Blockchain and Web3 frequently make the news these days — whether it’s new blockchains coming into fruition, cryptocurrency becoming more common in today’s economic systems, or the tokenization of real-world assets (creating a digital representation of an asset on the blockchain).
With so many efforts toward making blockchain technology more commonplace in society, let’s compare the blockchain and Web3 industry to the domain industry; we’ll look at what similarities exist, where the differences are, and what developments could be made in 2025 and beyond.
For simplicity’s sake, I’ll refer to identifiers in both the traditional Domain Name System and Web3 as domain names in this piece. While Web3 domains have multiple naming conventions — blockchain names, digital or web identifiers, NFT domains, etc. — their behavior can approximate a traditional domain in many ways, so I’ll use that moniker to help highlight their similarities in this post.
A Brief History of Web2 and Web3 Domains
Let’s quickly review a history lesson to update us on the current state of Web3.
In 2014, Gavin Wood, an Ethereum co-founder, coined the term ‘Web3’ to represent the concept of a decentralized internet built on token-based economies that give users greater control over their data while also creating systems that allow individuals to have more freedom of how they interact online without having their information and data stored in central servers.
Web3 Functionality and Need for a Naming System
With the creation of Web3 came the need for a naming system on which this new idea for an internet could operate; however, there was a problem facing this need: multiple blockchains using different naming systems due to the decentralization at the heart of Web3.
To better understand that issue, let’s look at how the more traditional ‘Web2’ functions. The Domain Name System (DNS) operates as a centralized root primarily overseen by the Internet Corporation for Assigned Names and Numbers (ICANN). ICANN is responsible for the security, stability, and resilience of the ‘Web2’ system’s infrastructure.
In contrast, blockchains operate various separate naming systems with differing levels of regulation and control via different Decentralized Autonomous Organizations (DAOs). This setup makes it hard for the wider user community to understand and navigate using Web3 names. It also presents a lack of rights protection mechanisms (RPMs) to help brand holders defend and maintain their rights over their trademark or brand names in the Web3 space.
Web3 and Rights Protection Mechanisms (RPMs)
A great example of a lack of RPMs in action occurred when .eth launched in 2017. At the time, many trademarked brand names were registered by a third party or ‘bad actor’ because no rights protection methods were in place to protect brand holders. A lack of RPMs also creates confusion for the end user — consider their experience when navigating Web3 to interact with a specific brand, yet they can’t verify the brand actually owns the Web3 domain.
How Web2 and Web3 Domains Are Utilized
Now that we have briefly discussed regulations and infrastructures, let’s examine how domains are utilized in Web2 and Web3.
Domain names were first registered in 1985, serving as memorable text-based labels to replace complex numerical IP addresses. In the traditional Web2, or DNS, domains are actively registered and utilized for websites, redirects, apps, and more. There are also defensive registrations, domains registered by brand owners to ensure they’ve protected their trademark or brand name in a certain namespace.
In Web3, domains were initially created as wallet address shorteners. Rather than having an address that looks something like ‘0xf7005e56457E6E9DE690cbD9F4F68b50804Ddc91,’ a user could replace this long cryptographic hash with something simple and human-readable, like ‘domainshane.crypto. Sound similar to domain names and IP addresses? It should. Web3 naming systems were developed in that space to help act as identifiers. That said, the functioning and provisioning of domain names in Web3 are vastly different from traditional DNS domains.
It is hard to pinpoint an exact figure of how many domains in Web3 host content, but it is a small figure compared to the traditional DNS domains. Domain names in Web3 are primarily used as identifiers for cyrpto wallet addresses or as a digital asset, similar to a Non-fungible token (NFT), that can be bought and sold through various platforms.
Web2 and Web3 Domains: Moving Toward the Possibility of a Hybrid Coexistence
Web3 has existed for over eleven years now, and we’re at a stage where the possibility of a hybrid coexistence between the Domain Name System (DNS) and Web3 is starting to show initial promise.
This innovation is occurring within some generic top-level domains or new gTLDs. Some are experimenting with replicating their top-level domain on various blockchains, like .xyz and .art — TLD examples that show how these two ecosystems can work together. Upon registration, other new gTLDs, like .locker and .box, will launch with exact-matching domain names on blockchains. When a registrant registers a Web2 version of a domain, they will be allocated an exact-matching Web3 version of that name on the blockchain.
Web3 and ICANN’s New gTLD Program: Next Round
With the announcement of the Next Round of New gTLD applications expected in 2026, two Web3 naming organizations have announced their plans to apply for new gTLDs in the Next Round. Unstoppable Domains and D3, Inc. have announced multiple applications for the Next Round. If successful, they plan to launch both a Web2 and Web3 version of their top-level domains in an effort to bridge the gap between the DNS and Web3.
At D3’s annual Dominion conference in sunny Las Vegas, Nevada, it was announced that D3 will launch its own blockchain, Doma Protocol, to bridge the traditional Web2 and Web3 blockchain names services by tokenizing both existing and future domains.
Web2 and Web3 Domains: Opportunities for Brand Holders
This hybrid coexistence of Web2 and Web3 could present a favorable situation for brand holders. If ICANN approves Web3 organizations’ applications and they launch these new gTLDs with mirrored or exact matching domains on the blockchain, it gives brand holders the ability to protect their brand or trademark not only in the traditional Web2 space but also in Web3. Web3 can be a difficult place to ensure brand protection without having the defined rights protection mechanisms that exist in Web2, and this idea of exact matching domains is a step in the right direction. Brand holders can now get double coverage of their brand in both ecosystems, helping to alleviate some of the challenges that exist in Web3 for brand holders. Consideration must be given to the existing rights protection mechanisms in place in Web2 — such as UDRP and URS and trademark rights during Sunrise, a period during a new gTLD launch in which brand holders have first rights to register their domain name matching their trademark that is validated with the TMCH — and how they can be established and supported in the new emerging ecosystem of coexistence. The problems that occur by not heeding past mistakes could cause the metaphorical bridge between the DNS and Web3 to collapse. As we all know, a proper bridge requires effective girders in place and the support beam to carry the weight of the traffic, and without the proper rights protection mechanisms in place in Web3 to serve as the girders, the bridge could collapse.
Interested in learning more about Web3 domains? Contact Markmonitor today.
