What Is Butterfly Protocol (BFLY)?
Tech Deep Dives

What Is Butterfly Protocol (BFLY)?

CoinMarketCap takes a deep dive into a project that aims to challenge the way that we use web domains today.

What Is Butterfly Protocol (BFLY)?

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Butterfly Protocol is a blockchain-based solution that aims to create a more open web ecosystem by creating a decentralized autonomous organization (DAO)-owned domain registrar and token economy. 

It eventually looks to replace the role of the Internet Corporation for Assigned Names and Numbers (ICANN) — the organization that coordinates and maintains the databases relating to the namespaces of the internet — and provide an alternative to the current DNS system by allowing users to own their domains permanently. 

The native utility token of the Butterfly Protocol ecosystem is BFLY, an ERC-20 token running on the Ethereum blockchain. It can be used for sponsoring the creation of new top-level domains (TLDs). Token holders also receive 15% of the ERC-20 compatible tokens created with each domain as an airdrop. 

Butterfly Protocol gives domain holders absolute control over their information by eliminating intermediaries like domain registrars and hosts. Instead, users can simply buy their top-level domains (TLDs) once using BFLY tokens, and can purchase subdomains using subBFLY tokens. 

The Butterfly Protocol token (BFLY) was launched in February 2021, shortly after the project completed an initial DEX offering (IDO) on the Polkastarter platform, raising over 70 Ether (ETH). It is being developed by a multidisciplinary team, including president Dana Farbo, and co-founders Josh Robinson, Justin Laue and Cortland Langworthy.

How Does Butterfly Protocol Work?

Through the Butterfly Protocol, users can purchase a variety of blockchain-based TLDs and subdomain names. Each name is a unique ERC-721 non-fungible token (NFT), which can create associated ERC-223 tokens 

In the Butterfly Protocol ecosystem, the term domain actually represents a single name, which is in turn represented by a single token. Whoever holds this token is considered the domain owner. On top of this, each domain can be associated with a range of ERC-20 compatible tokens, which can represent fractional ownership. 

Butterfly Protocol also features a built-in auction site, which allows users to buy and sell names in a trustless way without relying on centralized intermediaries. 

The platform can be accessed after installing the Butterfly Protocol browser extension, which will then allow the user’s browser to recognize TLDs registered through the Butterfly Protocol — such as .polkadot, .coinmarketcap and practically everything else. These can be bought and sold on the associated Butterfly Protocol marketplace, which allows TLD holders to auction off their domains to the highest bidder. 

Besides buying domains outright on the Butterfly Protocol marketplace, BFLY and subBFLY token holders can also sponsor domains, which will then create the TLD and allow users to trade subdomains. With each new TLD sponsored, 10 million subBFLY are minted and distributed to the network; with 500K going to the sponsor, 2 million to BFLY holders; and the last 7.5 million auctioned off over 10 days. 

As of March 2021, the project is currently part way through its development roadmap, with one public DApp available to use, and subBFLYs created and airdropped. In the months and years ahead, there are plans to expand the Butterfly Protocol ecosystem with more DApps, unlock more TLDs for sale and move to mainstream publishing by 2024.

As a decentralized autonomous organization (DAO), Butterfly Protocol will continue operating even if the Butterfly organization eventually shuts down. 

What Makes Butterfly Protocol Unique?

Butterfly Protocol is built on the Ethereum blockchain. As a result, it makes use of a variety of token types to provide its services: these include ERC-721 token contacts for each TLD, an ERC-20 utility token known as BFLY and ERC-20 tokens minted with each sponsored TLD. 

Unlike regular domains, those purchased through Butterfly Protocol are owned permanently unless sold or traded. There are no recurring billing fees to retain ownership. They also have a much more flexible naming structure, since domains can include any ASCII symbol, including emojis and characters from a variety of languages — including Chinese. 

Since it is based on the Ethereum blockchain, Butterfly Protocol is secured by a proof-of-work (POW) mining network, which sees tens of thousands of miners and nodes work together to protect the network against attacks. This also makes the network resistant to censorship — since unlike traditional domain names, the tokens that represent Butterfly Protocol domains cannot be seized, blocked or blacklisted. 

Beyond this, Butterfly Protocol is set to leverage the Interplanetary File Transfer Protocol (IPFS) to host DApps and their data, allowing it to grow into an ecosystem of decentralized web services that are redundant and resistant to tampering, while still being intuitive to interact with. 

As of March 2021, the Butterfly Protocol team are building a decentralized application to show off the unique qualities of the Butterfly platform — including its censorship resistance. The first app will be a social sharing app known as Butterfly Social, which allows anybody with a .human subdomain name to create and publish content using IPFS. There is currently no fixed date for its launch.

Although Butterfly Protocol is billed as a DAO, BFL token holders do not have any voting rights, and are not involved in governing the platform. 

How to Access the Butterfly Protocol Network

Unlike regular domain names, which can be accessed through any regular internet browser, domains registered through Butterfly Protocol will not be immediately recognized by a standard browser — since they’re not a true domain in the traditional sense as they don’t have a ROOT DNS server managed by IANA, ICANN and Verisign.

However, users will be able to access Butterfly Protocol domains after installing a browser extension. This will then allow the user’s browser to interpret the alternative root that is Butterfly and successfully load its domains, sites built on IPFS and DApps. Beyond this, Butterfly Protocol can be used for more than simply hosting domain names, and will be integrated into a variety of other applications as these use-cases are further explored.

There are also plans to release a proprietary Butterfly browser, which will likely feature built-in support for the Butterfly Network without additional plugins. There is no hard date set for the launch of the Butterfly browser.

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