Web3 domains such as ENS and Unstoppable Domains have shown strong growth recently amid the overall downturn in the NFT market. With over 2 million domains registered and a growing user base, Web3 domains present a huge opportunity for investment and utility. This article analyzes the trends, valuation metrics, and outlook for investing in this emerging digital asset.
Web3 domains outperform wider NFT market
While the NFT market has declined over 74% in recent months, Web3 domains like ENS and SPACE ID continue to see increasing transaction volumes and market valuations. For example, ENS saw 22% month-over-month growth in trading volume and 39% growth in market cap over the last 3 months. This outperformance highlights the strong demand and real-world utility offered by Web3 domains.
Large & growing user base signals future potential
With over 2 million domains registered across top providers like Unstoppable Domains and ENS, and hundreds of thousands of active users, Web3 domains have a large audience to market to. As more apps integrate domain name functionality, that built-in audience can drive further adoption and transactions. Additionally, low domain purchase costs appeal to a wide range of retail crypto investors.
Core infrastructure for an interoperable web3
Web3 domains serve as important identity credentials that users can leverage across blockchains and applications. By mapping a human-readable domain name to a crypto wallet, users can seamlessly transact and participate in web3 without complicated wallet addresses. As more apps support domain name logins and transactions, domains become indispensable infrastructure.
With strong recent growth, a large user base, and expanding utility as an identity layer for web3, Web3 domains like ENS and Unstoppable Domains present an attractive investment opportunity compared to struggling NFT collections.