Problem Statement The existing domain services in the digital realm operate on a simplistic economic model, where uniqueness escalates value, leading to speculative behaviors. Individuals often acquire domains, not for utility but for the purpose of reselling them at exorbitant prices in the market. This practice creates a significant barrier for genuine users who intend to use these domains for their actual purpose. The need for a fair-pricing mechanism in domain services is not just apparent but essential for enhancing user experience and equitable access.
Solution: Introduction to the Harberger Tax Model To address this issue, we have developed the meETH Domain Service, leveraging the principles of the Harberger Tax system. This model introduces a self-assessed tax system for property or assets, where the owner declares the value of their property and pays taxes based on this self-evaluation. The pivotal aspect of this system is that the owner must be open to selling the asset at the self-assessed price. This unique feature encourages owners to assign a realistic value to their property, creating a balanced and fair pricing ecosystem.
meETH Domain Service: Enhancing User Experience through Fair Pricing In the meETH Domain Service, domains with less than 8 characters are considered unique and are subjected to the Harberger Tax process. Those with 8 or more characters follow a conventional naming service model. Let's illustrate with an example:
Scenario: Alice wishes to acquire the domain 'alice.me'. She approaches the domain contract and initiates a minting function. If 'alice.me' is already owned by someone else, minting is not possible, but purchasing is still an option (details to follow). If the domain is available, Alice needs to provide three key inputs: the desired domain name, her self-assessed fair price for the domain, and the amount she is willing to pay initially.
Behind the Logic: The system requires Alice to pay Harberger tax to maintain ownership of the domain. Each tax payment extends the expiration date of the domain. The tax price fluctuates based on various parameters and is underpinned by optimized mathematics. Setting an unrealistically high fair price leads to higher tax liabilities, hence, domain owners must be cautious in their valuation.
The Brilliance of the System: Now, let's introduce Bob, who desires 'alice.me' intensely. In this scenario, Bob can forcibly acquire the domain from Alice. However, the process is not straightforward. Bob inputs the remaining duration of the domain, his fair price, and obtains a buyPrice from the function, typically much higher than normal. If Bob agrees to this elevated price, he can take over 'alice.me', with the buy price compensating Alice. This mechanism ensures no perpetual guarantee of domain ownership; if the fair price is set too high, the owner incurs significant tax, if too low, the domain is easier to acquire forcibly. Hence, owners are incentivized to assess their domain's fair price accurately.
Conclusion: Revolutionizing User Experience in Domain Services The meETH Domain Service revolutionizes the domain market by enforcing realistic pricing through the Harberger Tax model. This approach ensures that domain prices reflect their true value, significantly enhancing user experience and creating a more equitable digital domain market. This system not only democratizes domain ownership but also aligns it with genuine utility and value.
There is two seperate name infrastructure. One of them is the normal NFT identitiy and the other one is Harberger NFT identity. The main identity and Harberger logic is located on the Smart Contracts. And for the wallet infrastructure Web3Modal used. In frontend development Next.js is used.