Unlocking Web2 Domain Real Estate: How Doma Protocol Is Bringing $360B in Assets to DeFi

The domain name market has long operated in the shadows of crypto innovation. With over 368 million domains registered globally and a secondary market worth hundreds of billions, digital domain real estate remains one of the internet’s most underutilized asset classes. Today, Doma Protocol changes that equation by launching its mainnet — introducing a DNS-compliant infrastructure that tokenizes traditional Web2 domains into liquid DeFi assets.

The $360 Billion Asset Class Nobody Could Trade Efficiently

Domain names represent a paradox: they’re ubiquitous, valuable, and yet stuck in legacy infrastructure. According to Hostinger’s latest data, the domain registration landscape is massive. Yet the resale market tells a different story. Public records from NamePros show that in 2024, only around $185 million in domain resales occurred across 144,700 transactions — despite the sector’s trillion-dollar potential when considering brand value and digital real estate holdings.

The core problem is liquidity. Most domain transfers require weeks of escrow arrangements, brokerage intermediaries, and restricted buyer pools. A $10 million .com domain might take months to find a buyer. Premium domain real estate like software.ai or crypto.eth sits underutilized because the infrastructure for fractional trading and programmable ownership never existed.

This fragmentation is precisely what drew developers to explore blockchain solutions. Domain tokenization now emerges as a legitimate real-world asset (RWA) category within DeFi.

Doma’s Architecture: Layer 2 DNS Infrastructure for Domain Real Estate

Doma operates as an OP Stack Layer 2 with cross-chain reach through LayerZero integration, connecting Base, Solana, Avalanche, and ENS into a unified domain tokenization ecosystem. Rather than creating an alternative DNS system, Doma works within existing regulatory frameworks — a critical distinction from projects like Unstoppable Domains or Handshake, which attempted to reimagine the namespace itself.

At mainnet launch, users can tokenize premium Web2 domains (.com, .ai, and others) as ERC-20 tokens. This unlocks three capabilities previously impossible: fractional ownership of expensive domain real estate, secondary market trading with institutional liquidity, and programmable utility within DeFi protocols.

The infrastructure introduces two new token standards:

• Domain Ownership Tokens (DOTs): Represent outright domain ownership
• Domain Service Tokens (DSTs): Enable utility-based access while preserving original ownership

Michael Ho, CBO at D3 Global, captured the value proposition: “Domains have always been among the most undervalued internet assets — historically illiquid, slow to transfer, and only accessible to well-capitalized buyers. Doma makes these assets programmable and tradable, turning static digital real estate into a liquid market.”

Testnet Validation: 35 Million Transactions Across 1.45 Million Addresses

Before mainnet, Doma ran a 5-month testnet that demonstrated genuine demand. The test environment processed over 35 million transactions and attracted 1.45 million unique addresses. More significantly, 200,000+ domains were successfully tokenized during the testing phase, with live examples like software.ai showing fractional trading in action while maintaining full DNS resolution.

This validation suggests the market sees domain real estate tokenization as more than speculation — it’s a genuine infrastructure need.

Developer Momentum and Liquidity Building

A $1 million developer fund (Doma Forge initiative) is already accelerating integrations and experimental DeFi protocols built on top of the mainnet. Early adoption shows roughly 2,700+ mainnet addresses activated at launch, with $183,000 in total value locked as the ecosystem bootstraps.

The Doma App — launching shortly after mainnet stabilization — will introduce:

• Yield farming on domain token pools
• Lending protocols using tokenized domains as collateral
• Liquidity aggregation across chains

Success hinges on whether domain holders view tokenization as a viable exit strategy or income stream, and whether DeFi investors embrace domain real estate as yield-generating assets rather than collectibles.

Why ICANN Compliance Matters

Unlike alternative namespace projects, Doma operates in full partnership with ICANN registrars representing over 30 million domains. This compliance-first approach means domain real estate remains regulated, insurable, and legally binding — removing a major barrier to institutional adoption that plagued earlier blockchain domain experiments.

The result: a liquidity solution for an existing, battle-tested asset class, not a namespace revolution.