I’ve previously suggested a harberger-tax based scheme, where the 2LD could change hands, but subdomains would be protected via the name wrapper. I think, though, that something slightly more ‘bespoke’ and similar in spirit to ICANN’s TLD release process might work better, along these lines:
- Allow applications for 1- and 2- character .eth names, using a well established submission process. Submissions are available to view publicly.
- Put a working group in charge of approving or rejecting applications.
- New names are issued periodically - perhaps quarterly.
- If there are multiple approved applications for the same name in the same period, conduct an auction amongst the successful applicants to determine who gets it.
- Winning applications should have a lengthy registration period - at least 5 years. When a registration expires there should be a presumption that the current registrant will be able to renew it absent some major issue, and if a new registrant wishes to take over they will need to demonstrate a commitment to preventing damage to existing users of the name.
Winning proposals would likely mostly involve delegating a 1- or 2- character name via CCIP read to an L2; for instance op.eth could be registered and used to issue names directly on optimism.