market growth.

Market Potential and Scalability

The domain market is expected to grow significantly as the internet continues to expand, with projections estimating a 7% CAGR in the domain registration market through 2028​ (DomainsMesh). The global market for digital assets, including domains, is estimated to exceed $1 trillion by 2030, driven by the proliferation of Web3, blockchain technology, and increased online presence across industries.

Our platform's scalability is bolstered by its AI-driven approach, which can continuously adapt to market conditions, incorporating new data and refining valuations. This creates a self-improving system that increases in accuracy and value as more users and data are integrated. The potential for expansion into related services, such as domain brokerage, escrow services, and market-making, provides additional revenue streams and growth opportunities.

Long-Term Vision

While the immediate goal is to enhance pricing and appraisal structures in the existing market, our long-term ambition is to create a viable and robust domain trading market. By developing more sophisticated AI models, we envision a future where our platform not only provides accurate valuations but also facilitates market making, transforming domain trading into a thriving digital marketplace.

Conclusion

We have already acquired the domains domainprice.ai and domainpricingtool.com, which will serve as the foundation for our centralized pricing tool. As digital assets and real estate prices continue to rise, it is crucial that domain prices reflect their true value. By addressing the inefficiencies in current appraisal systems, we can unlock the potential of the domain trading market and drive it toward a more prosperous future.

With the combination of our innovative approach, the accelerating adoption of Web3 and blockchain technologies, and the vast market potential, this initiative represents a unique opportunity for venture capital investors to participate in the transformation of the domain trading market.