An important talk every TLD applicant should have with their back-end provider.
New top-level domain applicants are getting plenty of advice nowadays about how to launch their new Registry. In addition to thinking about their branding and distribution, they should also be thinking about their business practices with Registrars.
What many of them do not realize is that their cash flow practices, with respect to Registrars, may be a factor of whether ICANN Registrars even support their Registry.
The typical cash flow model today for TLDs is that the ICANN Registrar needs to pre-fund an account at the Registry before processing registrations. When the Registrar uses up their pre-funding, they need to send more money to the Registry. Every Registrar monitors their existing Registry balances and estimates future transactions in order to decide when to send more funds to each Registry.
This model has worked fine for the first decade of ICANN. But it is going to collapse with the introduction of hundreds of new gTLDs. To read the full article, please visit CircleID