TON DNS auction rules.

The TON DNS rules are set to provide a decentralized auction for the initial distribution of domain names with equal conditions for all participants.

People can obtain a .ton domain only via the auction, which starts on July 30, 2022, at dns.ton.org.

What should a .ton domain name look like?

The length of domain names will be restricted from 4 to 126 characters. Registering a domain name with fewer than 4 characters is forbidden to avoid potential confusion with .com, .org, and other domains.

Only lowercase English letters, digits, and hyphens are permitted, and the hyphen cannot be placed at the end or beginning of the name. These are standard rules for internet domains.

The .ton domain is an NFT, meaning it can be stored in a crypto wallet that has NFT support; it can be sent to other users; and it can be bought or sold on NFT marketplaces.

The auction process:

The auction for a domain name commences once a user places an initial bid.

Following bids must be at least 5% higher than the previous bid.

If a bid is placed 60 minutes before the deadline or sooner, the domain name’s auction will be extended by one hour to give other bidders the chance to make counter bids.

The previous (lower) bid will be returned to the bidder.

Once the auction closes, all the Toncoin from the winning bid will be sent to the DNS' smart contract and removed from circulation and the supply forever.

1 Toncoin for every domain’s smart contract will not be sent to be frozen forever. Instead, it’ll remain in the smart contract, from which an annual fee will be deducted for storing the domain’s NFT (0.005 Toncoin). The rest of the Toncoin from the winning bid will be sent to a special smart contract and frozen forever.

This way, DNS owners won’t have to worry about these fees for the next 200 years, but beyond that, they’ll have to keep a close eye on the smart contract’s balance.

Auction duration:

The standard auction duration is seven days. During the upcoming year, the auction length will be decreased incrementally until the final auction length lasts just one hour. 

Here’s an example of an auction decreasing in length. Imagine there’s no interest in the user.ton domain name, and no one’s placed a bid on it. The auction duration for this domain will decrease to 84 hours (3.5 days) after six months, and it will decrease further to one hour after 12 months of zero bids.

Why we use this model:

Long auction durations are necessary only at the beginning so that everyone can have a chance at competing for a domain name.

Domain names that are high in demand will be distributed in the first week or month, so having long auction durations for TON DNS a year from now will be pointless. 

Minimum price.

As protection against spamming bots that automatically register names, there will be a base price and floor price one has to pay.

The base price and floor price depend on the number of characters in your domain name.

Base price — The price at which begins the bidding.

Floor price — A price that cannot go lower than this threshold.

Number of characters: Base price/floor price.

4 characters: 1,000/100 Toncoin

5 characters: 500/50 Toncoin

6 characters: 400/40 Toncoin

7 characters: 300/30 Toncoin

8 characters: 200/20 Toncoin

9 characters: 100/10 Toncoin

10 characters: 50/5 Toncoin

More than 11 characters: 10/1 Toncoin

Every 30 days, the current base price will decrease by 10% until it reaches the floor price. 

Here’s an example:

The base price for the user.ton domain name will be 1,000 Toncoin at the beginning.

If after one month no one places a bid on this domain, the base price will decrease by 10% to 900 Toncoin. If there are still no bids after a second straight month, the base price will drop another 10% to 810 Toncoin and so on until the price does down to the floor price of 100 Toncoin for a 4-character domain name.

Extending the domain name.

Once per year, the domain name owner will have to send a microtransaction — e.g., 0.000000001 Toncoin — to the domain’s smart contract to extend ownership of the domain name for another year. 

Owners can do this at anytime since the domain gets extended at the moment of the transaction.

Extending domain names is necessary in case their owners lose access to or interest in their domains, which would result in the domain being put up for an open auction. 

If the domain is not extended, it will go on auction for seven days, and its base price will adhere to the initial auction rules mentioned above.

For example, if the domain user.ton becomes available after one year, its base price will be 1,000 * 0.9^12 = ~283 Toncoin 

Moreover, a 0.05 Toncoin storage fee will be charged to the domain’s owner’s wallet every year for keeping information on the network.

DNS owners have to pay close attention to the smart contract balance of their domain. If it has insufficient funds, the domain will return to an open auction.

Where do .ton domains come from?

The DNS root smart contract is inscribed in the network configuration. This happens via a general validator vote.

There is also the possibility to add other root DNS to the configuration. In this case, other domains other than .ton can be added.

Governance

The network has a special configuration of blacklist domains. By a general validator vote, entries can be added [domain - action]. 

Two kinds of actions:

- Transferring a domain to a specified address.

- Deleting a domain.

If a domain is included in blacklist domains, it cannot go up for auction.

The entry will have to be voted on (to remove the domain) initially, and followed by deleting the entry via a vote, and finally, after all these steps, the domain can go up for auction. 

However, the governance configuration is labor-intensive, and it’ll most likely be never applied.

We encourage everyone to participate in the TON DNS auction, which kicks off on July 30, 2022!