The Next Wave of Tokenization: Why Internet Domains Are a Missing Piece
Tokenization has focused on familiar securities. A more interesting opportunity lies in digital asset classes like internet domains, where value exists without a market to support it.
Author: Fred Hsu, co-Founder and CEO at D3.
Tokenization has mostly focused on bringing familiar assets like treasuries, funds, real estate, and private credit onchain.This work is important and is already reshaping how capital markets infrastructure is built and how institutions approach settlement and collateral. Onchain real‑world assets are now above $29 billion in value and growing at a steady pace month over month. It also raises a different question about tokenization: where it can begin to reshape how an asset class is priced, traded, and financed in the first place.
Internet domains are one such market and are the most overlooked.
When Infrastructure Gets Built
Major financial infrastructure builds don't happen by accident. Clearing houses emerged when the risk of bilateral settlement got too high to ignore. Electronic exchanges arrived when trading floors couldn't handle the volume. Each time, the build happened because the cost of doing nothing finally outweighed the cost of changing everything.
The signals that preceded each build were consistent, and they are showing up in the domain market today. The technical infrastructure, registries, Domain Name System (DNS), and registrars have worked well for decades. What hasn't been built is the financial layer on top of it.
A Market Without a Price
When AI.com was acquired for around $70 million, the largest disclosed domain sale on record, it made headlines but not a market. There is no centralized price record for domain transactions. Domains trade over-the-counter through a fragmented network of brokers and registrar marketplaces, each running their own private data. A domain that sold three years ago has left essentially no public price trail. Every deal is a negotiation where whoever has more market knowledge wins, and that advantage rarely sits with the buyer.
Markets that have gone through this shift have consistently grown as a result. Price transparency makes transactions fairer and improves how markets function. It brings in participants who previously stayed out because they couldn't trust what they were seeing. Consider what the real estate market looked like before the MLS created a standardized, public record of transactions and comparable sales. Without it, pricing was local and buyers and sellers were largely dependent on whoever happened to hold the information. The MLS expanded the market by making it legible to participants who previously had no reliable way in. The domain market is at a similar starting point, but the infrastructure that would trigger that same shift has not been built yet.
Built for Administration, Not Finance
Buying or selling a premium domain today involves a broker, escrow, the receiving registrar, and potentially a transfer agent, each taking fees, each adding time. Settlement can take days or weeks. For a buyer acquiring a domain to build on, that friction is manageable. For any scenario requiring faster trading, collateralized lending, short-term financing, or market-making, the transaction economics simply don't work. This friction is a legacy of when domains were not an asset class but an administrative function dating back to the 1990s.
Value Without Infrastructure
There are over 380 million registered domain names, most of them sitting unused. A domain owner cannot use a premium name as collateral for a loan through any conventional financial channel, and there is no straightforward way to generate yield from assets that aren't actively being developed. The value is there, but the financial infrastructure to access it isn't.
What makes domains well-suited for this kind of build is that the technical groundwork already exists. They are digital by nature, registered through a globally standardized protocol, and recognized as property across jurisdictions without the complications that come with physical assets. What's missing is a modern financial layer on top of that foundation, one that allows the value sitting in domain assets to move.
The Pattern Extends
The domain market represents something specific. It is a large, established asset class that has never had the financial infrastructure its scale warrants. Other markets share that condition, and those are where the next build tends to happen.
Real estate is the clearest comparison. The MLS standardized data and created price transparency. Zillow and Redfin built on top of that foundation and brought in an entirely new category of participants who had previously found the market too confusing and fragmented to engage with confidently. The result was a structurally larger, more liquid market where prices became more accurate because more people could see them.
The domain market has not had its MLS moment yet. What comes after that depends on whether the underlying infrastructure gets built with institutional participation in mind. The assets and the value are already there. The market structure is not.
About the Author
Fred Hsu is the co-Founder and CEO at D3, a company focused on bringing internet domains onchain through Doma Protocol.
Fred has over 25 years of experience in the domain industry, building systems that support millions of domains. His work spans traditional domain systems and blockchain, focused on improving how domains are transferred, managed, and used.
