By Ole Tange <email@example.com> and Hans Schou <firstname.lastname@example.org>
Reason for this document
The Internet has gotten a reputation for being a wild west like
community: Whoever gets a good domain name can sell this domain with huge
When a whole new world is set free (i.e. a new TLD) there will be a rush
on getting the good names that no one has any legal right to in the second
level domain (e.g. car, business, tv). Therefore the registration rate
during the first days will be so high that capacity is exeeded.
The only one benefiting from the scheme is the ones that gets the good
domain names. The winners will be the companies with the best automated
registration system who will then sell the names to those who really are
going to use them.
It would be much better if the rate registrations were to accelerate
slowly so capacity could be adapted to the current flow.
The Dutch sale technique
The Dutch sale is a technique for selling much like auctioning. But with
autioning it is hard to jugde when to stop asking for bids. Also autioning
is not good when you have an unlimited number of items (i.e. domain
The Dutch sale works by setting the start price very high. Preferably it
should be so high that no one will pay the start price.
After some time the price is reduced. If no one buys the price is reduced
further until someone buys.
The exponentially Dutch sale technique
The exponentially Dutch sale is just a specialisation of the Dutch
sale. The reduction in price is done continuously and not in steps.
The price will never reach 0 but will slowly get closer and closer to 0 as
The formula for exponentially Dutch sale could be:
p1 = price at start of sale
p2 = price at time t1
t1 = time when price p2 should be reached
t = current time
p = current price
p = exp( ln(p2/p1)*t/t1 ) * p1
p1 = 1000'000'000
p2 = 1
t1 = 12
| t | p |
| 0 | 1000000000 |
| 1 | 177827941 |
| 2 | 31622776 |
| 3 | 5623413 |
| 4 | 1000000 |
| 5 | 177827 |
| 6 | 31622 |
| 7 | 5623 |
| 8 | 1000 |
| 9 | 177 |
| 10 | 31 |
| 11 | 5 |
| 12 | 1 |
Why this works
By setting the start price very high no one wants to buy at once. However,
when the price nears the point of value the good domains the buyers will
slowly start to show.
Everyone is welcome to either buy now or wait. But if you wait for a lower
price someone else may have bought the wanted domain at the higher price. Therefore you will probably give the most the domain is worth to you. Cyber squatters will suddenly be forced to pay the current bid and will not be able to buy thousands of domains for reselling because if the domain was worth more it would already have been sold.
As several .com domains have been sold in the price range of several
millions the start price should be significanly higher.
We propose using 1'000'000'000 as a start number and end with 1 after a
year. After the first year the price may just vanish because all good
domains will have been sold long before this.
Who got here first
The perpetual problem is ofcourse: Who bought it first?
We propose the following guidelines for resolving this:
Payment will ofcourse be refunded if no buy is made.
- The domain is bought by when the first payment larger than the
current price is received.
- If payment is recieved from two parties at the same time, the party
paying more is the buyer.
- If two parites pay the same amount at the same time, the party with the
lowest tracking number is the buyer.
Who should get the payment?
The receiver of the payment should be a foundation. The mission of the
foundation will be to enhance the Internet. Part of this could be by:
It would be reasonable to assume that the Dutch sale will generate enough
renevue to fund the running of the TLD for eternity. The Dutch sale will
thereby be an asset for the TLD.
- Funding the running cost of DNS for the TLD in question.
- Funding international NICs (IANA, ICANN and perhaps ARIN, RIPE, APNIC
- Instituting a price for new, revolting inventions made freely available
for the Internet (a bit like the Nobel-price for Internet)