I had a Twitter conversation with George Kirikos about ICOs in the domain business last week. He mentioned that “a domain drop catcher is doing an ICO for domain auctions.” It seems that ICOs (Initial Coin Offerings) have been very popular this year, although my knowledge about them is very limited. For those who have the same amount of knowledge about ICOs as I have, TechCrunch has a good article, WTF is an ICO, explaining the utility behind them.
One thing I wondered about was whether an owner of a high value domain name could do an ICO to fund the development of a business on that domain name. Since ICOs seem to be done to fund businesses, it would seem plausible that domain investors would have an interest in this space to get business funding for their idea. I am going to speculate here, but in my opinion, there are going to be some ICOs in 2018 to fund the development of domain names.
From my perspective, only a few domain investors I know have had success building a great business because of a domain name, although quite a few seem to have tried. I am not sure if adequate funding has been the main stumbling block, so having access to a great deal of funds might not be the key success factor that was missing.
Personally, I think there would be huge risks for investors in this type of model, but as I mentioned at the outset, my knowledge is limited. Perhaps there is some sort of risk mitigation tool I am not aware of that would protect ICO investors if the business would not be successful. As a tool that seems to be unregulated at this point in time, I am not really sure if there is any risk mitigation, and it seems super risky to invest (buy into?) in an ICO based on building a business on a domain name. Again, my knowledge is limited though.
It would be interesting to see what happens if there are ICOs launched by domain investors, although I can not see myself participating on either side.
Do you think this is plausible? Are any domain investors already doing this with their high value domain names? Your thoughts and insight would be educational and appreciated.