Dutch auctions are incentive-compatible - they allocate the resource to the person that gains the highest utility for having it. Maybe Google got some of the people working on ads auctions to design this pricing structure.
I’m, that’s an icann rule for launching new tlds. The early access period is always higher, then there are several other periods that happen before a tld gets to General availability.
This pricing structure is not just for .dev domains.
FYI, there is no ICANN requirement that any sort of auction be involved in launching a new TLD. We used to use a standard auction (called the landrush phase in TLD parlance), but have since switched over to a descending price Dutch auction because it's significantly less operational burden for us.
It's generally a good idea to have some kind of auction for the reasons the parent comment mentions, as it is a more economically efficient way to allocate the limited namespace to those who want it the most.
I remember people calling that a bit of a fiasco... was there anything theoretically wrong with the application of a Dutch auction for that purpose, or was it just that the underwriting community and their clients had every reason to make the situation look bad?
The price basically ended up being set by the underwriters because they big players bought most of the shares and bid at the price they underwriters told them to bid at. It wasn't really a fiasco, it just didn't accomplish what they wanted.
Yeah, there are domain names out there that are so valuable that they've sold for eight figures USD. There definitely are domains that buyers (typically companies) are willing to spend well over $10k on acquiring. It's with this in mind that the EAP prices are set.
> they allocate the resource to the person that gains the highest utility for having it
I don’t think that’s necessarily true. Any large company is able to drop a ton of money on something that has marginal utility for them, whereas a small business that would gain much more utility from it may be outbid just by virtue of having the wrong opponents.
This assumes bidders have similar amounts of money to spend on domains, which may or may not true for any particular domain.
We can say that, when bidders do have similar bankrolls, whoever wants the domain the most is likely to buy it first. If they don't, whoever has the bigger bankroll will probably be able to buy it first.
Dutch auctions are incentive-compatible - they allocate the resource to the person that gains the highest utility for having it. Maybe Google got some of the people working on ads auctions to design this pricing structure.