Why brands are paying thousands for crypto domain names

Why brands are paying thousands for crypto domain names

Brands such as Puma, Gucci and Budweiser have already purchased at least one “.eth” name. Budweiser paid around $95,000 for “beer.eth.” An “.eth” extension means the domain is applicable to the Ethereum blockchain, and is sold by an organization called Ethereum Name Service (ENS).

While ENS names are the hottest suffix in Web3—as a result of Ethereum being the most popular Web3 blockchain—different name services support domains for other blockchains. The organization Tezos Domains, for example, offers “.tez” extensions for the Tezos blockchain.

Mark Soares, chief marketing officer of agency Blokhaus, which works directly with the Tezos ecosystem, suggested brands consider buying their names across a variety of blockchains in order to expand the verification of their identity. Proving to users you are who you say you are, and across a variety of ecosystems, is especially important when dealing with financial transactions between wallets.

But this is where things can get costly for brands.

Like most NFTs, crypto domains are available to anyone with a wallet and can be bought and resold on the secondary marketplace, often for much more than the initial sale. “Ax.eth” is currently listed on OpenSea for over $120,000, and “adidas.eth” is around $18,500. Names on less popular blockchains will be far less pricey, yet the costs can still add up if another owner maintains the leverage in negotiation.

Marketing opportunities

The method of direct communication in Web3 will likely exist between wallets, which means the addresses of those wallets will serve brands in much the same way as emails serve them in Web2, according to Troika’s Lester.

Like an email campaign, a brand can simply drop a piece of media or information—in the form of an NFT—into a consumer’s wallet, needing only knowledge of their address to complete the send. But if the brand wants the consumer to engage with that media, they must ensure their own identity is clear and verifiable.

This makes the case for owning crypto domains. A consumer is much more likely to open an NFT from “puma.eth” than 0x4b26bdf…—an Ethereum address virtually indistinguishable from all other Ethereum addresses.

“There’s no better verified checkmark than “.eth,” said Lester, who cited the rampant use of fake usernames on Twitter as something that could be prevented in Web3 platforms via crypto domains.