A GoDaddy’s automated domain appraisal tool is under fire from domain investors as well as digital asset enthusiasts working with blockchain. According to experts, the platform cannot adequately estimate the value of today’s modern domain names.
The controversy started when Domain Name Wire reviewed GoDaddy’s appraisal tool, referring to it as outdated despite its usefulness in performing bulk appraisals.
What Makes GoDaddy’s Domain Appraisal Tool Outdated?
As one would expect, GoDaddy’s domain appraisal tool uses a sophisticated algorithm that analyzes millions of data points associated with past domain sales going back over two decades.
Industry experts claim that despite being highly accurate for traditional appraisal purposes, GoDaddy’s appraisal system fails to adjust to the new market reality.
Namely, blockchain, Web3 technologies, and AI technologies are some of the latest trends that make automated appraisal of certain domains extremely hard to do.
According to Domain Name Wire, even the domain prices offered by GoDaddy tend to exceed those suggested by its automated appraisal tool.
Among other things, critics point out that GoDaddy’s tool cannot adequately value:
- Brandable names
- AI domains
- Blockchain-related keywords and terms
- Web3 naming standards
- New TLDs, such as .ai and .io
Blockchain and Web3 Make Domain Appraisal Harder
Blockchain technology has revolutionized online space with a whole ecosystem of digital identities associated with crypto assets.
Traditional appraising methods focus on analyzing historical data and finding similar domain names in past sales. This process works just fine until an emerging market trend makes the process too slow and irrelevant.
According to experts, domains related to blockchain, tokens, AI, and decentralized applications can easily increase in value before appraisal algorithms can pick up any changes.
This poses challenges for blockchain investors because appraised domain prices tend to be lower than actual prices.
Use Cases of Automated Appraisal Tools for Domains
Even though GoDaddy’s appraisal tool has been criticized for failing to adapt to the new reality, there are still a number of situations where it can be useful.
In particular, the tool can help investors spot:
- Keyword-rich names
- Memorable names
- Short domains
- Commercially relevant phrases
- Key high search volume keywords
Automated appraisals are only the first step in domain valuation.
Expert Domain Appraisers Warn Against Using Automated Tools
Several expert appraisers have warned against relying solely on automated domain appraisal tools and scores.
Namely, the so-called minimum value problem is one of the main reasons why automated appraisals should not be used for high-value purchases.
Moreover, researchers looking into automated domain appraisal tools found that most such tools failed to assess several key factors, such as branding potential and market timing.
The Future of Domain Appraisal Technologies
Considering the rapid developments in blockchain technologies, automated domain valuation might require upgrades to stay relevant.
Today, digital assets include far more than traditional website domains. Instead, these are elements of wider digital identities tied to crypto wallets, Web3 protocols, and other technological breakthroughs.
At this point, experts advise combining human intuition and expertise with appraisal tools when purchasing high-value domains.
