If I paid to register a 4-letter .eth name today for 1 year’s worth of time and then turned around and sent it to my friend, how much would the name be worth to him? Most people will rush in to debate the market value of it. They’ll say that if someone would pay $1,000 then it’s worth $1,000 and if nobody would pay anything for it at all then it’s worth $0 and call it a day.
But $0 hardly seems accurate when it cost $160 to register that name for 365 days to begin with. The recipient of the name, whether anyone wants to buy it or not, has $160 in value to use. As each day passes that value will go down until it expires and reaches $0. One might say it depreciates over time.
It’s the using of the name that generates conflict because most appraisers are not sure how to monetize a name beyond selling it so it becomes a game of hypothetical value based upon hypothetical future utility from a hypothetical builder who might know how to do something with it in the future. It’s fully decentralized in web3, they’ll say, hoping that’ll just close the deal for a potential buyer.
For those who say they are "building" on their .eth, what are you building? Is it generating revenue? Is the .eth name critical to it being executed or is it just something you have as a marketing gimmick to attract the web3 crowd? Genuinely curious.
— Seán Murray | sean3.eth (@financeguy74) July 22, 2023
The problem with this mindset is that monetization can already be done right now. decashed.eth cost $5/year to use, which means that all I need to do is make more than $5/year with it to come out on top.
Well, what if someone paid $100/year to advertise with decashed.eth. How would that work?
It would mean that their ad shows up on:
- decashed.eth.loan
- decashed.eth.photos
- decashed.eth.limo
- decashed.eth.xyz
- profile.coinbase.com/decashed.eth
- all current and future decashed.eth web properties
decashed.eth could airdrop the ad or paint the tape on etherscan.
These are just a few basic and very feasible ideas just from advertising. And as long as this is possible, then having a name that nobody wants to buy does not mean that it does not have a book value. On eth.loan, I have now added a little feature that states how much equity a name has. It’s determined by days remaining until expiration multiplied by the registration cost of that name per day.
- Names longer than 4 characters: 1.369863 cents per day (based upon $5/year)
- Names that are 4 characters: 43.835616438 cents per day (based upon $160/year)
- Names that are 3 characters: 175.342465753 cents per day (based upon $640/year)
3531.eth as of this moment has $109 in equity while dwr.eth has $2,446 in equity. If those names were sent to you tomorrow, that would be the registration time value remaining on the names irrespective of any market valuation. The time value is a value not only because it was prepaid but because in a world where the owner knows how to actually use their digital asset, they should be able to make money off it.