Primer on the most prominent Providers of Decentralized Domain Name Systems (DDNS)
They have the power to secure your online identity but the space is still in development. Who are the contenders and what do they manage to do?
What is a Domain Name System (DNS)?
A Domain Name Service (DNS) is a system that allows users to register and manage domain names, which are human-readable addresses used to identify and locate resources on the internet. For example, "google.com" is a domain name used to find the Google website. Traditional DNS is a centralized system managed by a few organizations, such as ICANN, which can be subject to censorship and other forms of control.
Domain names solve a problem: the ability to transact information between parties with human-readable names. What is terrible with the DNS is that one doesn’t own the domain, and many organizations can censor and take control. If you register myname.com, the .com registry, ICANN (Verisign), and the registrar (e.g., GoDaddy), you used to register the domain can take access from you.
Here are a few different examples:
A hacker took control of all .io domains in 2017.
Suspension of 81k UK-owned .eu domains was suspended in 2021 as a cause of the regulatory changes caused by Brexit, and domains and emails were shut down overnight.
Spanish authorities raided the non-profit domain registry puntCAT operating .cat, seized computers, and deleted all .cat domains promoting the Catalonian independence referendum 1.October 2017.
Shadow libraries such as Sci-Hub provide, e.g., free access to millions of research papers and books. “Sci-Hub has cycled through domain names, some of which have been blocked by domain registry operators”1. Explained in a nutshell, on the one side, we have the party defending copyright violations, and on the other side, the breach of the right to science and culture under Article 27 of the Universal Declaration of Human Rights.
Seizure of the three biggest poker sites by the FBI in 2011.
What is a Decentralized Domain Name System (DDNS)?
A Decentralized Domain Name Service (DDNS) is a younger DNS system built on decentralized, blockchain-based networks. DDNS allows users to register and manage domain names in a decentralized and censorship-resistant way. Some of the notable features of DDNS are:
Decentralization: DDNS is not controlled by any single entity; this makes it more resistant to censorship and downtime than centralized systems.
Interoperability: DDNS can resolve addresses for various blockchain platforms.
User-friendly: DDNS allows for creating human-readable addresses for smart contracts and decentralized applications (dApps), making it easier for users to remember and share Ethereum addresses.
In the following, we shall go through the most notable projects.
World’s first DDNS: Namecoin
In April 2011, the Namecoin blockchain was the first successful implementation of a decentralized DNS to register and resolve domain names ending with “.bit”. It is a fork of the bitcoin blockchain and is the first altcoin (alt=alternative)! Today, it has only a handful of users left and is not supported anymore by OpenNIC since 2019. The Namecoin (NMC) can still be traded in tiny volumes on CoinEx or mined.
Namecoin is a first-generation experimental project, and I would need clarification on why it deserves a revival. However, there was a time when Namecoin was called:
“Namecoin - The more useful twin of Bitcoin”
Namecoin is quite similar to the bitcoin blockchain:
The supply is 21mm coins.
The block time is 10 minutes.
Difficulty adjustments are every 2016 blocks.
Even the hashing algorithm is SHA256D.
The difference lies in the .bit domain feature. The excellent bitcoin comparison has not helped, and today, we also know that the vast majority of domain names sold were for speculative reasons and never used.
Second Generation DDNS: Ethereum Name Service (ENS) & Unstoppable Domains (UNS)
While Namecoin intends to replace the DNS, the following services complement DNS with a decentralized name resolution.
In May 2017, the ENS (Ethereum Name Service) was launched on top of the Ethereum blockchain. ENS uses smart contracts (ERC-721) on the Ethereum blockchain to register and manage domain names and to map them to Ethereum addresses, such as a wallet address or a smart contract address. It can also be used as a domain name for a decentralized website. However, the services of fleek.co are advised, and a deeper understanding of the matter is necessary.
In the spring of 2019, Unstoppable Domains (UNS) was launched on top of the Ethereum blockchain and the decentralized file-sharing protocol IPFS (Interplanetary File System), where the website content is then hosted.
Comparison between ENS and UNS
In principle, UNS can do everything ENS can and a bit more. It offers a wider variety of Second-Level domains (.crypto, .NFT, .wallet, .x, .bitcoin, .zil, .dao, .888, .blockchain, etc.). ENS focuses on Ethereum and offers .eth and integrated later .luxe, .xyz, and .kred.
Registering and managing domain names on ENS requires using Ether, which can be expensive depending on the current market price. At the same time, UNS also offers services on the Polygon network. Also, registering a UNS domain is a one-timer and does not have any recurring fee structure like ENS. (However, from an organization’s perspective, ENS is probably the more sustainable business model.)
When looking at crypto payment records, ENS is limited to payments on Ethereum, while UNS can be set up for any blockchain.
In summary, while ENS primarily focuses on providing decentralized human-readable wallet addresses for Ethereum, UNS focuses more on the decentralized domain name feature, crypto payment records and offers better web hosting, making it more feature rich and versatile.
Different Approach for Crypto Payments with FIO
In February 2019, FIO (Foundation for Interwallet Operability) launched a sidechain of the EOS protocol designed to make interacting with different cryptocurrency wallets and exchanges easier and more user-friendly. The FIO protocol adds a layer of abstraction to existing blockchain addresses, allowing users to create human-readable addresses (e.g., "Roman@wallet") and transfer crypto assets. Additionally, the FIO protocol includes multi-sig support, payment requests, metadata possibility, and token locking to improve security and functionality. The FIO token pays for specific services within the FIO ecosystem.
The solution seems to be a good user experience once a wallet is integrated the manual way: I can send lots of cryptos my wallet is supporting by typing the amount, e.g., in U.S. dollars, to my friend “Roman@wallet” and he will receive the value in a popular cryptocurrency I determined. In addition, through multi-signature technology, an additional layer of security adds value for users. However, the FIO Protocol is still in the early stage as these 13 wallets are supported (but not Metamask), and a few centralized exchanges are connected (but not Binance). Also, payments are limited to the supported blockchain, e.g., Bitcoin, Ethereum, EOS, and Tron, but not the Lightning Network (in development). Lastly, FIO domains do not have the concept of a Top Level Domain (e.g., .com, .org, .net, .io), but this might be added in the future.
Additions to the Market: Handshake & Decentraweb
In February 2020, the “experimental peer-to-peer root naming system”2 Handshake network went live. At first sight, the Handshake blockchain appears to be a Bitcoin fork with its proof-of-work consensus algorithm.
However, when taking a closer look, we see a new blockchain using the bcoin library and leveraging the infrastructure and compatibility provided by bcoin, an enterprise-level JavaScript library for Bitcoin designed to build scalable and secure applications.
In addition to domain name registration and management, Handshake aims to provide a decentralized certificate authority (CA) system that allows issuing of SSL/TLS certificates. This will allow for the creation of fully encrypted, secure websites that are not reliant on centralized CAs, which can be subject to censorship and attacks.
Regarding registered domains, the Handshake Name System (HNS) is the most successful decentralized DNS with over 9,5 million registrations. The domains are registered for two years and are managed in an auction process. HNS also has a 90-day sunrise period before launch to allow existing rights-holders to claim their trademarked names. For customers who don’t want to pay with a crypto wallet, traditional registrars such as Namecheap can buy a domain from Handshake. However, this is a) more expensive, and b) there is currently no way to transfer the domains out of the web hosting service.
In the last 12 months, the Handshake blockchain has seen very few commits, but the community seems alive and kicking in the Telegram group. When the initial HNS coins were distributed, the majority went to active Github users meaning the community is dominated by believers of the free and open source (FOSS) community. Still, HNS is not an easy-to-use solution for normies, and I am skeptical as long as the user experience seems rather cumbersome.
In October 2021, Decentraweb launched and picked up the idea of DNS registrations through the minting or purchasing of non-fungible tokens (NFT standard ERC-721) again. Currently, promising additional utility is in the development phase so that, hopefully, decentralized websites and mail (webmail, IMAP, etc.) can be hosted via IPFS soon. If Decentraweb introduces these features with a good user experience, they might face a splendid future. It is common to deliver IT solutions in the early stage, but there still should be a significant edge.
Stacks - Layer 2 Blockchain on Bitcoin
In January 2021, the Stacks Blockchain launched. Formerly known as Blockstack, Stacks is a rollup/ Layer 2 blockchain on Bitcoin, enabling smart contracts, dApps, and a decentralized storage network for dApp data. One dApp, the Blockchain Naming System (BNS), allows users to register and manage domain names. The token STX is still quite successful and is listed as a Top 100 token according to market capitalization. The BNS has not been a big success so far despite good traits. The DDNS project is only one small initiative among many and will have to subordinate itself accordingly. Thus, it is also clear why market capitalization is high: Stacks is mainly valued as a Layer 2 blockchain.
There are 80+ dApp projects, primarily in development, which reminds me of a big construction zone when testing some dApps.
The most promising feature of Stacks is to tap liquidity from the most prominent blockchain in market capitalization, the Bitcoin blockchain. Will it be able to compete with the DeFi and NFT space of the Ethereum Virtual Machine (EVM) networks in the future?
DappReg - Focus on dApps
DappReg is a decentralized name service provider focused on decentralized finance (DeFi) projects, allowing users to create and manage decentralized websites and interact with smart contracts through domain names. DappReg also has a feature to link the domain name to a smart contract; this way, users can interact with the smart contract through the domain name instead of the smart contract address. This feature allows for more user-friendly interactions with decentralized finance projects and improves security, as users don't have to share their smart contract addresses.
Web Browsers and their Role in Decentralization
The market leaders of web browsers, Chrome, Safari, and Edge, are not supporting decentralization today. That led to open-source vendors' development of several extensions, such as IPFS Companion and MetaMask. The extra configuration would be required to connect Handshake Name System to popular web browsers like Chrome or Firefox. Alternatively, the open-source Beacon browser or Fingertip, a lightweight Handshake resolver from Impervious, can be used.
However, at least for the decentralized DNS, several web browsers like Firefox, Opera Crypto Browser, and Brave support ENS, UNS, and the InterPlanetary Service Protocol (IPNS). IPNS is another peer-to-peer naming system built on IPFS led by Protocol Labs.
In addition, Opera and Brave also have a built-in cryptocurrency wallet that may or may not support the desired coins or tokens.
Decentralization and user protection are solid trends for the foreseeable future, and my prediction would be that the role of these “Web3 browsers” will grow to the point where the top dog cannot ignore the trend any longer. The problem is that Chrome would need to disrupt its business model; if they wait too long, it will lose its power to stay on top.
Summary
These are the most prominent examples of decentralized name service providers. As the field is evolving, new players are frequently appearing.
It's important to note that many of these projects are still in development, and the Firms using DDNS solutions today are most likely part of the Web3 industry as DDNS has several weaknesses:
Limited adoption: DDNS is still relatively new and may need widespread adoption. This means that only some users and platforms may support it, making it difficult for some people to use.
Complexity: DDNS can be more complex than traditional domain name systems, especially for users unfamiliar with blockchain technology. This complexity can make it difficult for some people to register and use a DDNS address.
Scalability: DDNS is built on blockchain technology, which can limit its scalability. For example, ENS & UNS are built on the Ethereum blockchain, which limits the number of transactions that can be processed per second.
Limited functionality: DDNS primarily provides a way to associate human-readable domain names with blockchain addresses. It does not provide other functionalities such as website hosting, email hosting, or DNS management, often provided by traditional domain name services.
Token dependency: Many DDNS require users to hold and use tokens for registration, which is an additional cost for users and may only be desirable for some.
Conclusion
NFT solutions do not require additional tokens, which is a big plus. Unfortunately, this solution also limits the set of features in practice.
The traditional DNS has put the bar relatively high for the projects. When purchasing or renting a DDNS, these features should be easy-to-implement:
DDNS
blockchain-agnostic payment records
Possibility to (quickly) link with IPFS
dApps (DeFi, metaverse) to connect to DDNS easily
Possibility to connect with e-mail protocols
(Dec. certificate authority (CA) system)
None of the projects has all these features in scope. Some have just one core use case. The projects are either in an experimental stage or try to specialize in a niche first. In the future, it will be essential to see how fast the teams can execute new features.
When looking at the registrations, Handshake is the favorable solution with over 9,5 million registrations. However, registrations only show the past but give little hints about the future as new contenders step into the ring afterward.
According to market capitalizations, different solutions are favored by the crypto market participants:
Stacks and ENS lead the pack! However, an argument against this may be that Stacks and ENS have been projects with high media attention than less funded projects. Stacks has a low adoption as of now.
Behind ENS stands a foundation whose goal is not to maximize profits for token-holders but secure that users can afford “renting” their domain names. So far, it seems they stick to the “license plate for Ethereum payments” use case with little effort to expand.
When considering this, FIO and Decentraland are the more exciting contenders for investors as they have much lower market capitalizations. I suspect they can also expand coverage and increase features faster than the market.
Depending on what you need, I hope this article helped you decide as a user. If you expect to find the future champion, there is no odds-on favorite, and with emerging technology, new contenders are likely to enter the stage and disrupt the status quo.
https://en.wikipedia.org/wiki/Sci-Hub#Legal_status
according to own claims taken from the official website https://handshake.org/