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Shakestats X blockdomains/ Auction #2
Market roundup and a preview of the event.
In just under four hours (7PM EST) the second Shakestats x blockdomains/ auction will take place, with an impressive set of top-level domains up for grabs. The auction comes at an interesting inflection point in the Handshake ecosystem. High-end secondary market sales have continued to occur at a semi-regular interval, with three of the top five high sales on Namebase occurring since the start of September (pow/, ✨/, and 😭/. During that same period, however, overall secondary sales on Namebase have been depressed at ~940,000 HNS per month, under half the average of the prior three months (1.98 million HNS). Adding credence to the theory that market participants increasingly view TLDs as a form of NFT, secondary market declines on Namebase during the past months have tracked a similar arc as OpenSea transaction volume (mainly, but not exclusively, comprised of secondary sales), though the slope of the OpenSea drop has not been as precipitous.
From the broader domaining ecosystem, ICANN’s recent advisory regarding blockchain domains could indicate the beginning of further attention from the legacy establishment. The recent airdrop associated with Ethereum Name Service has renewed focus on namespace blockchain projects. Although greater HNS awareness might not be imminent, seemingly constant technical developments and announcements from the community, such time might be closer than we realize.
As a refresher on the Shakestats X blockdomains/ auction history, the first auction, focusing exclusively on internationalized domain names, occurred in August and led to the completion of 82,500 HNS of domain transactions (six TLDs), with 23,980 HNS of the proceeds being donated to community organizations. 21 names are up for auction this time (with two being auctioned jointly), and the selection of domains includes both TLDs and well as IDNA-valid emoji and symbols, both singles and combinations.
Recent market activity among IDNs has remained thin since a new all-time high was established at the first auction, and the organizers are excited by the commercial relevance of multiple selected IDN domains. Single emoji demand persists, but a greater ask/bid divergence may be emerging; notably, the majority of emoji TLDs offered at auctions hosted by the Dweb Foundation and Flamingo Handshake failed to meet reserve.
Format changes compared to the first auction focused on the donation and reserve elements of the experience. Contrary to the first auction, sellers are not required to donate any proceeds to community organizations (though many have elected to do so); the organizers’ goal was to see more proceeds reach sellers, and we are offering two of our own domains with 100% of proceeds donated to help close any gap. Increasing the payout rate allowed many sellers to submit names with lower associated reserves. In fact, the majority of TLDs to be auctioned have either no reserve or a reserve below 1,000 HNS.
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DISCLAIMER AND DISCLOSURE
This commentary is not intended to be investment advice. Please consult appropriate investment, financial planning, legal and tax professionals prior to making any investment decisions. The author owns, has sold and acquired, and may sell and/or acquire in the future various Handshake TLDs, including IDN and emoji TLDs in addition to those disclosed in this post. All translations are believed to be accurate but have not been verified by a professional translator.