Voting period: 7 days
Categories:
Social Proposal
Request for Action
Constitution Amendment
Abstract:
Building on the foundation of P-016 (recently passed), this proposal introduces a strategic pricing model for five-character domains to unlock immediate revenue potential while fostering sustainable long-term growth. By incrementally adjusting prices from 1 tez per year to 6.25 tez per year over a 24-month period, this plan is designed to maximize upfront cash flow through early renewals and multi-year commitments. Rooted in proven behavioral economic principles, including loss aversion, framing effects, and prospect theory, the model incentivizes users to act early by emphasizing the advantages of securing lower rates today while illustrating the implications of future price increases.
This initiative addresses the platform’s immediate financial needs while serving as a live evaluation of price elasticity and user behavior. Insights gained from this rollout will guide subsequent proposals to refine pricing strategies for other domain categories, ensuring data-driven, long-term value optimization. The implementation builds on the hard work and progress achieved through P-016, reinforcing Tezos Domains as a key economic driver in the ecosystem. These actions not only secure immediate financial gains but also position Tezos Domains as a cornerstone for sustainable ecosystem growth.
Rationale:
The five-character domain category represents the platform’s most widely registered and engaged segment, making it the optimal starting point for implementing dynamic pricing adjustments. A gradual, predictable increase in pricing aligns with behavioral economic principles, leveraging user tendencies toward loss aversion and the psychological framing of cost incentives to drive renewals and multi-year commitments. This method ensures robust revenue generation while minimizing user alienation, which can occur with abrupt price hikes.
Additionally, the incremental approach provides a controlled environment for evaluating demand elasticity and framing effects. These insights are critical for refining pricing strategies for other domain categories outlined in P-016, ensuring that future adjustments are data-driven and aligned with market dynamics.
By focusing on five-character domains, this proposal addresses immediate revenue needs and lays the groundwork for sustainable economic growth, continuing the progress initiated in P-016 while preserving the platform’s long-term potential.
Details:
This proposal introduces a structured approach to implementing incremental pricing for five-character domains, leveraging behavioral economic principles and market data to maximize immediate revenue and inform future decisions:
- Incremental Pricing Rollout:
- Gradual price increases from 1 tez/year to 6.25 tez/year over 24 months.
- Predictable adjustments (e.g., 1.25 tez in Month 1, 1.50 tez in Month 3) create urgency for renewals and incentivize multi-year commitments without disrupting user behavior.
- Behavioral Economic Principles in Action:
- Loss Aversion: Users act early to secure lower rates, driving renewals and long-term registrations.
- Framing Effects: Incremental increases emphasize opportunities to save, prompting engagement.
- Prospect Theory: The predictable model balances perceived risks and rewards, encouraging proactive renewals.
- Market Data Evaluation:
- The rollout will test price elasticity and user behavior, providing actionable insights for optimizing demand and revenue.
- Behavioral data will guide future pricing adjustments for other domain categories.
- Building on P-016:
- Succeeding and detailing the groundwork of P-016 by advancing its vision for a sustainable pricing model, while focusing on the five-character domains for an informed, phased approach.
- Future proposals will address pricing adjustments for other domain categories based on findings from this implementation.
This approach ensures immediate revenue generation, minimizes market disruption, and provides a data-driven foundation for scalable and sustainable growth.
By implementing this targeted pricing strategy, Tezos Domains can achieve immediate financial gains while building a foundation for future success. Subsequent proposals will address the broader pricing adjustments in alignment with the platform’s evolving needs and opportunities.
Specification:
Action #1: Implement Incremental Pricing Adjustments for Five-Character Domains
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Start Date: The incremental pricing adjustments will begin on January 1, 2025
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Initial Price: Five-character domain pricing will start at 1 tez/year
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Pricing Progression: Prices will increase incrementally over 24 months, reaching 6.25 tez/year. Specific milestones include:
| Month | Price per Domain (Tez) | Increment | % Increase from Previous | Expected Outcome |
|---|---|---|---|---|
| Month 0 | 1.00 | - | - | Generate awareness of upcoming changes. Early renewals. Highest 2 months of revenue begin. |
| Month 1 | 1.25 | +0.25 | +25% | Early renewals; those who missed out don’t want to miss out further; highest revenue month expected. |
| Month 3 | 1.50 | +0.25 | +20% | Continued strong renewals driven by urgency. |
| Month 6 | 2.00 | +0.50 | +33% | Continued multi-year registrations stabilize revenue. |
| Month 9 | 2.50 | +0.50 | +25% | |
| Month 12 | 3.00 | +0.50 | +20% | Anticipated long-term renewal spike ahead of further increases. |
| Month 15 | 4.00 | +1.00 | +33% | |
| Month 18 | 5.00 | +1.00 | +25% | |
| Month 24 | 6.25 | +1.25 | +25% | 5-character domains reach 6.25 tez/year, aligning with a consistent 4x multiplier across tiers and correcting the current 25x imbalance. |
Action #2: Communication: Announce pricing changes at least 30 days in advance to inform users and encourage early renewals or multi-year commitments.
Action #3: Collect and Analyze User Behavior Data
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Focus: Monitor user behavior and revenue impact during the pricing adjustments, including:
• Renewal rates at each price increment
• Adoption rates for multi-year commitments
• Total revenue generated per pricing milestone -
Reporting: Compile findings to inform future proposals addressing pricing adjustments for other domain categories (e.g., 4-character, 3-character)
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Timeline: Data collection will occur continuously during the 24-month pricing period, with interim reports provided to the community at regular intervals
By executing these actions, this proposal ensures a strategic and informed approach to achieving both immediate revenue goals and sustainable financial growth for Tezos Domains.
