IPv4 Exhaustion: Why Leasing Matters

The exhaustion of IPv4 addresses represents one of the most significant infrastructure challenges facing the internet. With no new IPv4 addresses available from Regional Internet Registries, organizations must navigate a complex secondary market to obtain the IP resources they need. IP address leasing has emerged as a crucial solution, providing flexible access to scarce IPv4 resources without the prohibitive costs of outright purchase.

Understanding IPv4 Address Exhaustion

The Exhaustion Timeline

IPv4 exhaustion unfolded over more than a decade:

January 31, 2011 - IANA Exhaustion: The Internet Assigned Numbers Authority (IANA) allocated the final five /8 blocks from its central pool, distributing one to each Regional Internet Registry. This marked the end of top-level IPv4 address availability.

2011-2019 - Regional Exhaustion: Each Regional Internet Registry subsequently depleted its IPv4 pool:

• APNIC (Asia-Pacific): Reached critical levels on April 14, 2011, less than three months after IANA exhaustion
• LACNIC (Latin America/Caribbean): Depleted on June 10, 2014
• ARIN (North America): Exhausted on September 24, 2015
• AFRINIC (Africa): Reached its last /8 block on March 31, 2017
• RIPE NCC (Europe): Made its final /22 IPv4 allocation on November 25, 2019

2025 - Current Status: As of 2025, IANA holds just 3 /24 address prefixes (768 individual addresses) in its Recovered Address registry - an amount too small to meaningfully distribute to the five RIRs. All five Regional Internet Registries have depleted their IPv4 pools, retaining only minimal reserves for specific purposes like IPv6 transition support.

Why IPv4 Ran Out

IPv4's 32-bit address space provides approximately 4.3 billion unique addresses. While this seemed enormous when the protocol was designed in the 1980s, several factors accelerated exhaustion:

Exponential Internet Growth: The internet expanded far beyond early projections. From a few hundred connected computers in the 1980s, the internet now connects tens of billions of devices worldwide. Each smartphone, tablet, computer, IoT device, and server requires IP connectivity.

Inefficient Early Allocations: In the early days of the internet, when addresses seemed unlimited, entire /8 blocks (16.7 million addresses each) were allocated to single organizations. MIT, Ford Motor Company, and the U.S. Department of Defense each received /8 blocks. Many of these allocations remain significantly underutilized decades later.

Lack of IPv6 Adoption: IPv6, designed to solve address scarcity with its 128-bit address space (providing 340 undecillion addresses), has seen slow adoption. Despite being standardized in 1998, IPv6 adoption remained below 40% globally by 2025. The lack of backwards compatibility with IPv4 created a chicken-and-egg problem: content providers didn't prioritize IPv6 deployment without significant IPv6 user bases, and networks didn't prioritize IPv6 without compelling IPv6-only content.

Cloud Computing and Virtualization: The rise of cloud computing, hosting services, and virtualization created unprecedented demand for public IPv4 addresses. Virtual machines, containers, and cloud instances often require dedicated public IPs, multiplying address consumption.

Mobile Internet Revolution: Smartphones and mobile devices created billions of new internet users, particularly in developing regions that came online after IPv4 exhaustion. These users and their devices required IP addresses, increasing pressure on already scarce resources.

The Post-Exhaustion IPv4 Market

The Secondary Transfer Market

With RIRs unable to provide new IPv4 allocations, a robust secondary market emerged for IPv4 address trading:

Market Size and Activity: The IPv4 transfer market has grown to hundreds of millions of dollars annually. Organizations with surplus IPv4 addresses sell them to organizations with unmet needs. Major technology companies, telecommunications providers, and cloud services participate actively as both buyers and sellers.

Price Evolution: IPv4 address prices have experienced significant volatility:

• 2012-2014: Early transfer market, prices around $8-$12 per IP
• 2015-2017: Growing demand pushed prices to $15-$25 per IP
• 2018-2020: Peak prices reached $25-$35 per IP
• 2021-2023: Market stabilization around $30-$45 per IP
• 2024-2025: Current prices range from $35-$55 per IP, with regional variations

Regional Price Differences: Different regions command different prices based on local demand:

• APNIC Region (Asia-Pacific): Highest prices at $50-$55 per IP due to rapid growth in China, India, and Southeast Asia
• ARIN Region (North America): Moderate-high prices at $45-$50 per IP
• RIPE Region (Europe): Moderate prices at $40-$45 per IP
• LACNIC/AFRINIC Regions: Generally lower prices but limited availability

Market Drivers: Several factors influence IPv4 pricing:

• Regional demand intensity
• Block size (larger blocks often command slightly lower per-IP prices)
• Block reputation and cleanliness
• Geolocation database accuracy
• Historical usage patterns
• Transfer complexity and RIR policies

RIR Transfer Policies

Each RIR developed policies to facilitate legitimate IPv4 transfers while preventing fraud and speculation:

RIPE NCC (Most Liberal):

• Eliminated needs assessment for IPv4 transfers in 2019
• No requirement to justify why you need the addresses
• 24-month hold period after receiving transferred addresses (cannot immediately resell)
• Allows intra-regional and inter-RIR transfers
• This liberal policy made RIPE an attractive destination for IPv4 investment

ARIN (Moderate):

• Requires justified need for IPv4 transfers
• 12-month hold period after receiving allocations or transfers
• Maintains waiting list for small allocations (exhausted, very long waits)
• Specifies transferred addresses must be "operationally used"
• Stricter than RIPE but permits legitimate business transfers

APNIC (Strict Operational Requirements):

• Requires addresses be assigned "in relation to network connectivity services"
• Strictest policies regarding leasing (may revoke addresses if purely leased)
• Organizations must demonstrate operational use
• If LIR ceases providing connectivity services, addresses must be returned
• Designed to ensure addresses serve active network infrastructure

LACNIC and AFRINIC:

• Each maintains specific transfer policies
• Generally require justified need
• Smaller transfer markets than RIPE, ARIN, or APNIC
• Regional variations in policy strictness and enforcement

Inter-RIR Transfers: Transfers between different RIR regions are possible but subject to both regions' policies. The receiving RIR's policies typically govern the transfer, creating complexity for international transactions.

Why Leasing Became Essential

IPv4 leasing emerged as a practical response to exhaustion, addressing several critical needs:

Lower Capital Requirements

Purchase Cost Barrier: At $35-$55 per IPv4 address, purchasing significant blocks requires substantial capital:

• A /24 block (256 addresses): $8,960 to $14,080
• A /22 block (1,024 addresses): $35,840 to $56,320
• A /20 block (4,096 addresses): $143,360 to $225,280
• A /16 block (65,536 addresses): $2,293,760 to $3,604,480

For startups, small businesses, and organizations with limited budgets, these purchase prices are prohibitive. Even mid-sized companies may struggle to justify allocating hundreds of thousands of dollars to IP address acquisition.

Leasing as Alternative: IPv4 leasing provides access to the same addresses for $0.25-$0.55 per IP per month:

• A /24 block: $64-$141 monthly ($768-$1,692 annually)
• A /22 block: $256-$563 monthly ($3,072-$6,756 annually)
• A /20 block: $1,024-$2,253 monthly ($12,288-$27,036 annually)

This represents a 100x reduction in initial capital requirements, making IPv4 addresses accessible to organizations that couldn't afford purchases.

Flexibility for Changing Needs

Variable Demand: Many organizations experience fluctuating IP address needs:

• Seasonal businesses (e-commerce during holidays, tax preparation services)
• Project-based work (marketing campaigns, product launches)
• Testing and development environments
• Temporary capacity expansions

Scaling Advantages: Leasing allows organizations to:

• Quickly scale up during high-demand periods
• Scale down when needs decrease, avoiding sunk costs
• Test new services without committing to permanent purchases
• Adjust block sizes as actual usage patterns emerge

No Long-Term Commitment: Organizations uncertain about long-term IPv4 needs can lease temporarily while:

• Evaluating business model viability
• Determining actual IP requirements
• Completing IPv6 transition planning
• Assessing market conditions for potential purchase

Short-Term and Temporary Projects

Project Duration: Many legitimate business needs are inherently temporary:

• Limited-time marketing campaigns requiring dedicated infrastructure
• Development and testing of new products or services
• Temporary branch offices or pop-up locations
• Event-based infrastructure (conferences, temporary venues)
• Mergers and acquisitions during transition periods

Cost Efficiency: For projects lasting months rather than years, leasing is dramatically more cost-effective than purchasing. With break-even periods typically 3-4 years (or longer), purchasing IPv4 addresses for short-term projects wastes capital.

IPv6 Transition Bridge

Dual-Stack Reality: Most organizations deploying IPv6 maintain dual-stack configurations, operating both IPv4 and IPv6 simultaneously:

• Legacy systems and applications require IPv4
• Some regions and ISPs have limited IPv6 adoption
• Customer bases include IPv4-only users
• Third-party integrations may lack IPv6 support

Transition Strategy: Leasing provides a cost-effective bridge during IPv6 transition:

• Maintain necessary IPv4 presence without major capital investment
• Gradually reduce IPv4 footprint as IPv6 adoption increases
• Avoid being locked into large IPv4 purchases that may depreciate
• Preserve capital for IPv6 infrastructure investment

Uncertain Timeline: With IPv6 adoption still below 50% globally in 2025, the timeline for complete IPv4 phase-out remains unclear. Leasing provides flexibility to adapt as the transition progresses without predicting the future.

Market Dynamics and Leasing Growth

Supply and Demand Factors

Limited Supply: The fixed IPv4 address space means supply is fundamentally constrained:

• No new addresses are being created
• Released addresses (from defunct organizations) trickle back slowly
• Large holders (early allocations) release addresses gradually if at all
• RIR recovered address pools remain minimal

Growing Demand: Despite IPv6 availability, IPv4 demand remains strong:

• Emerging markets bringing new users online
• IoT device proliferation requiring connectivity
• Cloud service expansion (AWS, Azure, GCP)
• Content delivery networks expanding geographic coverage
• Cryptocurrency and blockchain infrastructure
• AI/ML infrastructure requiring extensive IP resources

Price Pressure: The supply-demand imbalance creates upward price pressure, making leasing increasingly attractive compared to purchasing.

Leasing Market Growth

Market Maturation: The IPv4 leasing market has evolved significantly:

• 2012-2015: Early experimental leasing arrangements
• 2016-2018: Specialized brokers emerge, market structure develops
• 2019-2021: Standardization of contracts and processes
• 2022-2025: Mature market with automated platforms, competitive pricing

Lease Price Stability: Interestingly, lease prices have remained relatively stable ($0.25-$0.55 per IP per month) even as purchase prices increased. This stability reflects:

• Competitive market with multiple lessors
• Lower margins acceptable to lessors than purchase profits
• Increased supply as organizations recognize leasing revenue potential
• Market efficiency improvements through specialized platforms

Market Participants: The leasing market includes diverse participants:

• LIR members with surplus allocations
• Data centers and hosting providers
• Telecommunications companies
• Legacy allocation holders (universities, corporations)
• Investment firms treating IPv4 as an asset class

Regulatory and RIR Policy Impacts

RIPE's Liberal Policies: RIPE NCC's elimination of needs assessment for transfers and permissive stance on leasing created a robust European leasing market. Many lessors operate primarily with RIPE-registered addresses.

ARIN's Pragmatic Approach: While ARIN policies are silent on leasing, the organization permits it, creating a secondary market in North America. The requirement that leased addresses don't count as "efficient utilization" for transfer justification maintains some policy control.

APNIC's Restrictions: APNIC's strict connectivity services requirement limits pure leasing models in Asia-Pacific, though creative structures (combining connectivity services with IP leasing) emerged to serve market demand.

Policy Evolution: RIR policies continue evolving. Lessors and lessees must stay informed about policy changes that could impact leasing arrangements:

• Changes to transfer policies
• New leasing-specific regulations
• Enforcement of existing policies
• Inter-RIR policy coordination

Business Cases for IPv4 Leasing

Startups and Small Businesses

Capital Preservation: Early-stage companies need to preserve capital for core business development:

• Product development
• Customer acquisition
• Team building
• Market validation

Spending tens of thousands of dollars on IPv4 addresses diverts critical resources from these priorities. Leasing provides necessary IP infrastructure for hundreds or thousands of dollars annually instead.

Uncertain Scaling: Startups face uncertain growth trajectories:

• Rapid growth requiring quick scaling
• Slower-than-expected growth creating excess capacity
• Business model pivots changing IP needs
• Potential business failure reducing needs to zero

Leasing provides flexibility to match IP resources to actual business growth without betting on specific outcomes.

Fast Deployment: Startups need to move quickly. Purchasing IPv4 addresses involves:

• Finding suitable blocks for sale
• Negotiating purchase terms
• Securing financing
• Completing inter-RIR transfers (potentially months)
• RIR approval processes

Leasing can provide production-ready IP addresses in days rather than months.

Cloud and Hosting Providers

Elastic Capacity: Cloud providers and hosting companies serve customers with variable needs:

• New customer onboarding requiring immediate IP allocation
• Customer churn returning unused IPs to available pool
• Seasonal demand variations
• Geographic expansion requiring regional IPs

Leasing allows these providers to maintain flexible capacity without massive IP address inventories.

Cost Optimization: Hosting providers operate on thin margins. Purchasing IP addresses ties up capital that could fund:

• Data center expansion
• Network infrastructure upgrades
• Customer acquisition
• New service development

Leasing converts capital expenditure to operational expenditure, improving cash flow and financial flexibility.

Geographic Diversity: Hosting providers need IP addresses in multiple regions with correct geolocation. Building owned IP portfolios across all regions requires enormous capital. Leasing enables geographic diversity without proportional capital investment.

ISPs and Telecommunications

Subscriber Growth: ISPs in growing markets need IP addresses for new subscribers:

• Rapid subscriber acquisition
• Uncertainty about long-term subscriber retention
• Competitive pricing pressure limiting capital availability

CGNAT Alternatives: While Carrier-Grade NAT (CGNAT) extends IPv4 availability, it creates technical limitations:

• Breaks some applications and protocols
• Complicates troubleshooting
• Reduces service quality for some users
• Regulatory issues in some jurisdictions

Leasing additional public IPv4 addresses allows ISPs to provide better service quality without full CGNAT deployment.

IPv6 Transition Planning: ISPs deploying IPv6 still need IPv4 for:

• Dual-stack operation
• IPv4-only customers and equipment
• Upstream provider connectivity
• Content delivery and peering

Leasing maintains necessary IPv4 presence during the multi-year IPv6 transition without betting on transition timelines.

Enterprise Networks

Branch Office Expansion: Enterprises opening temporary or trial branch offices need IP infrastructure:

• Pilot locations testing new markets
• Temporary project offices
• Seasonal locations
• Merger/acquisition transition facilities

Leasing provides necessary IP resources without committing to permanent infrastructure investments for locations that may close.

Development and Testing: Enterprise IT departments need realistic test environments:

• Production-like IP addressing
• External connectivity for integration testing
• Security testing requiring public IP addresses
• Temporary lab environments

Leasing test/dev IP blocks costs far less than purchasing addresses for non-production use.

Business Continuity: Some enterprises lease IP addresses for disaster recovery and business continuity:

• Failover sites requiring IP infrastructure
• Cold sites activated only during disasters
• Testing DR procedures requiring IP allocation

Maintaining leased addresses for rarely-used DR infrastructure is more economical than purchasing.

The Future of IPv4 Leasing

Long-Term Market Outlook

Sustained Demand: IPv4 leasing demand is expected to remain strong through at least 2030:

• IPv6 adoption continues gradually, not rapidly
• Legacy systems and applications require IPv4 indefinitely
• Dual-stack operation becomes standard practice
• New internet users in emerging markets need connectivity

Price Predictions: Market analysts forecast:

• IPv4 purchase prices gradually increasing to $50-$70 per IP by 2030
• Lease prices remaining relatively stable at $0.40-$0.60 per IP per month
• Increasing gap between purchase and lease costs strengthening leasing value proposition

Market Consolidation: The IPv4 leasing market may see consolidation:

• Larger platforms acquiring smaller brokers
• Specialized leasing companies emerging
• Integration with cloud and hosting services
• Standardization of contracts and processes

Leasing and IPv6 Coexistence

Complementary Resources: IPv4 leasing and IPv6 deployment are complementary rather than competitive:

• Organizations deploy IPv6 while leasing IPv4 for compatibility
• Dual-stack operation becomes standard
• Leasing provides flexibility during decades-long transition

IPv6 Leasing: While IPv6 addresses are abundant, IPv6 leasing may serve niche purposes:

• Organizations without RIR relationships
• Temporary need for provider-independent IPv6
• Testing IPv6 deployment before requesting allocations

However, IPv6 leasing will remain a small market compared to IPv4 leasing.

Technology and Market Innovation

Automated Platforms: The leasing market is becoming increasingly automated:

• Automated provisioning and de-provisioning
• Real-time pricing based on demand
• Integration with cloud orchestration systems
• Streamlined contract management

Fractional Leasing: Some platforms enable leasing of individual IPs or very small blocks, making leasing accessible to even the smallest organizations.

Reputation Management: Advanced reputation monitoring and automated blacklist remediation are becoming standard lessor services, improving lease quality and reliability.

How Via-Registry Helps

Via-Registry provides comprehensive IPv4 leasing solutions designed for the post-exhaustion environment:

Clean, Verified Addresses: All leased IP blocks undergo rigorous reputation verification:

• Comprehensive blacklist checking
• Historical usage analysis
• Geolocation verification
• Routing validation

Flexible Terms: We offer leasing arrangements tailored to your needs:

• Short-term leases (monthly)
• Long-term leases (multi-year with discounts)
• Flexible scaling options
• Lease-to-own pathways

RIR Compliance: We ensure full compliance with all applicable RIR policies:

• Proper RIPE database registration
• ARIN policy adherence
• APNIC compliance for Asia-Pacific addresses
• Inter-RIR coordination for international needs

Technical Support: Our team provides comprehensive technical assistance:

• BGP routing configuration
• DNS and reverse DNS setup
• Reputation monitoring
• Routing troubleshooting
• 24/7 support availability

Transparent Pricing: No hidden fees or surprise charges:

• Clear per-IP monthly rates
• Volume discounts for larger blocks
• No setup fees
• Flexible payment terms

Start Your IPv4 Lease: Explore our IPv4 leasing services or contact our team to discuss your specific requirements.

Summary

IPv4 exhaustion fundamentally changed how organizations obtain IP addresses:

Key Takeaways:

• IANA and all five RIRs exhausted IPv4 allocations between 2011-2019
• IPv4 purchase prices reached $35-$55 per address by 2025
• IPv4 leasing emerged as a cost-effective alternative at $0.25-$0.55 per IP monthly
• Leasing provides flexibility for changing needs without major capital investment
• The secondary market and leasing will remain essential for decades during IPv6 transition
• RIR policies significantly impact leasing arrangements and must be understood
• Leasing serves diverse use cases from startups to enterprises and ISPs

Why Leasing Matters:

• Makes IPv4 addresses accessible to organizations with limited capital
• Provides flexibility for uncertain or changing IP requirements
• Offers cost-effective solutions for temporary projects
• Bridges the gap during IPv6 transition
• Enables rapid deployment without lengthy purchase processes

For a comprehensive understanding of IP address leasing, read our complete IP Address Leasing Guide.