Doma Protocol has launched its mainnet, introducing a novel system designed to transform traditional internet domains into programmable and liquid financial assets within the Decentralized Finance (DeFi) ecosystem. This initiative aims to address inefficiencies in a market valued at over $360 billion, which currently relies on outdated processes characterized by slow transactions and high fees.
The Doma Protocol targets a significant market that has historically lacked modern trading infrastructure, instant settlement capabilities, and integration with open financial markets. The current methods for buying and selling domains are often manual and time-consuming, involving brokers who charge substantial fees ranging from 10% to 20%. Settlement periods can extend for weeks, and the completion of high-value domain transactions may take between six months and eighteen months. Doma Protocol is set to disrupt these traditional practices.
Doma Builds on an Interoperable Foundation
The new network operates on a Layer 2 architecture built upon the OP Stack, featuring interoperability through LayerZero. It integrates with multiple blockchain networks from its inception, including Base, Solana, and Avalanche, as well as the Ethereum Name Service (ENS). This robust architecture facilitates the tokenization of standard internet domains, such as .com and .ai, into ERC-20 assets. These tokenized domains can then be traded on open markets, enabling fractional ownership, instant transfers, collateralization, and continuous 24/7 liquidity.
A crucial aspect of Doma's approach is its commitment to maintaining compliance with the Internet Corporation for Assigned Names and Numbers (ICANN) and working with existing registrars. These registrars collectively manage over 30 million domains. Doma is not creating a new, experimental naming system; instead, it is developing a financial infrastructure for an asset class that is already regulated and actively in use worldwide.
Ending Domain Centralization
The Doma Protocol introduces two distinct types of tokens to manage domain assets. Domain Ownership Tokens (DOTs) are designed to represent ownership and will replace the sector's conventional manual transfer procedures. Domain Service Tokens (DSTs) are introduced to separate the operational aspects of a domain, such as DNS configuration and hosting management. This separation allows ownership and operational control to exist independently on different layers, while still preserving the real-world utility of the domain, including email services and website resolution.
Early testing phases have demonstrated significant interest and activity. The Doma testnet recorded over 35 million transactions, involved 1.45 million addresses, and saw 200,000 domains tokenized. A development program valued at $1 million was also part of these early efforts. On the mainnet, which has recently gone live, there are already more than 2,700 active addresses and approximately $183,000 in total value locked. While these figures are modest relative to the overall market size, they represent a significant step forward for a sector that has seen minimal domain tokenization until now.
The primary challenge for Doma Protocol will be to demonstrate the adoption of its infrastructure by domain holders as a viable channel for exits or income generation. Additionally, the protocol needs to convince DeFi users to recognize domains as a tangible Real-World Asset (RWA) class that aligns with the market's requirements for liquidity, governance, and traceability.
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