Web3 – the general name given to the newest generation of decentralised Internet technologies (following on from the earlier phases of a landscape dominated by read-only, and then by user-generated, content) – continues to see new developments, in part pushed by growth in AI technologies driving a greater demand for privacy and non-restriction on content[1].

One key area is the realm of blockchain domains, Web3 domain names operating on the same underlying technology as cryptocurrencies such as Bitcoin. These domain names can be utilised for a number of purposes, including the construction of decentralised (peer-to-peer) websites, and wallet addresses for sending and receiving cryptocurrency.

In a new study, David Barnett, Rebecca Newman and Tom Ambridge update earlier work looking at a set of 1.47 million (.eth) domains on the Ethereum blockchain (comprising a year’s worth of registrations, and around one half of the total on this particular blockchain) to identify additional trends and patterns in the dataset, and indicators of brand infringements.

Amongst the main findings are the facts that:

• Well-known trusted brands are heavily subject to infringement, in the form of blockchain domain names containing the name of the brand in question, or ‘fuzzy matches’, where one or more character is replaced by an alternative character which may appear visibly extremely similar, thereby presenting the potential for a highly deceptive lookalike name.
  
  
• A new trend in blockchain domain name use appears to be emerging, in the form of instances where the domain name itself (which can incorporate a wide range of special characters) comprises an artwork – similar to an NFT – when the characters in the domain name are displayed in a suitable grid.

In response to these observations, brand owners are advised that:

• It is crucial to be aware of developments in the new arenas of Web3, including blockchain domains and NFTs. Large numbers of short blockchain domain names are already taken, in addition to a wide range of others which may be infringing brand names. This highlights the requirement for brand owners to be early adopters for securing blockchain domain names of which they may wish to make use, and for monitoring activity on domains which are already taken.
  
  
• The above risks may be further augmented by the emergence of a new trend in ‘collectible’ domain names, perhaps representing an evolution in the pre-existing ecosystem of domain ‘clubs’. A related risk may turn out to be the emergence of blockchain domain names incorporating branded IP (imagery or logos) within the domain name itself. The identification of this type of infringement may require the development of new (potentially AI-based) image-recognition technologies.
  
  
• Within the blockchain domain landscape more generally, new trends and risks might include:

1. The possibility of naming collisions (arising from the same domain extension being used across multiple blockchains, or in both Web3 and Web2 (i.e. ‘classic’ domain name) contexts[2].
   
   
2. Disputes over control of new extensions – both this and point (i) are likely to be exacerbated by the launches of new providers, and of new extensions as part of the new-gTLD programme[3]. Brand owners wishing to apply for dot-brand extensions may need to be particularly mindful of these issues.
   
   
3. Name wrapping, or the emergence of providers offering tradeable sub-domains of blockchain domain names.
   
   
4. Decentralised Autonomous Organisations, entities managed via blockchain-based programs for tracking of business functions.

These last two points are discussed in more detail in reference [2].

The full version of the study can be downloaded here.

[1] https://www.iamstobbs.com/opinion/trends-in-web3-part-1-a-look-at-blockchain-domains

[2] https://www.iamstobbs.com/opinion/the-iotex-case-domain-naming-collisions-and-other-emerging-risks-in-the-blockchain-ecosystem

[3] https://www.iamstobbs.com/opinion/the-new-new-gtlds