From what I can tell, the proposal located on domainchain: (see
http://domainchain.org/wiki/doku.php?id=start#proposal ) goes against Satoshi's wishes to keep the bitcoin blockchain unencumbered and ties domain assignments directly to bitcoin.
Many community members have stated that this is impractical and will leave bitcoin if attempts continue to include domainchain into bitcoin directly.
Satoshi asked that a new tree be created with a separate currency that floats its value according to demand with the bitcoin service.
I think it would be possible for BitDNS to be a completely separate network and separate block chain, yet share CPU power with Bitcoin. The only overlap is to make it so miners can search for proof-of-work for both networks simultaneously.
The networks wouldn't need any coordination. Miners would subscribe to both networks in parallel. They would scan SHA such that if they get a hit, they potentially solve both at once. A solution may be for just one of the networks if one network has a lower difficulty.
What we have here are dedicated coders/hackers that are racing ahead of theorists. The theory must be bulletproof before any proposals are launched.
I think we need mathematical theorists to begin the process and then hand off to coders the basic structure while pointing out weaknesses.
A new chain with grassroot development should excite the miners and coders and calm the fears of the thinkers/theorists among the community.
The funny thing is, once the theory is solid the porting of a new BitDNS(Domainchain?) will be very simple. All the stumbling blocks appear to be centered around including Domainchain into the Bitcoin structure instead of branching it into its own chain.
Domainchain is dead, long live Domainchain!