The auction isn't designed to be fair for all, it's designed to allocate domains efficiently (in the economic sense).
Mr. mslev does not consider [hisfirstname].dev to be worth $11k, so he will not buy it yet. But someone else might consider [hisfirstname].dev to be worth $11k, so they will buy it.
However, if nobody else values [hisfirstname].dev much, then Mr. mslev will buy it when it costs $12 (or earlier, if he thinks it's worth more).
So domain XYZ.dev is given to whoever values having XYZ.dev the most. And yes, people need money to demonstrate that they value it so much.
This also helps prevent domain squatting. I would love to buy asdf.dev and apple.dev and facebook.dev and hello.dev. apple.dev and facebook.dev would be worth it even at $11k because you could resell them to the actual companies, but laws effectively prevent this. However, I would not want to buy asdf.dev and hello.dev at $11k unless I know I could resell them for more than $11k. If I could resell them for more than $11k, that means someone else (the buyer) would buy it right now at $11k.
If everything was $12, bad guys would buy up asdf.dev and hello.dev and everything they could get their hands on, but now that's not a valid strategy unless asdf.dev and hello.dev are actually worth that much (or you'll lose money reselling them). And if they are worth $xxx, they will get bought at auction when the price drops to $xxx.
Speed will still win (buy valuable-name.dev at the crack of dawn when auction begins, before anyone else has a chance to, and resell it within hours), but hoarding domains long-term is no longer an effective strategy.
Exactly. The alternative of not doing a Dutch auction at launch is much worst; valuable names end up in the hands of squatters who are perfectly happy to sit on many names that remain unused so long as they can sell a few at exorbitant prices. The average non-squatter registrant is better off with EAP and premium prices, as the prices you pay during EAP are lower than what a squatter would try to get out of you for the same domain.
It's much more fair this way. If domains were cheap right away, bots would buy all them up. This gives people the chance to buy a domain- this round is more for businesses, but future rounds in the hundred of dollars will be better for the average person.
How can it be called fair at all when only the rich get first pick?
> If domains were cheap right away, bots would buy all them up.
No. Bots would buy them all up if bots were allowed to buy them all up. It's laughably easy to prevent bots from buying domain names if you don't want bots to buy domain names.
> This gives people the chance to buy a domain
This gives rich people/businesses the chance to buy a domain.
> future rounds in the hundred of dollars will be better for the average person.
After the rich have had their pick. Again, I don't see how you can with a straight face call this fair.
Here's a suggestion: Offer domains to all humans who can pay a reasonable non-refundable application fee. Block bots. When a domain receives more than one offer, randomly assign it to an applicant. Block domain transfers permanently to prevent squatters. Let any domain that isn't renewed fall back into the pool and become available (again to a randomly assigned new owner).
I'm sure there are pitfalls doing it this way, but it took me a minute to come up with that. A few hours of thought, some robust debate, and I'm certain we can come up with a fairer way to assign domain names.
Mr. mslev does not consider [hisfirstname].dev to be worth $11k, so he will not buy it yet. But someone else might consider [hisfirstname].dev to be worth $11k, so they will buy it. However, if nobody else values [hisfirstname].dev much, then Mr. mslev will buy it when it costs $12 (or earlier, if he thinks it's worth more).
So domain XYZ.dev is given to whoever values having XYZ.dev the most. And yes, people need money to demonstrate that they value it so much.
This also helps prevent domain squatting. I would love to buy asdf.dev and apple.dev and facebook.dev and hello.dev. apple.dev and facebook.dev would be worth it even at $11k because you could resell them to the actual companies, but laws effectively prevent this. However, I would not want to buy asdf.dev and hello.dev at $11k unless I know I could resell them for more than $11k. If I could resell them for more than $11k, that means someone else (the buyer) would buy it right now at $11k.
If everything was $12, bad guys would buy up asdf.dev and hello.dev and everything they could get their hands on, but now that's not a valid strategy unless asdf.dev and hello.dev are actually worth that much (or you'll lose money reselling them). And if they are worth $xxx, they will get bought at auction when the price drops to $xxx.
Speed will still win (buy valuable-name.dev at the crack of dawn when auction begins, before anyone else has a chance to, and resell it within hours), but hoarding domains long-term is no longer an effective strategy.