P-021 ACCEPTED: Pricing structure change #3: Choosing options

Governance Proposals
1

Voting period:

14 days

Categories:

Social Proposal
Request for Action
Constitution Amendment

Abstract:

This proposal aims to choose the 1-4 most popular price structure changes that will be voted on.

Two weeks will be provided for discussion of this proposal before putting it into the governance system with the up to 4 most popular, well reasoned options as determined by DAO delegates and general community support.

Rationale:

The Tezos Domains project needs to change its price structure in order to sustain the project while continuing to provide an affordable and stable infrastructure service to the Tezos ecosystem. The current pricing structure isn’t working and will result in the eventual running out of funds and shutting down of the project.

The price structure suggested as default by this proposal below is intended to sustain the project as-is without requiting major cutbacks to the budget.

It’s important to consider other price structure change suggestions as well as other approaches to the budget. The suggestions should be well-reasoned with sound logic and some kind of projection of income to ensure the change is sustainable for the project.

The number one goal of this DAO is to keep the Tezos domains service uninterrupted.

Details:

These details are the same ones as in P-013, except for the part which agrees that core devs have the right to keep XTZ/USD prices of domains roughly equivalent as the price of XTZ rises or falls. This has already been accepted by the P-013 proposal and will be communicated as described, if necessary in the future.

The tzc.tez delegate working on this proposal suggests the following permanent price structure for consideration by the Tezos Domains community:

Suggested Price Structure

  • 1 Character: 800 tez
  • 2 Characters: 200 tez
  • 3 Characters: 50 tez
  • 4 Characters: 12 tez
  • 5 Characters+: 3 tez

This structure ensures that 5D+ names can’t be hoarded as easily as before, while still providing an affordable option for all regular users who have and use 1-5 names.

This structure also ensures that 1D, 2D, 3D and 4D names are more affordable to register and to renew. The better affordability will allow domain name sellers on the secondary market to perform more activity

Desirable Domains

Here’s a summary of how many domains that are desired can be purchased of each length as well as the income they could generate:

1-Letter Domains

  • Letters: 26 (A to Z)
  • Numbers: 10 (0 to 9)
  • Total: 36
  • Income if 50% registered: 36 Ă— 0.5 Ă— 800 = 14,400 tez

2-Letter Domains

  • Scrabble Words: 107
  • Nicknames/Handles: ~20
  • Total: ~127
  • Income if 50% registered: 127 Ă— 0.5 Ă— 200 = 12,700 tez

3-Letter Domains

  • Scrabble Words: ~1,065
  • Actual Names: ~100
  • Nicknames/Handles: ~300
  • Special Numbers: ~15
  • Total: ~1,480
  • Income if 50% registered: 1,480 Ă— 0.5 Ă— 50 = 37,000 tez

4-Letter Domains

  • Scrabble Words: ~3,985
  • Actual Names: ~500
  • Nicknames/Handles: ~1,000
  • Special Numbers: ~30
  • Total: ~5,515
  • Income if 50% registered: 5,515 Ă— 0.5 Ă— 12 = 33,090 tez

5-Letter Domains

  • Scrabble Words: ~8,996
  • Actual Names: ~1,500
  • Nicknames/Handles: ~2,000
  • Special Numbers: ~50
  • Total: ~12,546
  • Income if 50% registered: 12,546 Ă— 0.5 Ă— 3 = 18,819 tez

6-Letter Domains

  • Scrabble Words: ~15,000
  • Actual Names: ~3,000
  • Nicknames/Handles: ~4,000
  • Special Numbers: ~100
  • Total: ~22,100
  • Income if 30% registered: 22,100 Ă— 0.3 Ă— 3 = 19,890 tez

7-Letter Domains

  • Scrabble Words: ~25,000
  • Actual Names: ~5,000
  • Nicknames/Handles: ~6,000
  • Special Numbers: ~200
  • Total: ~36,200
  • Income if 20% registered: 36,200 Ă— 0.2 Ă— 3 = 21,720 tez

8-Letter Domains

  • Scrabble Words: ~40,000
  • Actual Names: ~8,000
  • Nicknames/Handles: ~10,000
  • Special Numbers: ~300
  • Total: ~58,300
  • Income if 10% registered: 58,300 Ă— 0.1 Ă— 3 = 17,490 tez

Projected DAO Income

If half of the desirable names from 1D-5D, 30% of 6D 20% of 7D and 10% of 8D names are registered yearly, that will generate an income of 175,109 tez. When converted to USD, that will be just enough to keep operations going with some cutbacks.

It will be necessary to cut out the market making aspect of the project, via Gate.io. It will also be necessary to cut out the dev team discretionary budget which was used to implement small features. All feature changes and additions will need to have a proposal attached to them.

Current DAO Income

Shown below is the Tezos Domains quarterly income for all years based on domain length.

840Ă—264 44.7 KB

Current Project Costs

To keep the project running and to maintain all the software, including middleware, in lockstep with Tezos protocol upgrades (3X year), a professional team of developers and server operators is needed. Maintaining dozens of servers with various housekeeping needs across Mainnet and Ghostnet requires time and vigilance from the Dev team.

The operation of the Tezos Domains service has been uninterrupted for years, so the goal is to cut where possible but ensure that the quality and stability of the Dapp is preserved.

903Ă—587 17.6 KB

Suggested Price Structure Options

For 1D/2D/3D/4D/5D+

  1. 800/200/50/12/3
  2. TBD (optional)
  3. TBD (optional)
  4. TBD (optional)

Specification:

  • Schedule change with core dev (CM team)
  • Communicate to Tezos community with 30 day notice (CM team)
    • X reach out to active NFT artists
    • Announcements on all “Official” (i.e. ones most people use) Tezos channels
    • Work with Tezos Commons and Trilitech to push news about changes
  • Implement change on the announced date
    • The implementation date will be figured out alongside the core dev team and announced at least 30 days in advance.
  • Publish an official Tezos Domains blog post with the rationale for the changes

This proposal has been created on Homebase after meeting all ACTIVE criteria.
Vote on P-021: Tezos Homebase
Vote Ends: April 10, 2025 12:00 PM GMT
Proposal Passing Requirement (Request for action): 50%+ Yes votes, 10%+ TEDv quorum

2

As mentioned previously in meetings & other means of communication, my suggestion being

  • 1 Character: 512 tez
  • 2 Characters: 128 tez
  • 3 Characters: 32 tez
  • 4 Characters: 8 tez
  • 5 Characters+: 2 tez

(4X increments per character change)

This creates more affordable names. Affordability in itself is attractive.
Not only this, but no 1 & 2 character name has been registered thus far and are clearly too expensive, lowering across the board and increasing 5+ characters, in my opinion is a good way to go. We are of course never going to get pricing 100% correct with it being 100% pegged to XTZ, but it clearly needs change due to falling registrations & renewals.

The only other suggestion I would have, is covert current pricing to USD and have every domain priced at $10-20 USD (but paid in XTZ), regardless of character length. This would more than likely generate income via registrar & the secondary market & it will just be a FCFS scenario and its not exclusive to whales.

1 Like
3

The pricing structure suggested is already pretty bullish on how many domains the project would have to sell to produce the income needed to sustain operations. I wonder how much more velocity the lower prices would have to produce to compensate for the revenue lost. On first look it’s probably around 20%-25% more sales within around a 3-5 month period.

Can I hear more thinking out loud of how the lower prices will work?

For the USD pricing, I just realized we should be looking at P-013 which technically already codified our USD pricing.

image
image1402Ă—432 31.8 KB

This almost works but will need to be added and addressed here to overturn P-013.

4

Without having the data to hand, from the start of 2025 til now, we have received only 8 – 3 character registration & renewals. We would need to add 25 – 3 character domains during this period that are paid with 32 XTZ to make up for the change, however with the price being more affordable, we should see a lot more than the 25 in comparison during a similar time period. Obviously this is theoretical, but it is quite clear given the communities retraction from registering the more expensive names and open feedback about this matter on Discord & X in the past.

But raising the 5 character + names to 2 XTZ its not as steep as 3XTZ, but in theory will increase income from renewals. Although 3 XTZ isn’t very costly, I can see people letting some names go as its obviously becoming more expensive to hold the least expensive names.

5

I support the first pricing option of 800/200/50/12/3. This structure appears to strike a good balance between maintaining value for premium domains while also making them more accessible in the current market conditions. It’s also more in line with the goals outlined in p-13.

6

Changed to P-021 ACTIVE. Proposal is now active on Homebase, locking the OP from further changes.

Voting info has been added to OP as per timestamp

7

Confirming Results of P-021:

image
image1000Ă—601 23.6 KB

8

I know people have put in real effort to move this forward, and I respect that—so I want to approach this in the spirit of collaboration, not criticism.

That said, I do want to raise a serious concern: the pricing change for 5+ character domains seems economically unsound. It’s the one part of the structure that I think needs to be revisited.

These longer names are the most widely used, renewed, and accumulated across the ecosystem. They’re the entry point for casual users, collectors, and builders alike. Tripling their cost from 1 tez to 3 tez goes against basic principles of price adjustment strategy. It contradicts the logic of encouraging broader adoption, especially if the goal is to stimulate usage and ownership.

Lowering prices on short names while raising them sharply on the most active tier sends mixed signals. It’s hard to reconcile with real-world incentives. We can’t say we’re lowering prices to drive volume, while simultaneously raising the price on the one segment that already has it. That’s an internal contradiction, and I think it deserves a second look.

I also worry that bundling all these changes together removed our ability to think strategically about each tier. It feels like a case of *action bias—doing a lot at once and hoping it nets out positively—when what we need is a more measured, surgical approach. If we’d tested a smaller bump to 1.1 or 1.2 tez and watched the data, we could have made a more informed decision.

As it stands, this change could inadvertently discourage renewals, reduce low-friction onboarding, and penalize long-time supporters who’ve been paying 1 tez year after year. That’s not the message I think we want to send—especially not when the price of tez itself is low, and early accumulation should be rewarded.

So my suggestion is simple:

Let the rest of the pricing structure stand, but let’s initiate a follow-up vote specifically for the 5+ character tier. Keep it at 1 tez for now, and if needed, revisit it later with usage data in hand.

This would show we’re capable of precision and responsiveness—two things that are essential for long-term trust and sustainable growth. Thanks again to those who worked on this. I know none of this is easy, and I hope this feedback is received in the constructive spirit it’s intended.

9

Hi Kevin,

As this proposal has already passed and been accepted, we are unable to process any changes during this stage as set out in the proposal process rules on the forum. Once changes have been implemented on May 14th, you will be able to raise a new proposal to make any changes to the new pricing structure.

I appreciate your concerns, however with lack of current help from TF(not sure on the progress), Rapid loss of XTZ value & Lack of Income, the choice to adjust pricing should’ve been something that was sorted many months ago due to the clear vision that .tez is in a steep decline and to keep the lights on we need to make changes otherwise the project will cease to exist, even with this change, unless something happens(ie. help from TF or XTZ to $5), its unlikely that we will see any change in the outcome due to the amount of time it takes to action stuff via the DAO and the fact this was stopped, mainly by yourself, in months prior to now.

Furthermore, the pricing SHOULD be pegged to USD, I have said this years ago and will always stick by it, its quite clear to see, as its not pegged to USD, the state of the treasury and cost of domains is always in question and nobody can give a good enough forecast for the future of the project due to this factor.

I really do get what you’re saying Kevin & I don’t think any of what you said is incorrect, BUT its realistically the last card we can play in this scenario otherwise we will just be counting down the days of the project, the project just doesn’t have the time left to continue with increasing in meaningful increments.

1 XTZ currently at 0.50c isnt expensive, nor is 3 XTZ currently at $1.50. The whole unaffordability aspect only comes into play when it is actually expensive to own a domain.

10

This reply actually underscores the deeper issue—not just with the proposal, but with how decisions like this are being reasoned through.

Framing the situation as “we need to do something or we’re out of time” is classic action bias. It’s the fallacy that doing anything is better than holding back, even when the action is counterproductive. That thinking leads to rushed, packaged proposals and harmful overcorrections—and that’s exactly what’s happening here.

Let’s be crystal clear: a price increase can absolutely be a valid way to raise revenue . But a sudden 200% increase on your highest-volume tier is not that. That’s how you destroy revenue.

5+ character domains are where the majority of registrations and renewals happen. That tier is the foundation of domain usage and recurring engagement. Tripling the cost doesn’t capture more value—it causes churn. It breaks user habit, deters new registrations, and leads to fewer renewals. Basic elasticity modeling shows this. Any platform that’s built on scalable, low-friction access understands this intuitively. Apparently, we don’t.

The justification that “3 tez is only $1.50” also shows a fundamental misunderstanding of how users think. They don’t sit there doing USD conversions. They think in tez. They think in behavior, in rhythm, in trust. One tez per year has been the mental anchor, and we’re yanking that away with no plan for how it lands. That’s not economics. That’s wishful thinking.

And frankly, if this kind of economic reasoning isn’t understood by the people stewarding governance, then that’s a red flag. Governance isn’t about hurrying decisions under pressure—it’s about strategic clarity, incentives, and protecting the ecosystem’s future. If someone can’t grasp why a 200% price increase on the dominant product tier will reduce—not grow—revenue, that calls into question whether they should be driving pricing decisions at all.

I’m not saying to halt everything. I’m saying: we carve this part out. We’ve done stop proposals before. We can do one now—specifically for the 5+ character domain tier. Let the rest stand if necessary. But this one piece is a mistake, and we still have time to prevent it from doing real damage.

This isn’t a philosophical disagreement. This is economics.

11

This proposal is settled. It was proposed 40 days ago, confirmed by DAO vote 5 days ago, and now it’s being implemented. There was plenty of time provided for comment.

Constantly reversing decisions creates confusion. Let’s implement first, gather real data, and then make adjustments if needed based on actual results.

I won’t vote to overturn this before implementation.

@Kevin I recommend starting a proposal now about how to proceed after the price changes. By the time everything gets discussed and settled on a different path, we will have several months of data about how the new pricing structure is performing, to compare and contrast with.

12

I appreciate your concerns of raising the price to 3 XTZ is in your opinion, not good, however, you again, had a chance to give your opinion on pricing during the DRAFT phase, but didn’t.

Again, as mentioned in previous comment, this isn’t able to be done due to the change of proposal process after the last time you pleaded a STOP. If you would like to see another change to the pricing structure, you would need to wait until after the changes have taken effect to proceed with a proposal vote. You are able to start this proposal now, as mentioned by @Primate but no action can be taken until P-021 goes to EXECUTED on May 14th.