That could quickly change if someone succeeds in making Web 2 and Web 3 domains work together in a truly seamless manner. After all, who wouldn't like things like lifteime domain ownership with no renewal fees that are just one of the major selling points of Web3 systems? Several companies are taking varying approaches to create that fusion but again, most Web2 folks aren't paying a lot of attention to that, in part because they have had little or no experience with most major players in Web3. That however has now changed. Two of the most widely-known and successful players in the traditional DNS world, Co-Founder and CEO Fred Hsu and Co-Founder Paul Stahura have joined forces in a new company, D3, that has taken on the daunting task of making it possible for all domains, including Web3 TLDs, to work on the tradional Web2 system. 

D3 Co-Founder & CEO Fred Hsu (left) and Co-Founder Paul Stahura

When you look at the hurdles involved in merging Web2 with Web3, it would appear to be a nearly impossible task but for the past three decades Fred and Paul have both accomplished things few would have dreamed of when they started out. When I entered the domain business in 2002, I registered and managed my domains at Enom.com. Paul Stahura founded that popular registrar and went on to co-found the world's biggest new gTLD registry operator, IdentityDigital (Paul was also profiled in a 2015 DNJournal Cover Story). From 2006 to 2014 I attended most of the landmark Domainfest conferences staged by Oversee.net, an innovative company that was co-founded by Fred Hsu, who also served as its Chief Technical Officer.

Fred noted, "My journey in the domain industry began in the 90s, during the early days of the internet. At Oversee.net, I helped pioneer many domain-related services, including aftermarket brokerage, web hosting, and ad placement. Later, I founded and led multiple successful ventures, including Manage.com, a mobile ad tech platform acquired by Criteo, and Ember Entertainment, a AAA-game studio that was acquired by Gala Games. With over two decades of experience in the internet industry, I’ve had the privilege of witnessing—and shaping—the growth of the internet. I’ve seen firsthand how valuable domains can be, not only as web addresses but as real-world assets with immense untapped potential. This experience has led me to my current role as CEO and Co-Founder of D3, where we are leading the charge in transforming the domain industry through Web3 technologies."

While the challenge is an enormous one, Fred is convinced the potential rewards for domain owners make it one that is well worth taking on. He said, "Today, the domain industry operates within a system that is both centralized and limited. The industry is deeply rooted in decades-old processes and is experiencing multiple pain points. Those include:

• Lack of Ownership: Domain registration and ownership are largely controlled by centralized registrars and governing bodies. Domain name holders aka “domainers” pay fees to maintain ownership, adhere to specific usage rules, and often face restrictions on transfers or sales.

• High Fees: Brokers charge high commissions (often 20-30%) on transactions, significantly reducing the profitability and liquidity of domain ownership.

• Slow, Inefficient Processes: The process of buying, selling, and transferring domains is unpredictable and often involves lengthy escrow processes and manual compliance requirements that can take weeks or even months.

• Data Fragmentation: Valuation discrepancies, data silos, and the lack of standardized verification create confusion and mistrust in today’s domain marketplace.

Web3 introduces economic benefits that are impossible in today’s domain industry model," Fred added. "Decentralized name systems enable lower fees for transactions and renewals, as they can cut out the centralized gatekeepers and their exorbitant markups. Transactions happen on-chain, facilitated by smart contracts, meaning the process is secure, transparent, and, most importantly, automated." 

Fred, said the D3 vision would would bring these benefits:

1. Modernization: Authoritative tokenization of existing and future domains turns them into trusted, verified digital assets. This modernization step lays the foundation for fast, secure, low-cost liquidity, breaking down the barriers of slow transactions and high fees.

2. Monetization: DomainFi opens up opportunities for buying, selling, and trading domains as real-world assets (RWAs). Domains can be used as collateral for lending or even be involved in derivative products, further expanding financial utility and liquidity.

3. Innovation: Building an ecosystem of scalable tools and developer platforms to innovate on top of tokenized domains, creating opportunities for more utility through new applications, marketplaces, integrations, and services.

Since the goal is to have interoperability between Web 2 and Web 3 domains, we wanted to know how D3's plan would allow a Web3 TLD like .ape work on current Web 2 infrastructure controlled by ICANN? Fred told us, "We are the official domain partner of top Web3 ecosystems like ApeCoin (see the official .ape investment proposal here), Shiba Inu, NEAR Protocol, Core DAO, and others because of our team’s operational expertise in launching TLDs that work on the root layer of the internet. Unlike other “Web3 domain” providers and naming systems, we are 100% committed to DNS compatibility and ICANN compliance and plan to apply for and obtain new TLDs with our Web3 partners as part of the upcoming ICANN round."

What I've included in this article is just the tip of the iceberg. For much greater detail on what D3 is doing I recommend reading this post Fred Hsu published on the D3 Blog: Unleashing the Future of the Internet with DomainFi. If you can make it to Las Vegas later this month, you will also have an opportunity to get the details straight from the horse's mouth - and that of many other experts involved in the Web2 to Web3 consolidation effort at D3's Dominion 2025 conference that will be held January 29 & 30, 2025 at Resorts World. 

Those are very timely dates and a perfect location because Dominion will immediately follow the Internet Commerce Association's Annual Meeting at Resorts World January 26-28. ICA members include many of the world's leading Web2 players, so there is a great opportunity for cross-pollination that week in Las Vegas. If you are interested in attending Dominion 2025, D3 provided us with a 30% off registation link for our readers.