Is a second wave of NFT hype on the way?
Investors and speculators are eying up NFT domain names such as those provided by ENS and Unstoppable Domains as potentially lucrative NFT investments. In what could signal a second wave of interest in NFTs, speculators have for some time now been bagging what they believe will be in-demand domains. Big brands such as Visa and Budweiser have already jumped in.
Ethereum Name Service or ENS for short enables users to create simply readable domain names instead of the long-winded series of digits and numbers given as standard blockchain wallet addresses. Additionally, although it’s called Ethereum Name Service it works with most blockchains in existence and the team has worked hard since 2017 to push out the service to as many blockchain wallets and apps. For example, web3 wallets such as Metamask and Coinbase support ENS, DappRadar also allows site registration and token swaps using ENS domains. No more copying and pasting long addresses.
Moreover, users can use an ENS name to store all of their addresses and receive any cryptocurrency, token, or NFT. For example, one of my blockchain wallet addresses is: 0x7A11d1FD70ae383Fb75616C7Ba3D2eF5439AaE13
It’s the one I use to send and receive payments from friends etc. So I regularly have to provide the wallet address to other people. Obviously, memorizing that would be pretty tuff. ENS allows me to create a new address such as Kane.eth, for example. Which is obviously a lot easier to remember. I can then create subdomains for my other family members free of charge. Moreover, that name will cost me a yearly fee of $5.99, if it’s available. Plus a one-off gas fee to mint the ERC-721 NFT token that represents my domain name.
Speculating on NFTs
People are speculating. As happened with web addresses in the ’90s. Snapping up potentially lucrative domain names, which they authentically own through an NFT. In the hope that a big company with deep pockets would come knocking later. As mentioned, proactive companies are grabbing their names early to avoid this debacle at a later date.
There are two reasons I ran a search for some of these more well-known names. Firstly, I wanted to see if they were taken. As you can see they all are. Secondly, I wanted to poke around inside the wallets of the users responsible for registering them using the DappRadar Portfolio Tracker. In the hope of potentially finding somebody speculating on names. I hit the jackpot pretty fast in this instance. Once again proving how useful the Portfolio Tracker is, not just to track your own wallet holdings.
The wallet address responsible for registering the Tesla.eth name has 183 NFTs in their wallet. 123 from ENS and 60 from Unstoppable Domains. Amongst the names we see oneamazon.crypto, blockchaintoys.crypto, wendys.eth, electronicbikes.crypto and huwai.eth. To this simple observer, it appears the holder is speculating and has purchased a bunch of names they believe will be in demand at some point in the future.
More interesting perhaps is from the NFT domains I took a closer look at, no offers had been made. Still, ENS is not a widespread thing just yet. With only 343k names registered by 121k owners, they still have a way to go toward mass adoption. But, if crypto payments move in the direction we believe they will, ENS could become a core component in the new crypto economy. ENS NFTs could potentially become a new form of the gold rush as big brands try to lock down their IPs.
DNS Integration to ENS is live
A major milestone since inception has been DNS namespace integration for ENS on Ethereum mainnet. In human language, this enables the owner of a regular domain name (yourwebsite.com) to import the domain name for use on ENS. For example, if you own “example.com” on DNS, you can import it into ENS — as example.com, not example.eth, the latter becomes a separate name. You can then set ENS records for it. Which allows a site owner to receive payments in cryptocurrencies like ETH and BTC to example.com.
Budweiser and VISA show intent
American beer company Budweiser recently changed its Twitter profile to a hand-drawn beer rocket NFT, designed by artist Tom Sachs as part of the Rocket Factory NFT series. Budweiser paid 8 ETH or around $25,000 for that. Importantly, they also registered an Ethereum domain name, beer.eth, for 30 ETH, close to $100,000. At this stage, it’s not clear what Budweiser will do with their new property but a few suggestions include Budweiser NFTs sold through the new domain, general content hosting, and even the idea that Bud may sell beer for ETH in the future. Although that might be a pretty expensive beer.
Another brand going in on NFTs is Visa. They made headlines at the end of August after paying $165,000 for a CryptoPunk. One of the original OGs of the NFT space, CryptoPunks now sell for millions of dollars on a daily basis so VISA aping in is a clear indicator they see value in the NFT space.
Second NFT wave
It all adds up to a clear sign that this second wave of the NFT boom will be significantly different from early 2021 when brands like Taco Bell and Pizza Hut were racing to put out NFTs depicting their own products. Visa buying an NFT from an already hot collection shows that a company notably cautious about aligning its brand with anybody fundamentally understands the artistic value, financial gain, and positive reputation gain from welcoming CryptoPunks. Moreover, Visa wants access to the NFT community, which could be taken as a positive sign for Visa’s future dealings with crypto in general. The same is true for Budweiser registering a .eth domain name. Big brands are paying attention, and as always there are opportunities plenty.
The above does not constitute investment advice. The information given here is purely for informational purposes only. Please exercise due diligence and do your research. The writer holds positions in ETH, BTC, ADA, MATIC, SAFEMOON, HEX, LINK, GRT, CRO, OMI, USDT, SOL, SHIBA INU, AVASTR, RAY, BOSON, AND OCEAN.