Replica brands

Why Brands Pay Thousands for Crypto Domain Names

Brands such as Puma, Gucci, and Budweiser have already purchased at least one “.eth” name. Budweiser paid around $95,000 for “beer.eth”. A “.eth” extension means that the domain is applicable to the Ethereum blockchain and is sold by an organization called Ethereum Name Service (ENS).

While ENS names are the most popular suffix in Web3 – due to Ethereum being the most popular Web3 blockchain – different name services support domains for other blockchains. The Tezos Domains organization, for example, offers “.tez” extensions for the Tezos blockchain.

Mark Soares, marketing director at agency Blokhaus, which works directly with the Tezos ecosystem, suggested brands consider buying their names on a variety of blockchains to expand identity verification. Proving to users that you are who you say you are, and across a variety of ecosystems, is especially important when it comes to cross-wallet financial transactions.

But this is where things can get costly for brands.

Like most NFTs, crypto domains are available to anyone with a wallet and can be bought and resold on the secondary market, often for much more than the initial sale. “Axe.eth” is currently listed on OpenSea for over $120,000 and “adidas.eth” is around $18,500. Names on less popular blockchains will be much cheaper, but the costs can still add up if another owner maintains leverage in the trade.

Marketing Opportunities

The direct communication method in Web3 will likely exist between wallets, which means that addresses from those wallets will serve brands the same way email serves them in Web2, according to Troika’s Lester.

Like an email campaign, a brand can simply drop media or information – in the form of an NFT – into a consumer’s wallet, needing only to know their address to complete the send. But if the brand wants the consumer to interact with this medium, it must ensure that its own identity is clear and verifiable.

This makes the case for owning crypto domains. A consumer is much more likely to open an NFT from “puma.eth” than 0x4b26bdf… – an Ethereum address virtually indistinguishable from all other Ethereum addresses.

“There’s no better checked tick than ‘.eth,'” said Lester, who cited the widespread use of fake usernames on Twitter as something that could be prevented on Web3 platforms via cryptographic domains.