The notion of a domain appraisal has been brought up on this discussion board more than a few times.
On one hand, we have the “conservative” opinion that ENS names are not meant to be invested in for profit, and for every domain name there is one seller and one buyer, hence prices must be established exclusively by who buys and who sells. This relationship is what matters.’
On the other hand, we have an ever growing community that heavily relies on secondary markets and reselling. Some of them, we can even say, have invested their livelihood in ENS domain names. To quote some of the other opinions from existing discussions: “an ecosystem that includes all constituents,” including resellers. “This is not to cater to resellers, but that resellers are a significant and critical component of the domain name protocol industry.”
There are also those who call for a party outside of the buyer and seller to provide a price estimate, the value of this unique asset, if we may call an item which has such a vast utility simply an asset. Because it is more than an asset, it is meant to be an identity across a vast new virtual world, a unique form of identification that serves as a digital passport and wallet combined. Something you can keep and even include in your will one day.
I believe that all of us involved in the pursuit of Web 3 and all of us that foretell ENS to be the spearhead of the changes that we will come to witness, truly and sincerely want what is best for the community. That is why I want to bring forth the question of .eth domain appraisals.
We live in a world where even abstract human creations like art have appraisements. Although human appraisals, the process they utilize is to analyze a piece of art using a wide assortment of resources, such as books, photographs, and samples of other artwork, in order to determine the value of the piece. Art appraisers most often find work at auctions, art galleries, or insurance companies.
Bare with me now-we also live in a world where we have actually taught complex algorithms to create digital art, which is fascinating. Who is to say that in time, if we manage to (or already have) improved machine learning to the point of achieving true A.I., we could not feed all that information, the collective history of art and its value to human beings, to an algorithm-it would not adequately appraise human art as well.
Of course, there is always the possibility that someone, somewhere is willing to pay a lot more for their own reasons—yet this applies to every single asset that has ever existed. What appraisals serve is to determine an unbiased baseline price, so that bargaining can begin-much like in any other auction.
To bring this subject home, we have ENS community members going to websites like GoDaddy and Estibot to get grossly inaccurate appraisals for their domain names. Should we just wait for these centralized entities to wake up one day and decide they want a slice of the pie, much like Coinbase is attempting? Or should we look to human history for inspiration, where everything from art to real estate to Web 2 domain names can be appraised, and create our own algorithm — one that actually works, evolves, adapts, and receives direct feedback from our collectors and community leaders?
We use a complex algorithm that categorizes each appraisal and factors in the current floor price for the domain input, the average price of listings within the secondary markets, the last sale price of this or similar domain names, and the corresponding com versions as well. Still, given that hype naturally distorts valuations, we also look into expired domain names and how much they are bought for during the Dutch auction, after the grace period, as that gives a realistic price at which domains are picked up after someone is not able to use or sell them. We are also constantly improving and adding to the machine learning responsible for the appraisals, so the more the tool is used, the better it gets.
Yes, it will be a lot harder than appraising a .com domain. We need to factor in many, many variables. Some of which can not even be measured—how do you measure which gamer will want that specific username for himself and is willing to pay millions? You simply cannot. In the same way, you can not measure the value of someone’s dream house or the jewel he or she wants to purchase for their spouse. What we can do is provide a baseline, depending on what we already know.
Nothing is impossible. It is a challenge, and trust me, it will happen on its own, whether we think it’s good, bad, or ugly. My call to all of you is to create a tool that can benefit the entire community, leading to a more stable and safe space for all of us.
We have already started the process and have launched our ENS domain appraisal tool. Version 1 might have flaws, but v2 will be better, and the more it is used, the more the community gets involved, and the more feedback and resources we have to improve it, the better it will serve all of us.
Thank you!
Website: https://www.enskit.com/
Twitter: https://twitter.com/ens_kit