Lu Heng & The AFRINIC IPv4 Address Market

A recent Wall Street Journal profile of Lu Heng an entrepreneur who owns and leases over 10 million IPv4 addresses originally allocated to Africa—sparked global attention not just because of his unconventional business model, but because it exposed a deeper structural issue: the world still depends heavily on IPv4, Africa holds the last meaningful reserves, and the governance system that allocates IP resources was never designed for the modern market that has emerged around them.

Lu’s rise in the secondary market did not create these pressures. It simply made them impossible to ignore.

Africa Has the Last Unused IPv4 Addresses

How regional internet registries work—and how one region became a bottleneck

IP addresses are administered not by one global authority but by five regional internet registries (RIRs): ARIN, RIPE, APNIC, LACNIC, and AFRINIC. Each manages allocations within its respective geography.

By the 2010s, all RIRs except AFRINIC were effectively out of IPv4. Africa, with its later internet adoption curve, still had supply—creating an imbalance:

• Global companies still needed IPv4 for compatibility
• IPv6 was growing, but not fast enough
• IPv4 prices were rising
• Few enforceable policies restricted out-of-region use

For entrepreneurs, Africa became the last reservoir of unclaimed legacy IPv4 space. AFRINIC, the least-resourced registry, suddenly bore disproportionate global attention and pressure.

Why Leasing Became a Multimillion-Dollar Market

IPv4 scarcity has transformed address space into a real economic asset. Organizations around the world need IPv4 to maintain servers, cloud applications, and customer-facing systems—even AI and modern data centers often require dual-stack configurations.

Because regional supply is gone, a global leasing market formed:

• IPv4 blocks trade for $45–$60 per address
• Holders lease unused space at recurring revenue
• Brokers facilitate transfers, reassignments, and routing arrangements

One unresolved question sits at the heart of the AFRINIC controversy: Can IP addresses allocated in one region be used—or effectively transferred—elsewhere?

Registries discourage cross-regional movement, but enforcement varies, and early AFRINIC policies left gaps that entrepreneurial actors could use. Lu’s companies argued that leasing outside the region was allowed under the rules at the time; AFRINIC later argued it was not.

Where Policy Didn’t Keep Pace With the Market

As IPv4 became monetized, AFRINIC’s policy structure—designed to manage technical resources, not financial assets—struggled to respond.

Beginning in 2020, AFRINIC attempted to reclaim millions of IPv4 addresses from Lu’s companies, sparking extensive litigation in Mauritius and other jurisdictions. One of Lu’s lawsuits even petitioned for the dissolution of AFRINIC.

In 2021, a court action froze AFRINIC’s bank accounts, pushing the organization into receivership. This had real consequences for African networks:

• IPv4 allocations stalled
• Infrastructure growth slowed
• ISPs faced rising costs and capacity constraints

Africa had IPv4 left, but could not allocate it—just as demand for broadband, mobile services, and enterprise connectivity was accelerating.

Regional Governance, Global Stakes

The IPv4 market is global, but the governance model is regional. This mismatch creates predictable friction:

• Policies differ across RIRs
• Transfers are inconsistently regulated
• Jurisdiction becomes unclear when resources are routed internationally
• Regional registries lack tools to police global markets

No one designed it this way. IPv4 was never meant to be bought, sold, or leased; it was a technical resource distributed in an era of assumed abundance. But scarcity changed everything—and exposed the limits of a governance system not prepared for real economic pressure.

Why the World Still Relies on IPv4—Even for Cutting-Edge Tech

IPv6 was intended to make IPv4 scarcity irrelevant. Despite its enormous address space, adoption remains uneven—even in advanced industries.

Modern realities complicate migration:

• Cloud platforms and AI data centers still maintain IPv4 compatibility layers
• Consumer hardware often ships with incomplete IPv6 support
• Mobile networks rely on translation systems tied to IPv4
• Dual-stack deployments are costly for enterprises and emerging markets

As long as interoperability requires IPv4—and as long as IPv4 is easier and cheaper to use in many contexts—the market will continue to value it.

The Need for Global IP Standards

AFRINIC’s turmoil highlights how urgently the world needs clearer, harmonized rules for IPv4 management. The address system now functions like an asset class, but it is governed as if it were a purely technical resource.

A modern framework would include:

• clearer expectations for out-of-region use
• transparent leasing and transfer guidelines
• coordinated enforcement between RIRs
• protections for developing regions
• incentives that accelerate IPv6 adoption