If we could differentiate between a deposited and a farmed Safecoin, maybe something like:
- an account is free to create, and can pay to store data (exchange Safecoin for PUT), but can only create public IDs that generally are not desirable (e.g must start with at least four alphabetic characters, and must end with four or more digits, so "Tyler9999" for example.). This ensures anyone can create a website, and do all things that require a public ID right away, but stops creation of accounts just to squat desirable IDs. So what is the hurdle for creating desirable IDs...
- if a vault farms one Safecoin directly into a wallet, the account controlling that wallet earns the right to create N public IDs without restrictions. (Say N=5 to start, but ideally would change as the farming difficulty increases over time). Every time a Safecoin is farmed into a wallet, this number increases (because that means there is no advantage for those able to keep creating new temporary vaults, over your average user without a botnet, server farm etc = level playing field based only on the resources you provide).
This incentivises early farming greatly, and makes it impossible to gain control of lots of nice IDs without significant cost, and ensures the network (ie everyone) benefits from the resources provided by people motivated to get vanity IDs (whether they are farming them, or paying for them and thereby incentivising people to farm them).
The benefit from incentivising people to farm for IDs: more resources (from people trying to register more IDs) reduces storage costs for everyone.
It complicates the incentives for farming, but not in a detrimental way I think, and eventually the effect will disappear as all the more desirable IDs get taken and the incentives reduce. This will I expect happen over a much longer period than the current DNS where large numbers of donations can be bought by anyone with enough cash. This mechanism requires those acquiring these IDs contribute far more in exchange for them than with the current DNS, with the benefits going directly to the network and all its users.
With this system I think it is fine to allow a free market in IDs because that provides the incentive for people to provide storage in order to farm IDs (and Safecoin - they get the Safecoin too of course).
The system avoids the network needing to charge directly for an ID, which is good because pricing them effectively is very difficult. That's because it is very hard for the network to know which are valuable and which are not. An auction might solve that, but I don't see a way for the network to implement that. At least that looks like a much harder problem to me.
The one difficulty I see immediately is deciding the restrictions to place on the "free" IDs in order to avoid these becoming desirable for squatters, but I think that's an easier problem. We will have to look at how these might be valued by users and try to ensure they are ugly enough, and that there are enough of them, to make squatting too costly to turn a profit! Maybe the network can increase the prefix/suffix lengths over time, or... but now it's getting complicated again
Maybe the suffix has to be longer is my first thought, and maybe it has to have some none-alphanumeric characters too - the aim being too ensure there are lots too many such IDs to make it practical to hoover up enough to make them scarce. At the extreme they would look like a bitcoin address.