Cryptoverse: Trading names in a mind-boggling crypto craze

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A new NFT trading craze where names are bought and sold for mind-boggling sums is providing a multi-billion dollar lifeline for speculators shivering in the bleak crypto winter.

“Domain” names like coin.crypto (which sold for $100,000) and beer.eth (which fetched $39,000) are a new generation of NFTs that owners can use to replace the jumble of 16 numbers and random letters that make up your digital wallet. addresses

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That might sound like a lot of money for the crypto equivalent of a personalized license plate, but backers say these names could become valuable real estate in the coming years with the arrival of Web3, a much-touted vision of a future Internet based on blockchain. .

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At the moment, the trading market for these alternative assets offers rich (and risky) options for some investors who are collecting popular domains with the aim of investing them for profit in the secondary market on NFT platforms such as OpenSea.

“We have domain names that start at $5, we’ve sold up to $100,000,” said Matthew Gould, CEO of Unstoppable Domains, which sells names ending in .crypto, .nft and .wallet on its website .

“Range is because there is a defined perceived value difference between different words and lengths.”

The company has seen some great deals lately: for example, wallet.crypto sold for $250,000 and earn.crypto went for $100,000, both in April.

Meanwhile, .eth names generated by the Ethereum Name Service (ENS), the largest vendor of domains, were the fourth most traded NFT type on OpenSea in September, with total volume up 75% since a month to the equivalent of $12.5 million. .

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ENS domain names were only surpassed by NFTs (non-fungible tokens) from well-known collections like CryptoPunks and Bored Ape Yacht Club. Trading in relatively new assets has grown at pace, even as crypto winter has hit the NFT market.

Monthly registrations of .eth domain names rose to more than 433,000 in September, the highest in 12 months and a 5,000% increase from a year ago, according to Dune Analytics.

Domain names that have the highest value tend to be those with simple, short English words, terms that refer to pop culture or Web3, and numerical sequences, experts say, such as crypto.nft or 000.eth.


However, crypto domains are still in their infancy. There is no guarantee that they, or Web3, will deliver on their promise, while the highly volatile nature of the cryptocurrency and NFT markets suggests dangers for the untrained trader.

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Questions also abound about the scalability of the technology and the potential for confusion as competing domain providers issue similar names, which could lead to the misdirection of funds, according to a report by Block Intelligence.

Sasha Fleyshman, a portfolio manager at investment firm Arca in Los Angeles, said domain names were likely to grow in popularity as crypto became more popular.

The 16-character alphanumeric addresses used for digital wallets “are not exactly user-friendly, especially for non-crypto natives,” he added.

In an indication of investor confidence that digital assets linked to .eth domain names will rise in value, the ENS project’s crypto token soared nearly 90% in the third quarter to $15.92, although it still it’s a far cry from the $40 it was trading at at the start of the year. Bitcoin ended the quarter mostly flat, struggling to stay above $20,000.

However, many market players warn that it is difficult to value a domain name, as it is a speculative bet on what might be asked for in the future.

That weakens the case for institutional investment, Fleyshman said.

“From a fund perspective, it’s quite difficult to make a fundamental investment in specific domain names,” he added. “It’s not our wheelhouse to say which domains will accumulate value and which won’t.”

(1 Ether = $1,330.20)

(Reporting by Medha Singh and Lisa Pauline Mattackal in Bangalore; Editing by Tom Wilson and Pravin Char)



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