Web3 in 2022: Failure, infighting, and an expired domain key.

Big news this year was the rise and fall of web3 and an increase in interest in so-called web3 domain names.

We all know the story on the cryptocurrency front: values ​​have surged this year and interest in NFTs has skyrocketed. Then everything collapsed.

This affected the domain industry and domain investors. Many buyers used cryptocurrency “fun money” to finance domain purchases. And many domain investors got sucked into NFT trading.

The other interesting side of web3 this year directly involved domain names.

Companies launching blockchain-based domains have been around for years, but they started making waves this year. One of the reasons was the rise of NFTs and many NFT fans decided to accumulate names on the Ethereum Naming Service that end in .eth.

Another reason these domains caught our attention was disputes between competing web3 domain initiatives.

This came to a head when Unstoppable Domains, a VC-backed web3 domain company, filed a lawsuit over the .wallet. He’s frustrated that there’s a .wallet domain on Handshake, a competing system that allows anyone to create a top-level domain.

The lawsuit resulted in Gateway, a sort of record player/recorder for Handshake, shutting down abruptly. People who registered second-level domains through the Gateway were no longer able to use them.

This irritated fans of the handshake. Namecheap, which sells Handshake domains and owns Handshake technology provider Namebase, decided to fund a legal battle on behalf of the owner of the .wallet in Handshake.

During NamesCon in September, Handshake supporters publicly battled one of the founders of Unstoppable Domains onstage.

Unstoppable Domains believes that the first entity to publicly market an alt-root top-level domain should obtain the exclusive rights. He even went so far as to destroy one of his own domains, .coin, to prove his point. This was an amazing decision on many fronts, especially since it showed that unstoppable second-level domain registrations are hardly unstoppable. .Coin owners are left with inoperable domains after Unstoppable disabled resolver services for the domain.

While sponsors of the web3 domain initiative bicker among themselves, “real” domain owners should take note. It’s clear that Unstoppable has its sights set on the next round of ICANN-approved TLDs, and probably doesn’t want to pay the full fee for them. He formed the Web3 Domain Alliance to advocate for trademark protection for top-level domains.

There was one more interesting connection between web3 and domain names this year.

The eth.link domain has expired and was auctioned on Dynadot for $852,000. This domain was important to the Ethereum Name Service community because its registrant set it up as a resolution service for .eth domains. You can write a .eth domain at the third level, and it will resolve to the website without using a browser plugin.

But the guy who registered the domain was in prison for helping North Korea learn how to evade cryptocurrency sanctions, so he couldn’t renew the domain.

It later partnered with the Ethereum Name Service to sue GoDaddy (the parent company of Uniregistry, where the domain was registered), Dynadot, and the entity that bought the domain at auction. A judge issued a temporary order returning the domain to him, and the lawsuit continues.