• Tech - News - Blockchain Technology
  • Updated: October 04, 2022

Cryptoverse: Name-Trading In Bizarre Crypto Frenzy

A multi-million dollar lifeline is being offered to speculators shivering in the cold crypto winter by a new NFT trading craze where names are bought and sold for outrageous prices.

Newer NFTs have "domain" names that owners can use in place of the 16 random letters and digits that make up their digital wallet addresses, such as beer.eth, which sold for $39,000, and coin.crypto, which sold for $100,000.

The price of the cryptocurrency equivalent of a personalised licence plate may seem high, but proponents claim that if Web3, the much-anticipated vision of the next-generation internet based on blockchain, takes hold, these names may turn into valuable real estate.

For some investors, the trading market for these alternative assets is currently rich - and risky - pickings.

These investors are buying popular domain names with the intention of selling them on NFT platforms like OpenSea for a profit.

"We have domain names starting at as little as $5, we've had some sell for as much as $100,000," said Matthew Gould, CEO of Unstoppable Domains, which sells names ending in .crypto, .nft and wallet on its website.

"The range is because there's a definite perceived value difference between different words and lengths."

Recently, the business has seen several big sales, as on wallet. cryptocurrency made $250,000 when sold. $100k was spent on cryptocurrency in April.

The largest domain registrar, Ethereum Name Service (ENS), also produces .eth names, which were the fourth-most traded NFT on OpenSea in September with total transactions up 75% from a month earlier and amounting to $12.5 million.

Only NFTs (non-fungible tokens) from well-known collections like CryptoPunks and Bored Ape Yacht Club topped the list of ENS domain names. Even while the NFT market has been severely impacted by the crypto winter, trading in relatively young assets has rapidly increased.

According to Dune Analytics, the number of.eth domain name registrations per month increased to over 433,000 in September, the greatest number in the previous 12 months and a 5,000% increase over the previous year.

According to experts, domain names with simple and short English words, concepts reflecting pop culture or Web3, and numerical sequences, such as crypto.nft or 000.eth, frequently have the highest value.



However, crypto domains are still in their early stages. Given the very volatile nature of cryptocurrencies and NFT markets, there is no assurance that they or Web3 will fulfil their commitment.

Untrained traders may also face risks due to these markets' high volatility.

According to research by Block Intelligence, concerns abound about the technology's scalability and the possibility of confusion caused by identical names used by competing domain providers, which could result in the misallocation of cash.

As cryptocurrency grew more widely accepted, Sasha Fleyshman, portfolio manager of the Los Angeles-based investment firm Arca, predicted that domain names would gain popularity.

He continued, "Especially for non-crypto native users, the 16-character alphanumeric addresses used for digital wallets are not exactly user friendly."

The ENS project's cryptocurrency token increased over 90% in the third quarter to $15.92, but it is still a long way from the $40 it was trading at the beginning of the year.

This is an indication of some investor optimism that digital assets connected to .eth domain names will increase in value.

Almost flat at the close of the quarter, Bitcoin struggled to hold onto its $20k mark.

However, many market participants caution that it can be challenging to value a domain name because doing so amounts to taking a chance on future demand.

According to Fleyshman, this undermines the case for institutional investment.

"From a fund perspective, it's rather hard to make a fundamental investment into specific domain names," he added.

"It's just not our wheelhouse to say which domains are going to accrue value and which ones are not."

(1 ether = $1,330.20)

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Lawrence Agbo
Lawrence Agbo

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