If you own IPv4 addresses sitting idle, you're leaving money on the table. The question is: which table?
I've been analyzing IPv4 monetization strategies for network operators and infrastructure companies. The math seems straightforward at first glance, but the variables matter more than most people realize.
Here's what the spreadsheets don't tell you.
The Cogent Case Study
Cogent Communications operates 11.4 million IPv4 addresses generating roughly $35-40 million annually through leasing.
Quick napkin math: that works out to about $3.29 per IP per year, or roughly $0.27 per IP per month.
At current market rates (around $18-20 per IP for large blocks), that represents a 5.5-6 year payback compared to selling immediately.
But here's the strategic advantage most people overlook: Cogent keeps ownership. They can still sell later if their strategy changes. They're collecting rent on an asset they can eventually liquidate.
The Fundamental Question
For any IPv4 block, your decision comes down to comparing two paths:
Option 1: Sell Now
You get immediate liquidity. One transaction, clean exit, capital in hand. Simple and straightforward.
Option 2: Lease Then Sell
You collect monthly income over time, then sell the block later. Total value equals all the lease payments you collect, plus whatever you can sell the block for down the road.
The challenge? Future cash flows aren't worth as much as money today. A dollar next year isn't worth a dollar this year—you need to discount future income to compare fairly.
Real Platform Performance Data
Here's what matters in practice based on 2025 market benchmarks:
High utilization scenario (90% leased, $0.45 per IP monthly):
Break-even against selling happens around year 4-5
Medium utilization scenario (80% leased, $0.40 per IP monthly):
Break-even extends to 5-6 years
Moderate utilization scenario (70% leased, $0.40 per IP monthly):
Break-even stretches to 6-7 years
Low utilization scenario (50% leased, $0.30 per IP monthly):
Break-even exceeds 10 years
Notice the pattern? A 20-point drop in utilization can extend your payback period by 3-5 years. That's the sensitivity most financial models completely miss.
Why Utilization Varies So Much
Not all IPv4 blocks are created equal. Utilization depends on several factors:
Block reputation — Clean history with no blacklists attracts more tenants. Blocks with past abuse issues sit vacant more often.
Geographic routing — Certain regions have higher demand. RIPE blocks often lease faster than ARIN blocks, for example.
Block size — Smaller allocations (/24, /23) are easier to lease consistently than large /16 blocks.
Seasonal patterns — Some industries create demand spikes during specific periods, affecting utilization rates.
Most owners assume they'll hit market averages (around 80%). In reality, individual block performance varies from 50% to 90%.
Regional Policy Constraints Nobody Talks About
Your Regional Internet Registry matters more than most people realize:
RIPE NCC (Europe): 24-month holding period before you can resell
ARIN (North America): 12-month restriction on transfers
APNIC (Asia-Pacific): Some address pools require 5-year holds before transfer
LACNIC (Latin America): Typically 12 months between transfers
Here's why this matters for monetization: if you're locked into holding anyway, leasing generates revenue during the mandatory waiting period. Selling might not even be an option for years.
The Hidden Costs Everyone Forgets
Most break-even calculations only look at gross revenue. Real-world operations include costs that erode returns:
Reputation management — Budget 2-5% of revenue for abuse cleanup and blacklist removal. Even with good tenant screening, occasional problems happen.
KYC and tenant verification — Screening new renters takes time or money. For high-churn blocks, this becomes a material cost.
Platform fees — Most marketplaces charge 12-17% commission depending on volume and contract terms.
Administrative overhead — Routing checks, monitoring systems, contract management, and general administration all consume resources.
For smaller blocks (anything under a /20), these fixed costs matter more per IP. A /24 block generating $1,500 monthly might have $200-300 in hidden costs you weren't planning for.
When Selling Actually Wins
Leasing isn't always optimal. Strategic selling makes more sense when:
You need immediate capital — M&A activity, restructuring, debt paydown, or funding growth initiatives often require cash now, not cash flow later.
Your block reputation is compromised — If cleanup costs exceed what you'd earn from leasing, better to sell at a discount and exit cleanly.
You're exiting IPv4 entirely — If your organization is pivoting away from infrastructure that needs IPv4, holding makes no sense.
Utilization projections fall below 60% — At very low utilization rates, the math simply doesn't work for leasing.
Administrative capacity is limited — Small teams without bandwidth for ongoing tenant management should consider selling rather than adding operational complexity.
The Portfolio Approach
Most sophisticated operators don't choose one strategy—they segment their holdings:
Core operational blocks — Lease these for recurring revenue while maintaining flexibility
Excess capacity from acquisitions — Lease short-term during evaluation periods
Legacy blocks with reputation issues — Sell these for one-time exits
Strategic reserve — Hold some unlisted as insurance against future needs
This isn't indecision—it's strategic asset allocation.
Market Timing Risk
Here's a sobering reality: IPv4 sale prices dropped roughly 40% year-over-year from 2024 to 2025 for large blocks.
If you sold at the peak, you captured maximum value. If you sold in mid-2025, you left 40% on the table. Timing matters enormously for one-time asset sales.
Leasing smooths out this timing risk. You're not betting on catching the market peak—you're collecting recurring income regardless of short-term price swings.
Tax Considerations
This varies by jurisdiction, but it's worth checking: recurring lease income often has different tax treatment than capital gains from asset sales.
In some regions, spreading income over multiple years through leasing can be more tax-efficient than taking a large one-time payment. In others, capital gains treatment is more favorable.
Run the numbers with your specific tax situation before deciding.
The Reassessment Frequency
Whatever strategy you choose, it shouldn't be permanent.
Reassess every 6-12 months based on actual performance:
- Are you hitting projected utilization rates?
- Have market sale prices moved significantly?
- Has your capital situation changed?
- Are hidden costs higher than expected?
- Do current lease rates still justify the strategy?
The infrastructure teams winning this aren't the ones who picked the "right" initial strategy—they're the ones who adapt as conditions evolve.
The Real Decision Framework
Stop asking "should we buy or lease?" and start asking:
- What's our time horizon with realistic buffers?
- How does our actual utilization compare to projections?
- What are our all-in costs including hidden expenses?
- How much does timing risk matter to our strategy?
- What's our administrative capacity for ongoing management?
There's no universal answer. Your optimal strategy depends on block size, reputation, regional policies, utilization projections, capital needs versus cash flow preference, and operating overhead capacity.
The Bottom Line
The infrastructure teams that win aren't the ones who picked "buy vs. lease" or "sell vs. lease" based on conventional wisdom.
They're the ones who built models, tracked actual performance, ran sensitivity analysis, and reassessed regularly.
And they understood one fundamental truth: doing nothing is also a decision—usually the most expensive one.
Working on IPv4 monetization strategy? I've been involved with ipbnb.com's approach to marketplace solutions for both IP owners and renters. They handle the screening, routing, and reputation monitoring that makes leasing operationally viable.
What monetization model are you using for your IPv4 holdings? Have your utilization rates matched projections? Share your experience in the comments.
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