How ISPs can unlock hidden revenue streams through IP address monetization

• Internet service providers (ISPs) can turn underutilised IP address holdings into revenue through leasing, trading and strategic management in secondary markets.
• Structural scarcity, governance constraints and market dynamics shape the economics of IP assets and require coordinated reforms to fully realise their economic potential.

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Internet service providers (ISPs) operate at the heart of the internet economy, supplying connectivity to homes, businesses and cloud services. Yet beneath the technical work of routing packets and provisioning connections lies an often-overlooked economic reality: IP addresses themselves have value. As the global supply of IPv4 addresses nears exhaustion and demand persists, these numeric resources have emerged as scarce, tradable and potentially lucrative assets.

This article explores how ISPs can unlock hidden revenue streams through IP address monetization, what the market looks like today, the policy constraints that shape it and the governance debates that could define its future.

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What is IP address monetization

IP address monetization refers to the process by which organisations, particularly Internet service providers (ISPs), cloud companies and enterprises, generate financial returns from their unused or surplus Internet Protocol version 4 (IPv4) addresses, rather than using them solely for network connectivity. IPv4 addresses are fundamental identifiers that allow devices to communicate on the internet, and they were originally designed on a 32-bit system capable of producing around 4.3 billion unique addresses. When the internet was first conceived, this figure seemed impossibly large. However, with explosive global connectivity growth, cloud services, mobile devices and digital platforms, this supply has effectively been exhausted.

This scarcity has reshaped the economic landscape of internet infrastructure. As highlighted in analysis of the role and importance of IP addresses, IPv4 has evolved from a purely technical resource into a valuable digital asset. Because IPv6, although abundant, has yet to be universally adopted, many networks and online services still depend heavily on IPv4 for compatibility and reach. This ongoing reliance has helped create a secondary market in which IPv4 addresses can be leased, traded and priced according to supply and demand.

In today’s market environment, monetization typically happens in two main forms. The first is leasing unused IPv4 address blocks. Under this model, organisations retain ownership of their addresses but rent them to businesses that need additional capacity. This creates a recurring and predictable revenue stream while maintaining long-term control over the resource. Professional platforms now exist to support this process by offering structured pricing, automated management tools and compliance processes to ensure transparent and secure transactions.

The second route is selling or auctioning address space that an organisation no longer requires. As digital infrastructures evolve, some companies find they hold more IPv4 space than necessary. By transferring ownership through controlled sales or competitive auction environments, they can unlock one-off capital returns. Industry specialists and brokers typically support these transactions, helping organisations assess market value, prepare address blocks, ensure registry compliance and structure deals in ways that maximise economic benefit.

“The claim that IPv4 could reach a total value of $60 trillion is not rhetorical. It follows from basic asset economics once IPv4 is treated for what it actually is: a scarce, irreplaceable service-enabling asset.”
——Lu Heng, CEO at Cloud Innovation, CEO at LARUS Ltd, Founder of LARUS Foundation.

Also Read: IPv4 as an investment asset: upper potential
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Why IP addresses have economic value

The economic value of IPv4 addresses stems from core principles of scarcity, utility and demand. Internet devices cannot reliably participate in global networks without unique IPv4 addresses, making them essential enablers of digital services. Despite this necessity, IPv4 addresses have historically been treated as a technical resource rather than an economic asset, which has suppressed market recognition.

“IPv4 is the Internet’s most important service enabler. A device or cloud server cannot be online without an IPv4 address.” 

——Lu Heng, CEO at Cloud Innovation, CEO at LARUS Ltd, Founder of LARUS Foundation.

Under typical economic conditions, resources that enable revenue generation—such as prime real estate or spectrum—are priced based on the value they unlock, not merely their cost of provision. Yet IPv4 addresses are often leased at rates disconnected from the economic output they support. Heng notes that an IPv4 address leased for about $0.30 per monthcan underpin services that generate hundreds of dollars in revenue, illustrating how undervalued the resource remains. 

In some secondary markets, IPv4 prices have climbed significantly, reflecting scarcity and regional demand pressures. Analysts have recorded sales in the $30 to $60 per address range, with pricing variation influenced by regional registry policies and market conditions. 

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How ISPs generate revenue from IP address assets

1. Leasing unused address blocks

One of the most direct methods for monetization is through leasing. Platforms such as IP Market allow holders to promote unused prefixes, define pricing and lease durations, and receive recurring income. This approach enables ISPs to retain ownership while profiting from underutilised assets. 

Leasing can be segmented by block size, market demand, and term flexibility. Licences can range from short-term agreements that support transient network needs to long-term contracts with enterprise clients who require stable address resources.

The advantage of leasing is that it helps smaller ISPs without the need for a full sale, offering recurring revenue that supports operational budgets while deferring the need to relinquish capital-intensive resources.

2. Selling or auctioning address space

For ISPs with significant legacy holdings that exceed their own operational needs, outright sales or auctions can create one-off revenue inflows. Auctions, often facilitated through specialised brokers or online marketplaces, provide structured mechanisms for price discovery and transfer. 

Below is a simplified view of the auction process for monetization:

Phase	Action	Key Consideration
Preparation	Audit and verify unused blocks	Ensure blocks are clean and eligible
Valuation	Market and block size analysis	Price per IP influenced by demand
Platform selection	Choose a verified marketplace	Must comply with registry policies
Transfer	Secure transaction and escrow	Protects both buyer and seller

This table shows how monetization can be systematically approached, reducing risk and maximising returns.

3. Portfolio optimisation

Instead of direct monetisation, some ISPs optimise their address portfolios by reallocating internal resources. This can involve pruning dormant space, rationalising assignments, and repositioning addresses to align with financial strategy. Such internal optimisation can prevent waste, reduce operational overheads and improve address utilisation, putting the organisation in a stronger position to monetise surplus in the future.

Also Read: IPv4 as an investment asset: upper potential
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Structural and governance challenges

Even though IPv4 addresses clearly hold economic value and monetisation models are now well established, unlocking their full financial potential is not straightforward. The system that governs how IP resources are issued, transferred and recorded was built for technical coordination, not for functioning as a mature economic asset market. As a result, several deep structural and policy challenges continue to restrict how far IPv4 monetisation can realistically go.

One of the most debated issues is the question of ownership. Under the current framework of Regional Internet Registries (RIRs), IPv4 addresses are allocated for use, but they are not formally recognised as assets with full property rights in the same way that land, spectrum licences or other tradable resources are. This creates uncertainty. Organisations acquiring IPv4 space often do not receive the equivalent of a legal title that guarantees long-term control or freedom to resell.

This lack of recognised ownership weakens liquidity because markets rely on legal clarity and security to function efficiently. When holders and buyers cannot be completely certain that transfers will always be valid, enforceable and unrestricted, confidence drops. As a result, IPv4 cannot yet operate like a fully mature capital market, which limits investment enthusiasm and restricts the scale of monetisation.

Also Read: IPv4 scarcity and its economic impact on ISPs
Also Read: Why IPv4 could be worth $60 trillion: Evaluating the debate over digital asset value

Policy and regional barriers limiting IPv4 monetisation potential

Beyond ownership concerns, policy frameworks themselves also slow the market. Many RIRs still apply strict “demonstrated need” requirements and impose various administrative processes before address space can be transferred. These rules were originally designed in an era when IPv4 was treated as a public technical resource, and their purpose was to prevent hoarding or misuse.

However, in a market-driven environment, such processes can reduce flexibility. They limit how quickly addresses can move between organisations and reduce the volume of transactions that might otherwise take place. This suppresses market fluidity, weakens price discovery and ultimately prevents IPv4 assets from reaching their full economic valuation.

IPv4 monetisation is also influenced by geography. Different RIR regions apply different policies, market rules and administrative approaches. This creates an uneven playing field. In some parts of the world, such as the Asia-Pacific region, strong demand and limited supply have pushed costs higher, narrowing monetisation choices for service providers. In contrast, regions like Europe or North America typically have more mature market structures and more flexible policies, allowing transactions to take place with greater ease.

This uneven regulatory landscape means that not all ISPs have equal access to monetisation opportunities, and their ability to unlock value from IPv4 holdings can depend heavily on where they operate.

Also Read: Case study: How enterprises generate recurring income from IPv4

Practical steps for ISPs considering monetisation

For ISPs exploring IPv4 monetisation, several practical actions can guide the process:

• Conduct a full audit of IPv4 address holdings to identify unused or underutilised blocks.
• Consult legal experts to verify ownership records and ensure compliance with RIR transfer and policy requirements.
• Consider leasing unused IPv4 space as an initial monetisation approach to retain ownership while generating recurring revenue.
• Assess reputable secondary market platforms or brokers to explore potential sales or auction opportunities.
• Participate in governance and policy reform discussions to help improve market liquidity and strengthen asset recognition.

Table: Monetization models for ISPs

Monetization Model	Revenue Type	Ownership Retained?	Typical Use Case
Leasing	Recurring	Yes	Holding surplus space
Sales/Auctions	One-off	No	Divesting unused space
Portfolio Optimisation	Indirect	Yes	Improving internal allocation

Frequently asked questions

1. What is IP address monetization?
IP address monetization is the process of earning revenue from underutilised IPv4 addresses, often through leasing or selling them in secondary markets.

2. Why are IPv4 addresses valuable?
Because IPv4 supply is finite and essential for internet connectivity, they have economic value driven by scarcity and demand, despite policies that suppress liquidity.

3. What barriers exist to full monetization?
Key barriers include lack of recognised ownership rights, restrictive RIR policies and limited market liquidity.

4. Can smaller ISPs monetise their IPv4 holdings?
Yes. Leasing unused blocks can provide recurring revenue, though smaller holders may face greater policy constraints and pricing volatility.

5. How does IPv6 affect monetization?
IPv6 adoption reduces long-term reliance on IPv4 but does not immediately eliminate demand, meaning IPv4 monetization remains relevant for years.