Idea Behind TLD3

The idea is simple:

• Prove ownership of your domains
• Mint them to earn passive income
• Place buy & sell options on tokenized domains

But how do we prove ownership?

Ownership

First, we have to understand the difference of Web2 and Web3 domains. We use the term Web2 domains as the traditional domains, like dorahacks.io, example.com, etc. When we use the term Web3 domains, we mean the minted domains on Doma Protocol, where users can trade their domains as crypto assets.

Web3 domain validation is easy. Doma Protocol's Subgraph (opens in a new tab) GraphQL API provides methods to fetch which wallet has which domains.

Web2 domain validation is a little bit more complicated for users, requires DNS challenges. I think that's the beauty of Web3...

Tokenization

In TLD3, users tokenize their Web2 or Web3 domains. Since Web3 domains are already tokenized on Doma Protocol, we can call this de-tokenization in some sense. This is an abstraction layer, which we want to remove later and fully inherit Doma features.

These tokenized domains are instantly listed in TLD3 derivative market, waiting for people to buy & sell these assets.

It may change by owner's smart contract calls, but by default, a domain is split into a million fractions, and worth 0.1 ETH when first tokenized.

uint256 public totalFractions = 1_000_000;
uint256 public ethDeposited = 0.1 ether;

Then the price changes on the contract, after buy & sell actions. Everything is transparent and open.

Note that, to tokenize a domain, you must verify the ownership, set a ticker, and pay the minimum ETH deposit amount. There is a deposit amount because otherwise, it would be extremely easy to spam the domains into the derivative market without a risk factor. The risk here is depositing ETH and trying to earn it back via trading fees.

Trading fees can also be changed by the contract owner; however, by default, we set fees at 1% for the platform, 1% for the domain owner.