Web3 domain names (e.g., .eth, .crypto) are gaining adoption as user-owned, decentralized identifiers for wallets, dApps, and identity. They replace long hexadecimal wallet strings with human-readable names and can be used for authentication and decentralized hosting.

However, despite the narrative, Web3 domains have not replaced traditional DNS domains. Most Web3 startups still use standard Web2 TLDs — primarily .com, .io, .xyz, .org, .fi, and .tech, because they offer widespread browser support, SEO, reliability, and user familiarity.

Web3 domains work well for wallet routing and identity inside blockchain ecosystems. They’re less useful for mainstream adoption due to browser limitations, extension requirements, and lack of search visibility.

If you’re building in Web3, it makes sense to own both:

A Web2 domain for your main site and brand

A Web3 domain for identity and transactions

They serve fundamentally different purposes today, and it’s unclear whether Web3 domains will ever fully replace DNS.