A virtual land rush for NFT internet domains, which use public blockchains that give users complete ownership of their data, helped one of the few companies that set up such sites claim a $1 billion valuation today.
Unstoppable Domains raised $65 million in a series A equity funding round, achieving so-called unicorn status. The financing was led by Pantera Capital with participants including Alchemy Ventures, OKG Investments and Polygon
Coinbase Ventures and Protocol Labs, which were initial investors in 2020, did not join in the new round.
NFT domains, the traditional kind, live on public blockchains and give users complete ownership over their data. The domains, with endings like .nft, .wallet and .crypto, can replace lengthy wallet addresses. While traditional domains require yearly subscriptions, Unstoppable charges a one-time fee that can be as low as $5.
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Beyond giving users ownership and control over their digital identities, NFT domains separate them from wallet addresses. In current transactions for cryptocurrency or nonfungible tokens (NFTs), wallet addresses serve as users’ identifiers, combining personal and financial information. That increases vulnerability to scams.
A NFT domain serves as the user’s personal address across blockchain-based applications, hosting whatever personal information the owner wishes to disclose.
“Unstoppable Domains is rapidly defining a new category of decentralized identity that will change the internet as we know it,” said Paul Veradittakit, a partner at Pantera.
The $1 billion valuation highlights the importance of infrastructure behind decentralized, digital identities, separating “the identity component from the finance component,” says Matt Gould, the Unstoppable founder and CEO.
“We work with wallets and fintech companies as our partners,” says Gould. But “we purposely do not have an exchange or any other type of business inside of our business model.”
The company largely relies on partnerships to expand its user base, providing infrastructure and custodial services to the NFT domains that can be used in over 265 applications. Domain owners control what aspects of their personal information can be gleaned, unlike the case with conventional web transactions.
Through the company’s partnerships, Unstoppable has 10 different top-level domains, including .bitcoin, .coin and .blockchain. With each new partnership, users are able to decide what on-chain and off-chain data is displayed across different apps.
There are potential downsides to blockchain-based domains. An October 2021 report by Microsoft
Nora Chan, vice president of communications at Unstoppable contended that giving users control over their own assets “prevents honeypots, protects users and will lead to a more secure Internet. Apps already filter out content that’s illegal or harmful, and they’ll continue to do so.”
Unstoppable began operations in 2019 and has so far registered 2.5 million domains, generating $80 million in revenue. Before the investment was announced today, the company had only received $7 million of funding.
The company was also ranked 39th on Forbes list of best startups employers, with its remote-only structure a key to its performance.