In the metaverse, the wallet is the key. The encrypted wallet is based on blockchain technology, which should ensure a high level of security (provided you do not leave your password lying around). Holding such a wallet is essential for storing digital assets: data, artworks, cryptocurrency, or non-fungible tokens (“NFTs”) . A wallet holder can also use it to create and distribute “digital assets”. One can assume that a person (natural or legal) wishing to interact in the metaverse needs a wallet. The multiple essential functions of the crypto wallet lead to placing it at the heart of the financial system of the metaverse. The plate is gargantuan! Hence the immeasurable interest in the .WALLET top-level domain or top-level domains and the battle for its control, or rather… their control.
Two young startups are fighting for the .WALLET, Unstoppable Domains and Handshake via an intermediary of the latter called “Gateway” (Unstoppable Domains v. Gateway Registry, James Stevens, and Does 1- 100, USDC, Delaware). Unstoppable Domains battles to preserve its monopoly on the distribution of alternative .WALLET domain names, whereas Handshake/Gateway hopes to glean a few or more market shares. And all the others, envious spectators (“why didn’t I think of the .WALLET before?“) who carefully scrutinize the outcome of the dispute in the hope of creating another .WALLET alternative.
A brief chronology of the facts helps better understand the problem.
It emerges from the deleterious exchanges that, on both sides, it is the investment that they intend to protect. Gateway relies, on the one hand, on the absence of a valid “.WALLET” or “WALLET” trademark and, on the other hand, on freedom of trade and industry. Unstoppable Domains places at the heart of its rhetoric the infringement of the unregistered trademark (common law) “.WALLET” and the loss of the trust it had earned with its customers and partners, trust shattered by the arrival of another .WALLET.
Indeed, the value of .WALLET domain names created at Unstoppable Domains is intrinsically depreciated. The confusion is such that some users wonder about the need to repeat the process: create a second <name.wallet>, identical to the first (<name.wallet>) to ensure exclusivity. The confusion is total.
The Internet Corporation for Assigned Names and Numbers (ICANN) is not flawless. Its administrative heaviness makes it a slow institution in perfect opposition to the precepts of its time. Nevertheless, ICANN has never allowed the occurrence of this type of problem, which is very embarrassing for domain name holders and for Internet users. Technically, in the Domain Name System, two first-level domains (or top-level domains, “TLDs”) cannot coexist. The availability of the new generic top-level domains (or “nTLDs”) came with several extrajudicial procedures aiming, in fine, to designate who was to obtain control of the coveted nTLD with regard to rules pre-established rules. The ICANN was able to anticipate the problems. Nothing like this exists in the naming system connected to blockchains. Indeed, from a legal point of view, everything is to be built. Let’s not bury ICANN, Web3 entrepreneurs have a lot to learn from this institution.
One of the first questions that come to mind is the following: can two identical “blockchain TLDs” (or “alternative extensions”) coexist? Technically, there are no obstacles. Legally, if a judge would uphold the monopoly theory, what would be the basis for it? A trademark prior to the creation of the TLD by the second entrant (first come, first served)? That’s what Unstoppable Domains hopes. The primary trademark bonus is a universal and effective mechanism. It should therefore impose itself without obstacle. However, the economic operator waving a trademark to exclude a competitor can, in principle, obtain satisfaction only if the trademark in question is valid, that is to say, among other requirements, neither descriptive nor generic. The reason is fundamental since it is a question of preserving the freedom of trade and industry. The monopoly granted to the trademark owner is only an exception to the principle of freedom. That said, given the judgment of the US Supreme Court in the booking.com case, expect anything! Conversely, if a judge would prefer the theory of coexistence allowing duplicates, or even triplets, blockchain domain operators would feel free to immediately offer .WALLET or .COM blockchain domains. Although consistent with the freedom of trade and industry, the preference for the theory of coexistence would inevitably lead to the following question: is this really desirable? When this question is raised, the legislator is not far. Which legislator? Legislating at the domestic level as the metaverse grows day by day would be fruitless. Going through bilateral instruments would be complex and tedious; it would take decades. As for the multilateral treaty, which is just as complex, it would at least have the merit of offering a faster and more homogeneous response. Another solution would be for issuers of alternative domain names to i) unite around a code of ethics and ii) work with ICANN to determine, contractually, what is desirable and what is not. Imbroglio!
