The “KNS:” Vision
Kabuto Name Service (“KNS”) is more than a product. It’s a protocol. It’s a template. It’s a funding bootstrap. As announced previously on Twitter, Kabuto is evolving.
This announcement signalled a fundamental change in how Kabuto operates. Kabuto started as a product line, built by LaunchBadge and focused on providing utility to the Hedera ecosystem. It has always been the plan for Kabuto to fill the needs of the Web3 developer community, making it easier than ever to launch projects on Hedera. The crypto crash of 2022 diverted those plans. Funding was frozen. We at LaunchBadge had some decisions to make.
Through much deliberation, we decided to open up Kabuto as a community-driven project. If we get our wish, it will become a Decentralized Autonomous Organization (“DAO”) where the users of Kabuto would also be governing decision-makers and participate in the success of its products. While there is much due diligence to perform before Kabuto can officially become a DAO (and there is no guarantee that Kabuto can become a DAO), we have structured the protocol to support such an organization.
The Business Model
Kabuto’s projects will split their revenue in such a way as to incentivize all participating parties. As we mentioned before, KNS is a template for how this could work. The revenue for KNS is split between 4 accounts: 1) Infrastructure, 2) Development, 3) Cooperative (potentially DAO), and 4) TLD manager.
Infrastructure
The Infrastructure account is designed to cover any Hedera auto-renewals, caching server hosting, or migration costs related to the KNS protocol as a whole. This account is currently managed by LaunchBadge but, in the case where a DAO is feasible, would be managed by a DAO-selected manager or voting contract. With regard to KNS, this account is funded at $2 per year per domain.
Development
Once the infrastructure fee has been subtracted from the revenue, 50% of the remaining income is allocated to the Development account. This account is dedicated to funding development of Kabuto projects, including KNS. In the future, we imagine this budget to be driven by proposals made to the Kabuto community where priorities and funds allocation are determined by community vote.
Cooperative
The Cooperative (and hopefully someday the DAO) account receives 25% of the remaining income after the infrastructure fee has been applied. This fund is designed to be the discretionary fund of the community; enabling promotions, project development, incentive programs, etc.
TLD Beneficiary
The TLD account is designed to compensate TLD managers for managing and promoting a TLD. This account receives the remaining 25% of revenue after the infrastructure fee has been assessed. Because KNS is a smart contract protocol, we invite all TLD holders to join as TLD beneficiaries. This includes existing name service projects like Hashgraph.name and Web23. We built KNS to allow for easy migration from other projects where those project owners are still compensated for their efforts.
Pricing
We took inspiration from Ethereum Name Service (ENS) regarding pricing.
We chose to be significantly cheaper on ASCII character domain names (“Standard”) with $5/y for any domain name 3 characters and over (vs 5 characters on ENS), $50 for any 2-character domain, and only $500 for 1-character domains. Given the scarcity of domains of smaller sizes, we felt that an order of magnitude pricing model was appropriate. We also didn’t feel the need to charge as much as ENS even though ENS has greater limitations on name sizes.
The pricing changes when using characters that are in the unicode space but outside the ASCII character space. We called these domains “Premium” domains. These domains simply applied a 2x multiplier to the same formula for Standard domains.
It is important to note that there are no royalties or custom fees charged for transferring or selling your KNS domain NFTs. You pay an annual fee for the records + NFT and that’s it. Anything you do with your token after the annual fee is your business.
Going forward, the goal is to provide a community-driven mechanism where current projects can fund future projects that are proposed and voted on by current project users. We want this mechanism to grow beyond LaunchBadge. LaunchBadge will help to build this model out, and yes, LaunchBadge will earn income from being the founding contributor of Kabuto, but we want this to be a model where other projects with good ideas can be recognized and funded to grow the Hedera ecosystem as a whole; guided by and accountable to the community of users.
The Technical Advantage
There were a few driving motivations for LaunchBadge taking on KNS as a project in the first place, and we’ll be quite transparent here:
- LaunchBadge has clients who need something like Web2’s DNS; where subdomains were first-class citizens and records were client-definable and unlimited. The current name service projects wouldn’t satisfy their requirements.
- There was already a fragmentation in the nascent name service ecosystem on Hedera. Coordinating de-duplication and name service ownership was a challenge. People were asking for an ICANN-like service: a mechanism for coordinating name service providers and de-duplicating name hosting.
- A fully decentralized name service, with a TLD manager at the top and domain name registries built strictly with smart contracts and built for scale, was something we were confident we could do relatively quickly.
We built it first to see if we could actually do it. Once we succeeded, we began to reach out to the name space ecosystem members. After a couple of weeks of discussions and LOTS of testing, we launched our Beta version of KNS.
So what are the major technical features of KNS?
- KNS is designed to become the DNS protocol for all of Web3. We support multiple blockchains in the Address record of KNS domain names. We aren’t limited to a pre-defined subset of blockchain addresses. The “Type” field of an Address record in KNS matches the SLIP-44 Coin type list. This means that a KNS address can hold your public addresses for all of your blockchain accounts.
- Domain name de-duplication and TLD control is built right into the protocol. KNS becomes the community-driven ICANN-like mechanism for vetting new TLDs through a proposal process. In this way we don’t have single parties choosing “winners” and “losers” of who gets to issue a new TLD. We also don’t have fragmentation of how domains are resolved.
- Subdomains are first-class citizens in KNS. Simply adding a record with any text before the domain name in the Name property field gives you a “subdomain”.
- “Unlimited” records. Really what is happening is that every domain name comes with 18 records, and every additional 18-record block becomes just a multiplier on the annual fee. So if you need more than 18 records but less than 36 records attached to your domain name and your record fee is $5/yr, then you really need a domain name ($5/yr) plus an additional record block ($5/yr) for a total of $10/yr. The important thing is that KNS is flexible enough to support as many records as you need attached to your domain name.
- Unicode support! This is massive. A World-Wide Web 3.0 protocol should support languages from a wide world. This includes non-Latin characters (Korean, Chinese, etc), special characters, and emojis.
Summary
Kabuto is evolving into a community-driven protocol where new projects can be vetted and funded through community consensus-building. Kabuto Name Service, a fully decentralized “DNS for Web3” protocol, is the first project demonstrating how this can be done. Holders of KNS domain NFTs will be involved in selecting the next TLDs, and assuming we determine that a DAO model is feasible, those NFT holders will be included as members of the DAO.
NOTE: Kabuto is not a Decentralized Autonomous Organization (“DAO”) today. There is no guarantee that Kabuto can become a DAO without members incurring legal or tax liabilities. We will continue to investigate and notify the Kabuto community of progress accordingly.
Kabuto Name Service: https://ns.kabuto.sh/
Kabuto Twitter: https://twitter.com/kabuto_sh
LaunchBadge Website: https://launchbadge.com/
