January 29, 2025

By Fred Hsu (CEO & Co-Founder, D3)

We’re excited to announce today a $25 million Series A funding round led by Paradigm to accelerate the growth of domains as a digital asset class! 

When we think about the internet, it’s hard not to marvel at how far we’ve come. But there’s one area that hasn’t kept pace: the domain industry. For years, I’ve watched waves of innovation skip our industry. At D3, we believe it’s time to change that. With DomainFi, we’re bringing the domain industry into the future, bridging gaps, and unlocking potential that’s been overlooked for far too long.

The Domain Industry needs an overhaul

The domain industry is foundational to the internet, yet it operates much like it did decades ago. It’s frustrating, inefficient, and ripe for disruption:

  • Slow and Manual Processes: Have you ever tried buying, selling, or transferring a domain? It’s painfully slow. Weeks or months of escrow services, manual compliance checks, and outdated systems make the experience far more complicated than it should be.
  • Opaque Systems: Transparency is practically nonexistent. Domain ownership data is fragmented, valuations are inconsistent, and brokers take a significant cut. The result? Confusion and mistrust.
  • Illiquidity: Domains are static assets. They’re hard to trade and even harder to leverage financially. Without deep industry connections, domain owners have limited options to monetize their holdings.
  • Isolated: Developers face an uphill battle with fragmented systems, complex integration requirements, and, most critically, a lack of programmability, stifling innovation.

The rise of Web3-based domains was supposed to be this industry’s panacea, but even they ended up having their own set of problems.

  • No Path to the Real Internet: Current Web3 name services aren’t ICANN-approved, and are disconnected from broader internet infrastructure.
  • Name Collisions: Competing name services, like .wallet, lead to frequent collisions and user confusion. Instead of a unified system, Web3 is rife with fragmented and overlapping solutions.

The Main Challenge

Above everything else, the main challenge that the domain industry needs to fix is the gap between Web2 and Web3 domain solutions. As things stand, these two solutions work in complete silos. For the domain industry to advance, we must find a middle ground where we can modernize and financialize domains without inheriting the inefficiencies of Web2 or the fragmentation of Web3? Enter DomainFi.

DomainFi: Bridging Web2 and Web3

DomainFi is our answer to the industry’s challenges. It’s not just a solution; it’s a new way of thinking about domains. Our mission revolves around three key principles: modernization, monetization, and innovation.

  • Modernization: At DomainFi, we’re tokenizing domains to transform them into composable, verifiable digital assets. Tokenized domains are fast, secure, and inexpensive to transfer. We’re cutting out the inefficiencies of traditional systems and replacing them with seamless processes.
  • Monetization: We’re introducing financial opportunities that simply didn’t exist before. Imagine being able to split a high-value domain into fractional ownership shares or use your domain as collateral for a loan. With DomainFi, these possibilities become reality. Automated on-chain valuation tools also ensure consistent, transparent pricing, making domains more liquid than ever.
  • Innovation: This is the part I’m most excited about. DomainFi’s open infrastructure invites developers worldwide to build on top of tokenized domain infrastructure. This includes not just domains but also identity, applications, and access sitting atop these domains. From marketplaces to new applications, the potential here is limitless.

How We’re Making DomainFi Happen

Here’s how we’re accelerating the DomainFi economy:

  • Announcing the Doma Protocol: The Doma Protocol is a purpose-built blockchain for DomainFi. It’s designed to modernize and unlock the liquidity of over 362 million existing and future domains. Think of it as transforming domains into composable, programmable assets. With some novel financialization features enabling applications like fractional ownership, the Doma Protocol is doing for domains what REITs did for real estate.
  • Creating a DomainFi ecosystem: We’re assembling leaders from across the industry including Solana, Avalanche, OneFootball, Plume and many others that will play key roles in creating a vibrant community. 
  • Strategic Funding: We recently closed a $25M Series A fundraise with some of the most respected names in the industry, including Paradigm, Coinbase Ventures, and angels like Dharmesh Shah (HubSpot), Sandeep Nailwal (Polygon Labs), and Richard Kirkendall (Namecheap). This funding will allow us to scale quickly to capitalize on the DomainFi opportunity.

Closing Thoughts

We’ve been in this industry long enough to see its flaws and limitations. But we’ve also seen its potential. Domains are more than static digital addresses; they’re digital assets with real financial value. With DomainFi, we’re redefining what’s possible, transforming domains into secure, interoperable gateways to innovation.

The digital real estate market is projected to grow from $340 billion to over $2 trillion. That’s a staggering number, and we firmly believe DomainFi will be the foundation for this growth. We’re building a future where domains are modernized, monetized, and primed for innovation.

If you’re as excited about this vision as we are, we invite you to join us. Together, we can shape the future of the internet and unlock opportunities for our industry.