What's in a name? Unique crypto domain names become NFTs, sell for thousands of dollars

A new NFT trading craze where names are bought and sold for eye-popping sums is providing a multi-million-dollar lifeline for speculators shivering in the bleak crypto winter.

"Domain" names such as coin.crypto (which has sold for $100,000) and beer.eth (which fetched $39,000) are a new breed of NFTs that owners can use to replace the jumble of 16 random numbers and letters that form their digital wallet addresses.

It might seem a lot of money for the crypto equivalent of a custom car plate, yet backers say these names could become valuable real estate in the years to come with the advent of Web3, a much-hyped vision of a future internet built on blockchain.

Right now, the trading market for these alternative assets is providing rich — albeit risky — pickings for some investors, who are scooping up buzzy domains with the aim of flipping them for a profit in the secondary market on NFT platforms like OpenSea.

"We have domain names starting at as little as $5; we've had some sell for as much as $100,000," said Matthew Gould, CEO Unstoppable Domains, which sells names ending in .crypto, .nft, and .wallet on its website.

"The range is because there's a definite perceived value difference between different words and lengths."

The company has seen some bumper deals of late: for example, wallet.crypto sold for $250,000, while earn.crypto went for $100,000, both in April.

Meanwhile the .eth names generated by the Ethereum Name Service (ENS) — the biggest domain seller — were the fourth-most traded type of NFT on OpenSea in September, with total volumes rising 75 per cent from a month ago to the equivalent of $12.5 million.

ENS domain names were topped by only NFTs (non-fungible tokens) from well-known collections such as CryptoPunks and Bored Ape Yacht Club. Trading in the comparatively new assets has grown apace, even as the crypto winter has battered the NFT market.

Monthly registrations for .eth domain names jumped to over 433,000 in September — the highest in the past 12 months, and a 5,000 per cent surge from a year ago, according to Dune Analytics.

The domain names which command the highest value are often those with simple and short English words, terms referencing pop culture or Web3, and number sequences, according to experts, such as crypto.nft or 000.eth.

What's a name worth?

Crypto domains are still in their infancy, though. There is no guarantee that they, or Web3, will live up to their promise, while the highly volatile nature of cryptocurrency and NFT markets suggest perils for the unschooled trader.

Questions also abound on the scalability of the technology, and the potential for confusion as competing domain providers issue similar names, potentially leading to the misrouting of funds, a report by Block Intelligence said.

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"It's just not our wheelhouse to say which domains are going to accrue value and which ones are not."