I have some ideas for an alternative DNS model. Maybe they will deter squatting, and hopefully maintain profit for the DAC. They also enable people to keep a domain name indefinitely, without the possibility of rich competitors/bad actors forcing them to pay too much. It's kind of a hybrid of other ideas which I hope, with some improvement, could be workable.
This is a coarse, poorly written overview, and all numbers are made-up!
Key Points:- Domain names are leased (at least initially)
- The length of the lease is variable
- People can keep their domain name indefinitely
- The model can be made straightforward for the end user (even if it's more complicated behind the scenes)
- If a lease becomes prohibitively expensive because of a changing market, there is the possibility of the lease becoming cheaper
- There are ways to lessen the negative impact of squatters
- These ideas are far from optimized because of my lack of time and concentration
- If there is an inkling of value below, the community can build upon it and add to it
If you want to create and obtain a new domain name you can start an auction. You place a bid to
lease the name. If others join the bidding it is possible for them to vary the length of the lease, as well as the "price per year". One purpose of the variable lease length is to deter squatters (if we can ensure they are paying enough) by allowing the DAC to take a larger lump sum up front. This lump sum could possibly be held as collateral - I'll come back to this. A bid with a higher "price per year" but a shorter lease span would have to be weighted against a bid with a lower "price per year" with a longer lease span. There is a sweet spot in there somewhere. People should be able to bid successfully on a domain for a one year lease, even if people have bid for longer leases (they will just have to pay somewhat of a premium on the "price per year"). An algorithm would be needed to assign an optimal weighting to "price per year" against "length of lease". This increased complexity needn't put end users off. For example, the GUI could present them with a couple of sliding scales with "sliders". This would automatically indicate to the user the minimum price, or maximum lease span, which they can bid relative to their chosen parameter value, in order to lead the auction.
If, when leases are paid for, some of the 'money' is held as collateral, it could enable extra features (only part of the lease value would be collateralized, and the rest would immediately go to the DAC as profit). There would be the ability to give partial refunds on cancelled leases, or maybe a rewards system if domains add significant value to the DAC in some way.
If someone is mid-lease and they don't want their domain name anymore they can put it up for auction or cancel their lease. In either case they could be given a certain fraction of any remaining collateral. The collateral could be released such that it can only be used to pay for another lease on a different domain name (so potential squatters can't cash out, and the DAC gets more profit). The percentage of collateral returned to the leaseholder can be reduced so that people aren't incentivized to pay for long leases which they don't want, or to squat. Some percentage of the total collateral could even be used to subsidize the price of the domain for new bidders - although I haven't thought this part through! There remains some incentive to release a domain name if you don't actually want it, because you can use some returned collateral to pay for a different domain name.
When someone is coming to the end of their lease they can:
- Let it expire (or auction it) and the domain will become available for others
- Renew the lease at the same price they have been paying
- Attempt to renew the lease at a cheaper price
Let me explain the idea of allowing people to attempt to get the price of their lease down. The assumption is that we want to allow people to keep their domain name indefinitely (I see this as a very valuable feature). It is possible that the market could change drastically after someone has obtained a domain name. They could end up paying absurdly high rates at some point in the future if there is never a chance to lower the lease price. For example, if leases are paid using the native token (BitDNS?), the price could rocket. This problem could be somewhat overcome by offering the option to the leaseholder to convert the “price per year” to another currency/asset/token, for example BitUSD. There would probably need to be a limit on the frequency with which these conversions are allowed.
If someone wants to attempt to get their lease at a lower price, the DAC needs to charge a fee, or restrict the frequency with which people can attempt this. The leaseholder can try to get it cheaper by going through a special kind of auction. Anyone can bid, but the original leaseholder will retain the option of keeping the lease at the original price, even if the bid prices go above this level. If people aren't bidding the price up to the original level the current leaseholder will be successful in getting a reduction on the lease price (there could be limits imposed on the amount of reduction). Obviously if the leaseholder doesn't wish to pay, the domain name must go to the highest bidder. For the users, there will have to be some way to clearly distinguish between this type of auction and the standard type.
Other options to consider:
- If conditions necessitate, a minimum "price per year" could be set, perhaps for all leases longer than one year. The purpose is to discourage squatting (or people attempting to obtain many long leases at a cheap price). While the DAC is young, and the value of BitDNS is unknown, the minimum price could perhaps be set in relation to the value of BitDNS against BitUSD, using delegate feeds. Alternatively we could assuming that the DAC will be successful, the price of BitDNS will rise significantly with time, and therefore the value of the lump sum which was bid will rise as the lease progresses. This could negate the effect of buying the cheap, long leases, which would have been undesirable as far as profitability of the DAC is concerned.
- Any user could send an anonymous alert to the current leaseholder of an existing domain, to communicate their interest in obtaining the domain. If such an alert is sent in relation to a domain name which has a lease with between one and five years remaining, the current leaseholder could be compelled to make a choice. They can either extend their lease to five years or more, or they can auction the domain name. This measure is to act against squatters, while allowing people to trial a domain name for a year unhindered.
- Lease lengths could be measured in months (or less), rather than years.
- Maybe there could be certain conditions whereby people could get a domain to keep freehold (i.e. to own outright with no more leasing).
- Secondary tokens of some kind could be introduced, based upon an incentive structure, a bit like with like LTBcoins
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my 2 btsx
looks at a glance like bitsapphire 
, only with a bigger head!
