Is Web3 better than Web2 for investors? Evidence from domain name auctions

• Main Authors: KE, Ping Fan, LAU, Yi Meng, HANLEY, Daniel Varghese
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2023
• Subjects: Web3; domain name; auction; platform; investor preference; Information Security
• Online Access: https://ink.library.smu.edu.sg/sis_research/8336; https://ink.library.smu.edu.sg/context/sis_research/article/9339/viewcontent/Is_Web3_Better_Than_Web2_for_Investors__pv.pdf
• Institution: Singapore Management University

Blockchain-based assets are commonly believed to attract new investors. To investigate this claim, we compared investor preferences for Web2 and Web3 domain name auctions by analyzing daily auction patterns in Namecheap and OpenSea. Our results indicate that Web3 platforms may attract extreme investors with low or high values as a niche market. We found a significantly higher number of bids per auction, higher average bid prices, and greater price spreads on OpenSea, but a significantly lower number of unique bidders per auction. Our findings highlight the importance of considering the auction platform's characteristics and asset context when evaluating bid patterns and predicting bid prices. This study serves as a starting point for future research in this emerging market and offers directions for further investigation.