What exactly is Domain Tokenization?

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Tokenization is the process of converting physical or non-physical assets into digital tokens. It is like transforming ownership rights of an asset into tokens. It is the new way of financing in the blockchain.

The application of tokenization is evident in payment transactions among participants as it also creates multi-party ownership of assets. Tokens also provide an easy way to transfer ownership of assets.

A domain name is like an asset, I can call it real estate in the digital world. Just like you have your real estate buildings as a physical asset, a domain name is a digital asset that can be tokenized.

Combining domain name as an asset and the definition of tokenization, we can say domain tokenization is the process of transferring domain names into a digital token for better ownership and shared ownership. Asset tokenization has been used since the 1970s for converting customer information into strings of non-sensitive characters for security.

Why Do you need to Tokenize your Asset?

Let us use real estate as an example: You have an apartment worth $100,000 and you are in need of $20,000. Can you use your current apartment to get the money you need? This is where blockchain tokenization comes in, let us look at how tokenization works here aside from the fact that it helps in the conversion of ownership rights.

Asset tokenization can help convert $100,000 worth of the apartment into 100,000 tokens which means each token will carry a 0.001% share of the apartment. If a user purchases a token, the user has a 0.001% share of the apartment. On the other hand, purchasing 80,000 tokens entitles an individual to ownership of almost 80% of the concerned asset.

Tokenization enables better liquidity, faster settlements, and reduced costs easily without any concerns.

Domain Tokenization

Assuming you love pets and you want to create a website where people can see pets and like their pictures. You get the domain name say petlovers.com and put in some content, then your website is up.

What if you tokenize that domain name and offer a portion of ownership to your friends who are also pet lovers?

Let’s say you offered 100 of your friends a portion of ownership, which means you have 100x the number of people who have an economic incentive to contribute to the growth of a site, by adding content and promoting it.

So when someone comes to get the domain name, he won’t just get it from one person, but from everyone that owns the domain name with revenues allocated based on fractional ownership.

That is domain tokenization and thankfully, through tokenization, an existing asset like a domain name can be owned by multiple people.

How to Tokenize Your Domain.

Coudname is one of the leading platforms to trade and tokenize your domain name via NFTs(Non-fungible tokens) and it runs on multichain on Ethereum, Solana, Polkadot and Binance to allow free flow of assets and communication between networks.

You can join the community to get your first CNAME tokens.

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What exactly is Domain Tokenization? was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.