Are you guilty of impulse buying ENS Domains? We‘ve all been there – you find a great domain that seems like the perfect fit and you buy it without thinking twice.
Unfortunately, sometimes these domains have a misspelling or don‘t evoke the emotion we thought they would. In this blog post, we‘re going to explore the concept of impulse buying and how to avoid it when purchasing domains.
We‘ll also examine the pitfalls associated with buying domains on impulse and provide tips for making sure you get the perfect domain for your needs.
What is Impulse Buying
Impulse buying is a type of purchase made without much thought or effort. It‘s a purchase that is made without planning and without taking the time to consider the consequences. When it comes to Web3 domain names, impulse buying can be a dangerous thing.
Before you make any impulse purchase, it‘s important to understand why you want the Web3 Domain in the first place. Do you want to build on the domain name, or re-sell it for a higher price? Are you planning to hold it long-term, or make a profit within a short period of time?
If you‘re considering buying a Web3 domain name, take the time to do your research. Make sure you understand all the details before you make the purchase. Impulse buying can be a great way to get a great deal, but it can also be a costly mistake.
Why People Impulse Buy Domains
Domain trading is a unique type of trading because it deals primarily with the emotions behind words. When you buy a domain, you’re buying not just the words, but the emotion that those words bring with them. This is one of the main reasons why domain buyers are so passionate in promoting their NFT domains – they’re tapping into the emotion that words can evoke. This is different from trading other assets such as JPEGs, stocks, and crypto, which is more a matter of math than emotion.
3-letter and 3-digit domains are popular because they don’t evoke the same type of emotion as other domains do – they’re more a matter of math than emotion. There’s also the fact that these domains are limited in number, which takes the emotion out of trading.
At the end of the day, trading domains involve dealing with the emotions of words. While you may try to remove emotion from the equation, it’s impossible to do so – words will always evoke emotion, no matter the context.
Types Of Impulse Buying
If you have been involved in Web3 and ENS (Ethereum Name Service) Domain space for a while, you have probably made some impulse buys yourself. Impulse buying of ENS Domain names can take many forms, and often reflect different motivations:
- Emotional Pricing: The value of emotion vs. the use of the domain
- Math: Using math to understand scarcity, but using it wrongly to destroy value.
- Bandwagon Buying: Certain derivatives or trends in the type of domains that are registered.
- Meme Domains: Domains created for a comedic purpose.
- Digits: Buying numbers for the sake of buying numbers.
- JPEG Derivatives: Buying domains of JPEG projects based on their abbreviation and number value.
- JPEG And Web 3 Projects: Buying on the speculation that a web 3 project will do good and then buying your domain.
- Historical-Domains: Belief that the history and age of the domain create inherent value.
- Grail Hunting: Buying: registering, or minting domains you think are grails.
- Languages you don’t understand: Buying domains in a language you don’t know hoping a buyer who speaks a foreign language purchases it from you for a higher price.
1. Emotional Pricing
Emotional pricing is an important concept to understand when trading Ethereum Name Service (ENS) domains. Many traders may think that a domain such as Happy.eth and IAmHappy.eth are worth the same amount, however, this is not the case.
Words are emotional but traders need to learn that emotion does not create much value unless you market a brand with those said words. Just because Happy.eth and IAmHappy.eth invoke the same emotion, Happy.eth will always sell for more on the basis of scarcity.
When trading ENS domains, it is important to understand that words are emotional, but unless you market a brand with those words, the emotion does not equate to much value. To tame emotional pricing, traders must understand the difference between the emotion behind a word and its cash value. By understanding the math behind your domain and its derivatives, the emotion can be tamed and the value of the domain can be accurately determined.
Back in late May and early June of 2022, there was a frenzy of excitement over Richard.eth. It’s important to remember that there can only be one Richard.eth, but there can be multiple Richard_.eth. This is where math comes into play. When it comes to domain buying, math is your best friend.
Three-digit domain names and three-letter domains are highly valued because of their inherent scarcity. With the Ethereum Name Service (ENS), domains must contain at least three alpha-numeric characters (excluding emojis).
Using math as a tool of ignorance can be damaging. For example, buying a six-digit domain with the mistaken belief that since there are eight billion people, you own a domain that is 1/8000 of the world population. This is not the case. Six-digit domains are not used to create valuable brands in web 2 and they will not be used to do so in web 3 either.
Math should be viewed as a tool of educated calculation, not one of ignorant destruction. By understanding the principles of math, you can make smarter decisions when it comes to buying domains.
3. Bandwagon Buying
Have you heard about the “passport club”? It was a trend that took over the ENS domain market back in the summer of 2022. At the time, everyone was clamoring to register country flag domains with a number attached, hoping to make a quick buck.
Unfortunately, these domains never sold and the only people who made a profit from the trend were the ones promoting it.
This “ENS Summer” can serve as a cautionary tale for all of us. Bandwagon buying is a dangerous game to play and often leads to failure. So how can you avoid it?
When taking advice from influencers, always remember that they have a vested interest in creating a sense of urgency and action. Take their words with a grain of salt, and don’t get too wrapped up in the hype.
4. Meme Domains
Meme domains have become increasingly popular in the ENS and Web2 domain market, yet they often prove to be a risky investment. The story of “stop-doing-fake-bids-its-honestly-lame-my-guy.eth” serves as a cautionary tale to all would-be meme domain investors.
The original owner of the domain made a fake bid of 100 WETH and then sold it for 2 ETH to an arbitrage bot, who then sold it back to the original owner for a profit of 95.5 ETH. This is one example of how meme domain owners can be “rugged” by their own hubris.
If you’re looking to invest in ENS or Web2 domains for the long haul, it’s best to steer clear of meme domains. While memes can become incredibly viral overnight, they can also vanish just as quickly.
To avoid getting stuck in a “pump–and–dump” situation, it’s important to be aware that meme domains often involve fake bids and fake sales. It’s always better to be safe than sorry when it comes to investing, so when in doubt, leave meme domains alone!
Digit domains can look tempting due to their scarcity, but be careful. It‘s important to remember that DNS and ENS were created so people didn‘t have to remember long strings of numbers. The average human mind can remember a maximum of seven random digits at one time, with a plus or minus of two.
Anything beyond a five–digit domain should be carefully considered. Who is going to take the time to remember a six–digit domain? Probably not many people.
Words are more memorable than digits because words invoke images and emotion, numbers don‘t. If we still used the numbering system for website addresses, no one would be using the internet. Digits past a certain count are like using regular IP addressing for websites, making the DNS and ENS systems seem counterintuitive.
Impulse buying into digits can be a very toxic trend in ENS, so be sure to think twice before investing in a domain with too many digits.
6. JPEG Derivatives
Just like Richard.eth and Richard2022.eth there is a huge trend of buying and minting BAYC.eth derivative domains.
Last summer, I took a leap of faith and purchased BAYC1395.eth in the hopes that one day the owner of BAYC 1395 would reach out and purchase the domain. I knew that there was a risk involved, as JPEG derivatives like BAYC1395.eth can also be APE1395.eth, or ultimately 1395.eth.
However, I was confident that the owner of BAYC 1395 would recognize the value of a domain name in plain digit form. After all, it‘s more than just a practical asset – it‘s a symbol of status and prestige.
Time will tell whether I made the right decision, but I‘m hopeful that one day I‘ll be rewarded for my investment.
7. JPEG And Web 3 Project Domains
Are you looking to invest in Web3 projects? If so, you should be aware that the capitulation phase of the market is upon us. Many overhyped projects that were being over–invested in are losing steam, and money is being diverted towards projects that have a real use case and purpose.
It’s important to do your research and make sure the project you’re investing in is legitimate – not just a “mint and rug”.
For example, you are much better off owning uniswap.eth than you are owning azuki.eth on the basis that Uniswap is built to be decentralized and is a valid Web3 application whereas Azuki is built on hype and marketing.
My advice here is to buy project-based domains that add value to the customers and users, not projects that just mint a JPEG and hope for some shoddy merchandise. This involves doing research on how well smart contracts on these projects are written and that will help you determine whether the project is legit or a mint and rug. I own domains to a few rug pull projects and let me tell holding that kind of bag is annoying and expensive.
Don’t waste your money on projects that are purely based on hype and don’t add any value to customers and users. From experience, I can tell you that holding a “rug pull” project bag is annoying and expensive. I own domains to a few rug pull projects and let me tell you – holding that kind of bag is both annoying and expensive. Take your time and make sure you’re investing in the right Web3 projects!
8. Historical Domains
Have you ever stopped to think about the history behind the domains we buy and use? If you had, you might know that the most valuable domain in the world is symbolics.com, the first domain ever registered. Surprisingly, many people in the tech industry are completely unaware of this.
When it comes to tradable assets, a pre–punk domain won‘t be as valuable as a CryptoPunk. That‘s because CryptoPunks are more than just historical utilities, but also historical works of art. So the next time you‘re buying a domain, take a moment to consider its historical context and you might find yourself investing in something truly unique.
The rise of ENS has been a historical utility, but not a historical art. I recently purchased Richard2022.eth, in hopes that the domain would increase in value due to its relevance to the year 2022. However, the reality is that newcomers to Web3 are likely to opt for the lowest number of a Richard.eth derivative, instead of one that is rooted in history.
This highlights an important point: history does not always dictate the value of a domain. The Dutch East India Company was the first-ever publicly traded company, yet it is no longer in existence. When it comes to buying ENS domains, it is important to consider the value of the words or phrases in the domain. If there is no value, then it is best to avoid purchasing them.
9. Grail Hunting
Grail hunting in the crypto bear market of 2022 can lead to some serious mistakes. Earlier this year, I made a few of my own when I impulsively bought domains like successfully.eth, financinggod.eth, and HabibiOfficial.eth.
These all looked like great deals at 0.02 eth each, but I failed to check the spelling. What I actually purchased was succesfully.eth (missing an ‘S’), financingod.eth (missing a ‘G’), and HabibiOffical.eth (missing an ‘I’)
It‘s important to recognize the signs of grail hunting addiction and learn how to tame it. Often times when we‘re seeking out a “grail”, we let our emotions get the better of us and make a quick purchase. It‘s a rush that can be hard to resist.
To avoid the trap of grail hunting, it’s important to take a step back and get some fresh air. This will help you slow your addictive tendencies and make more thoughtful decisions.
10. Languages You Don’t Understand
The trend of minting Arabic names has been growing in popularity for the past year, with many non-Arab speakers buying domains in the hopes of selling them to a wealthy investor from Dubai. However, what these people failed to realize is that words can have drastically different meanings depending on the language or culture. Despite many warnings from the Arabic community, many of these domains are now unsalable.
If you’re considering minting or buying a domain name in Arabic, it’s important to take the time to consult with those who have a better understanding of the language. This is the best way to avoid making a costly mistake. Unfortunately, this advice may not be heeded by many, as it’s easy to get caught up in the excitement of the moment. Nevertheless, it’s the only way to ensure that you’re making the right decision.
There are No Refunds In Web3
With Web2 registrars like Go Daddy, if you register a domain that is either misspelled or is a trademark infringement, there is a five-day return policy.
With ENS if you register a domain name, it is yours until it expires. Due to the decentralized nature of ENS domains, there is no refund policy.
This has caused Web3 domain name traders to sell misspelled or worthless domains for less than what they minted the domain for.
How To Prevent Impulse Buying
Are you thinking of buying something on impulse? Before you do, take a few moments to make sure you don’t regret it later. Here are some tips to help you prevent impulse buying:
1. Ask yourself why the item is selling for so cheap. It’s a good idea to do a quick Google search of the name being sold to make sure it’s spelled correctly.
2. Check the expiration date. You don’t want to buy something that will soon be invalid.
3. Head to the ENS domains website and type in the copied text to make sure there are no special or hidden characters.
4. Have dictionary and thesaurus websites open to make sure the spelling is accurate and the words have actual meaning.
By taking the time to do a few quick checks, you can save yourself the hassle and potential regrets of impulsively buying something that isn’t quite right.
When it comes to buying and selling domains in a Web3 setting, it is important to remember the same rules and steps apply as it does in Web2. Quality and math are essential for success, and a good domain name can be the foundation for a great brand.
However, it is important to remain objective and not be impulsive when making your decision. Do your research, and be sure to listen to the right people. In the end, it is important to remember that buying a domain in a Web3 setting is a permanent action, so choose wisely.