In mid-May, it has been one year since the launch of the CZ domain auctions run by our Association. This is certainly a good occasion to evaluate how this change in the domains’ life cycle is performing and how it has affected the operation of the domain registry in general. We surely have enough data to do so.
As it was mentioned many times before, the main goal was to make the domains released from the registry (after expiration or deletion) available to a wider range of interested parties. Before the auctions were launched, only a few entities got access to such domains by ‘dropcatching’ them with a high success rate thanks to automated systems set up for this purpose. There was no real chance for a common bidder to acquire a more attractive domain directly. Instead, they usually had to approach the entities that dropcatched such domains. This has changed quite fundamentally thanks to auctions, and I will give some actual examples of this. Some of them are from publicly available auction statistics. As the chart below nicely shows, the number of unique bidders in each month varies between 150 and 200. (The data for both months of May is not for the whole month; uniqueness is judged in that month, taking advantage of the fact that only identities verified by MojeID or EU eID can bid).
Over the first year, more than 1,500 unique bidders took an active part in the auctions (note that it is not a simple sum over months, as some bidders were active repeatedly). Of these, 97% were from the Czech Republic, but the auctions also sparked interest in Estonia, Latvia, Germany, Bulgaria, Poland, Sweden, the UK and Slovakia. The number of unique winners (more than 1,100), while naturally being lower, also confirms the fact that the domains being released are widely available. Two thirds of the winners came to the auctions for only 1 domain and the price of almost half of the auctioned domains was equal to the starting price, i.e CZK 100 (~ 4 EUR), as can be seen in the next graph. The low price of most of the auctioned domains and the possibility to get the domain directly are the main drivers of bidders’ interest in our auctions. The average price of a domain at auction during the first year was CZK 1,335 (50 EUR).
However, the auctions also very significantly affect the number of repeated registrations after the release and subsequently the change of holder in a short period of time after the repeated registration. As the next chart shows, after the auctions were launched, the number of domains registered within one day of their release (dropcatched domains) dropped by 60%. And 80% fewer domains changed holders (within 1 month of re-registration) than before the auctions started.
A more comprehensive assessment of the impact of auctions on the entire domain registry ecosystem must also include a look at how they changed the traffic on the EPP protocol, which registrars use to communicate with the registry. The drop in traffic was indeed noticeable and was particularly related to requests such as CheckDomain, CreateDomain and InfoDomain, which are also used for dropcatching. In the graph below you can see that traffic on EPP (with the above request types) dropped 5-10 times! This is due to the nearly total elimination of ‘fight’ requests after the auctions started. By ‘fight’ requests, I mean those where at least 100 requests (again, of the same type) are directed to a single domain from a single registrar in a single day. Massive domain capturing using huge number of EPP requests lost its meaning after the auctions started. Why invest in domains that have been ‘snapped up’ by bidders? Due to the decrease in ‘fight’ traffic, in the near future we will be able to increase the minimum unpaid number of EPP requests available to registrars per month.
I was also curious to see how the percentage of renewed domains has changed. It is still too early to make an objective assessment here, and the wholesale domain price increase starting this March certainly played a role. However, there has certainly been a change in the trend during the last year and we have started to see a rise in the renewal rate again, which has also had a positive effect on the growth in the total number of domains.
I’ll throw in just a few more interesting numbers. More than 165,000 domains were auctioned during the year, of which more than 5,400 had at least 1 bid, so about one in 30 domains was of interest to bidders. The priority right to register a domain name won at auction was paid for in 98% of cases, of which 93% eas used for domain registration using this right. On average, 15 domains were auctioned per day, with the highest number on the first day of the auctions – 58, while on two days in the first year we recorded only 2 domains auctioned. The average number of bidders per auction was 2, with the most attracted by the auction of the miminko.cz domain, namely 13. The average number of bids per auction in the first twelve months was 8, with the most attracted by the auction of the nejlepsipujcky.cz domain, namely 162. Although more than half of the auctions were prolonged due to last-minute bids, the number of those going on past midnight was just a handful. The youporn.cz auction lasted the longest ever, ending at 2:09, but the prumyslove-haly.cz auction also took a long time, finding its winner at 0:44.
Here are the domains that were most popular, with prices: virtualnisidlo.cz (152,077 CZK ~ 6,000 EUR), wgz.cz (121,000 CZK ~ 4,800 EUR), zuno.cz (119,888 CZK ~ 4,700 EUR), ergo.cz (113,000 CZK ~ 4,500 EUR), mypage.cz (101,000 CZK ~ 4,000 EUR) and legal.cz (100,000 CZK ~ 4,000 EUR). We publish the prices of all auctioned domains in the Domain Browser, as well as the number of bidders and bids, since transparency is crucial for the trust of bidders.
After one year of operation, the auction system is not the same as it was at the time of deployment. Its operation required, for example, the optimization of processing of payments and payment documents. In addition to the original single method of bidding via a set limit, we have added the option to set a limit before the auction starts, but also to enter a visible bid, which, while revealing the bidder’s cards, can also speed up the auction. The list of domains in auctions is also available in JSON format, which was requested by registrars, we now sort the domains in the lists much more intelligently, and we’ve started enforcing two-factor authentication when logging into the Domain Browser to increase bidder’s security. Other changes are either freshly deployed (extensive redesign of the Domain Browser or streamlined work with EU eID) or are still to come. Among those that are close to implementation, I will mention the launch of systematic collection of feedback from bidders, which we plan to use for further development of the system.
Domain auctions have proven to be a functional and fair system for those interested in released domains and have also helped to calm down the registry traffic considerably. They have become a solid part of the domain infrastructure and deserve further development, not least because other domain registries are also interested in their operation. I would like to thank my colleagues who are involved in the operation and maintenance of the FRED auction extension and I believe that further work on it will be at least as exciting for everyone as it has been so far.