Usability versus collectibility in NFT: The case of Web3 domain names

• Main Authors: KE, Ping Fan, LAU, Yi Meng
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2024
• Subjects: NFT; Web3; Domain Name; Usability; Collectibility; Databases and Information Systems
• Online Access: https://ink.library.smu.edu.sg/sis_research/9218; https://ink.library.smu.edu.sg/context/sis_research/article/10224/viewcontent/CSWIM2024_paper_153__1_.pdf
• Institution: Singapore Management University

This study examines the market’s inclination towards usability and collectibility aspects of Non-Fungible Tokens (NFTs) within Web3 domain name marketplaces, drawing insights from resale records. Our findings reveal a prevailing preference for usability, as evidenced by consistently higher average resale prices observed for Ethereum Name Service (ENS) domains compared to Linagee Name Registrar (LNR) domains. However, domains with diminished usability, such as those containing non-ASCII characters, tend to attract investors due to their enhanced collectibility. Our analysis on the effect from previous resale suggests a potential aversion towards second-hand acquisitions among NFT investors when value derives primarily from usability, while speculative value escalates with increased trading activity for collectible-focused NFTs.