A marketing stunt that went horribly wrong?
Frank Schilling’s top-level domain company, UNR, auctioned off its 23 top-level domain names at the end of April, grossing over $ 40 million. To date, none of the TLDs have been transferred to successful bidders.
The delay is due to what appeared to be a marketing stunt to take advantage of the popularity of NFTs.
Prior to the sale, UNR created NFTs connected to the Ethereum name service for each of the top-level domains and said auction winners would also get an NFT. In a press release, he wrote:
As the exclusive operator of 25 ICANN-accredited domain extensions, including .LINK and .GAME, UNR owns the NFTs that control their namespaces in the Ethereum Names Service (“ENS”) on the Ethereum blockchain. UNR Top Level Domains are the first to be transformed into ERC-721 NFT on Ethereum.
23 of these top-level domains and their corresponding NFTs will be sold together in an unqualified public auction on April 28, 2021…
The winners of auctions of these rare internet assets not only collect subscription revenue by selling their domain names through ICANN accredited registrars, but could also sell domains on ENS directly to Ethereum owners.
In response to a request from a winning bidder to complete TLD transfers, ICANN says it is still awaiting responses from UNR. In a buyer’s reconsideration request for the .hiphop (which was sold outside of the auction), ICANN includes a note dated December 10 indicating that it continues to oppose and deny ICANN consent to all pending missions from UNR. He says he’s been trying to get additional information from UNR since May, but the answers are not complete:
From our first Request for Additional Information to UNR issued in May 2021, we sought to understand the impact of Domain Name System (“DNS”) transactions, including how non-fungible tokens ( NFT) were created on the Ethereum Name Service (ENS) were used and were involved in transactions. ICANN has repeatedly requested documentation or other information from the UNR relating to NFTs in the hope that the UNR would provide full and complete answers. It was only after repeated requests from ICANN for transaction and auction documentation that UNR began providing this documentation in October 2021 …
… As an example, it has not been clear how public statements such as “the winner of each TLD will receive the ownership rights to the top-level domain asset …[and.]… The NFT representing their TLD on the ENS ”so that they could“ control all TLD namespaces on the DNS and the ENS ”had to be assessed against incomplete allocation requests. As we communicated to UNR, these statements may not be consistent with important policies and agreements developed by the ICANN community which govern registry operations and which clearly state that a Registry Operator does not. would have no ownership or interest in a TLD. In addition, the creation of such NFTs and the potential operation of a suffix identical to the top level domains in the DNS in an alternate namespace may create risks to the security or stability of the TLDs in the DNS.
I suspect few, if any, bidders care about DTVs. But NTS and ENS connections prevent all transactions from completing. This is particularly problematic given that the year is ending, and I suspect that many applicants were hoping to receive their TLDs by the end of the year for tax and business purposes.
It will be interesting to see how long it takes to resolve this issue and whether TLD operators can get ICANN’s blessing by disavowing the NFT portion of transactions.
[Note: the original version of this story said that .hiphop was acquired in the auction. This TLD was actually sold outside of the auction.]
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