As GDPR takes effect, Escrow.com reports the lowest volume of sales since the start of LXDO.
Welcome to the 9th edition of the Liquid Domains Overview (LXDO), which focuses on the 614,928 .com domains we call “liquid”. The objective of the report is to present key statistics and generate a debate amongst the industry stakeholders about the fair value of such domains. We hope you enjoy it and we encourage your feedback and participation for the next reports.
DEVELOPMENT INDEX AND OWNERSHIP DATA
Development index fell over 1% to 12.82%, the lowest level ever recorded in our report, signaling a clear downward trend since 2016. The categories that su!ered the most were the numeric domains, in particular, 3Ns, 4Ns, and 5Ns. 2Ns. The letter domains remained relatively stable, with 3Cs being the only category gaining new developments. 3Cs also recorded a small increase in the 5th percentile value (+4%) and a sizable (38%) median price increase in disclosed transactions.
The inception of the GDPR last May brought signi#cant changes to the ownership data. For the #rst time, we recorded a drop in Chinese ownership, coupled with a sharp decrease in the number of domains associated with European registrants (down to 4.6% from 7.4%). This could be easily explained by the new privacy rules a!ecting European owners. The gainers were the “rest of the world” (+4%, from 7.7% to 11.7%), the N/A category and, in small measure, the US, which gained 1%. China remains the largest owner of liquid domains with 165,000 domains associated with Chinese registrants.
In Q2, Escrow.com recorded $12M in transactions, with the strongest categories being the 3Ls ($4.8M) and 4Ls ($4.3M). These values are in line with last quarter and signal a notable growth in the 3Ls category. The largest drop came from the 2Ls .com which did not register any Escrow.com, nor any other public transactions in Q2. ShortNames.com recorded $5.4M in transactions, with the most traded categories being 3Ls, 4Ls, and 5Ns, respectively at $1.4M, $1.6M and $1.3M. The 5th percentage values gave us mixed signals: on one hand 5Ns and 3Ls showed record increases (+56% and +31%), on the other, 4Ls – the category which accounts for 75% of all liquid domains – dropped 13%. The median values of disclosed transactions also recorded very large decreases in almost all categories. This calls for caution in view of the early Q3 results which are indicating sharp valuation drops for Chinese premium 4Ls.
A signi#cant decrease in the wholesale value of Chinese Premium domains might signal that the tide is shifting away from China and back to the West. Chinese owners might start to #nally sell inventory. Once again, we expect Western investors and end users to focus on the most premium liquid domains when looking at buying opportunities: speci#cally, acronyms with Western Premium letters and Keyword domains. We retain our recommendation for investors to focus on quality over quantity.