Blockchain Web3 Domain Names: A New Frontier in NFT Trademark Protection


Blockchain domains, much like their predecessors 15 years ago, are in the early stages of market development.

Blockchain domains, much like their predecessors 15 years ago, are in the early stages of market development, where new players are taking advantage of this unique technology. While some brands are rushing to explore this new frontier, others are still evaluating the space. Here we’ll look at what are the new risks and opportunities since the rise of web3 domains, and how can brands protect their online presence? Not so long ago, it seems, there was a race for brands to register .com domains. The same can be said recently about blockchain domain name registrations. As we move towards the blockchain (web3) domain system, this should be differentiated from the web2 domain naming system (DNS). DNS has allowed centralized systems, such as social media and e-commerce to thrive, including facebook.com or amazon.com. Web3 signifies a reliance on a decentralized public ledger system, or blockchain, enabling smooth and transparent processes with fast processing times. As such, blockchain domains operate on a specific blockchain through a “registrar”. For example, mcdonaldsofficial.eth found on the Opensea NFT Marketplace has been registered with the Ethereum Name Service, a registrar that allows blockchain domains (.eth) to operate on the Ethereum blockchain.

The Blockchain Domain Name System (BDNS), much like DNS, translates a unique address into a memorable phrase. In the case of DNS, this would translate a single IP address into a domain name, such as twitter.com. While for blockchain domain names, it is a matter of translating a unique digital wallet (0x9b8c19500a8631c1f755bb365bDE398384E4f2Fa) into a memorable address, for example minecraft.eth. However, unlike DNS, blockchain domains have taken domains to another frontier when it comes to its functionality.

What’s New in Blockchain Domain Names?

  1. First, blockchain domains are attractive to registrants because there are no established international regulations.
  2. Second, web3 domain names are a type of NFT because it is a verified digital asset on a blockchain with a certificate of ownership, which can be traded on NFT markets.
  3. Third, blockchain domain names are widely used in the community. It can be used as a display name for social media, for example PUMA uses PUMA.eth on Twitter, as a digital portfolio or more traditionally as a landing page.

This fascinating multi-use made possible by blockchain technology truly expands many new possibilities for brands to interact with their customers.

Although we see that some platforms take steps to ensure that blockchain domain names are registered legitimately, such as Handshake (a blockchain domain registrar) which has reserved brand names for brands, organizations and famous people , we are seeing a high level of bad faith registration for blockchain domain names. A well-known example is cybersquatting. Bad actors without the consent of the brand owners register a blockchain domain name and wait for the brand owner to approach them. The goal being to sell the blockchain domain names for a lucrative sum of money, like appleinc.eth listed on NFT Marketplace, OpenSea for around $600,000.

Web3 domains pose a risk to brand image because customers can be misled into impersonating third parties. Since blockchain domain names have the ability to be used as display names, it’s not hard to imagine that users with a display name, such as “BrandXOfficial.eth”, could mislead other users that they are the official representative of a brand. By establishing social media connections, scammers can begin phishing or other data mining techniques to gain access to their victims’ NFTs and cryptocurrencies, as was the most recent case of Seth Green who lost 4 Bored Apes NFTs (an infamous collectible NFT).

While web3 domains offer brands unique ways to interact with customers, this new technology poses threats to brand image, including cybersquatting and identity theft.

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