Is Domain Name Selling A Ponzi? Analysis of 20 Domain Sales

So, I decided to take a look at the last 20 domain name sales that I have made, which were at least 3 months old.

I went to the URLs and found something that I thought was quite surprising:

Out of 20 sales, only 7 were being used in any way. The rest were either parking with a domain seller or with an extremely minimal ‘coming soon’ page.

To give some context, out of the 20:

1 domain was 5 figures

17 domains were 4 figures

2 domains were 3 figures

So, here are the details of the 7 (all dotcoms-i have replaced some numbers/letters to avoid being picked up by searches):

1. Za110w
   Sold in December 2022 for $500. Now, it is being used for an AI travel company that is waiting to be launched.
2. ra2
   Sold in August 2021 for $5k. Now being used by a Chinese video game company
3. c1rc1ec1ub
   Sold in May 2023 for $2,595. Now, it is being used as a service to open LLCs in the US. In Spanish.
4. b4gsetc
   Sold in March 2021 for $5k. Now being used for a plastic bag manufacturing company
5. rs21
   Sold in February 2021 for $2,736. Now forwarding to an engineering design company
6. x9999
   Sold in December 2024 for $780. Now being used as an online casino
7. generationwhy
   Sold in July 2021 for $3k. Now being used as an online lottery dealer

This told me that there is a good chance that of the 20, most of the 13 were bought by investors trying to resell them for a higher price. I do find it a bit scary to know that the market is being held up mostly by investors who are buying an investment rather than the domain itself having an intrinsic value.

Now, there could be other logical explanations, such as:

1. Companies bought the domain names but are yet to develop a site.
2. Companies bought the domain name for a particular project, which never came to fruition. Hey, I do it the whole time, but generally, I just buy for $15.
3. The names have already been used for a project that has now finished, and the site has been taken down.
4. Something else?

There are many valid reasons, but it is still a bit scary to think that much of the domain’s value is how investors perceive its resell value rather than what someone will pay for it. Similar to crypto or meme coins, where the value is its perceived value rather than its underlying utility.