OK my $0.02 - for a Bitshares DNS offering, it's important to think up front about what the distinguishing features should be. My personal opinion is that the emphasis should be on the blockchain and DPoS. Domain Name resolution is the 800 pound gorilla, but it's a universal problem, and a proprietary solution from one chain will not satisfy the general need for all blockchain-based DNS. Be a different DDNS, highlight your inherent strengths through creative feature sets.
I would assert that since you have here a fundamentally different chain than Namecoin's "traditional-style" POW chain that should be the focus. Namecoin is very well served by the SHA-256 POW system they use, due to the unique merge-mining situation they have with Bitcoin. But making a weaker copy of that is, well, weak. Bitshares is a very fast, efficient chain with a different consensus model and should leverage that.
You have the potential here, for example, to get a new domain name registration up and resolving before even the first block is added in a 10-minute block system! Contrast that with Namecoin, where not only does each block take a while, but new registration requires two consecutive operations, so realistically you can't expect your name to resolve for people an hour after registering it.
Feel free to flame me to death for this next part, but I also believe that the emphasis on a complicated auction-style system to deter squatting was ill-advised. Not having a predictable annual cost is a negative for the business community, and I believe that "squatting", however you define it, is not an actual problem.
I've been involved in the domain industry for years, and people have complained since the late 90's that .COM was so completely squatted. Yet they continue tor register them, instead of going for shorter .WHATEVER domains. People find names, and the business has continued to boom with xxx,xxx,xxx .COM registrations. It continues to grow even this year, with hundreds of new TLDs introduced.
I don't expect many to agree about squatting being a fictitious problem, but my point is that designing feature sets around those capabilities that are unique to Bitshares chain is more appealing, no? You might prefer to think of it in terms of being a competitive advantage.
Near-instant registrations, as I alluded to earlier, would seem to be one such interesting differentiator. Ever look at Dash's (was Darkcoin) InstantX payments, where it happens almost immediately? This, for domain registrations (and subsequent website setup) is a killer feature that's very tough to match by any would-be competitors.