IPv4 Exhaustion and Price Surges: What’s Really Driving the Costs

Why IPv4 Exhaustion Suddenly Matters to Your Hosting Budget

Over the last few years, many of our customers have started asking the same question in cost review calls: “Why did the line item for IP addresses jump so much when everything else looks stable?” The answer is almost never a hidden fee or a new upsell. It’s the direct result of a systemic problem on the global internet: IPv4 exhaustion and the surge in IPv4 prices.

Every website, VPS, dedicated server and application ultimately needs an IP address to be reachable. For decades, IPv4 was the only game in town. The pool of available IPv4 addresses is now effectively depleted at the regional internet registry (RIR) level, so providers like us can no longer simply “request more” the way we did in the 2000s. Instead, IPs are being bought, sold and transferred on a secondary market where prices have been climbing year after year.

In this article, we’ll walk through what IPv4 exhaustion really means, why prices are rising, how it affects shared hosting, VPS, dedicated servers and colocation, and—most importantly—what you can do to protect both your infrastructure and your budget. We’ll also share the practical strategies we use at dchost.com when planning new projects in a world where IPv4 is scarce but your services still need to stay online and affordable.

How We Got Here: A Short, Practical Timeline of IPv4 Exhaustion

To understand today’s price surges, it helps to know how we ended up with an exhausted address space in the first place. This isn’t a sudden crisis; it’s the result of decades of design choices and growth.

IPv4’s Design Limits

IPv4 uses 32-bit addresses. That means, in theory, around 4.3 billion unique addresses. When IPv4 was designed, nobody imagined we’d have billions of smartphones, smart TVs, IoT sensors and cloud workloads all asking for public connectivity. Worse, early allocations were very generous—entire “/8” blocks (over 16 million addresses) were given to individual organizations when the internet was still tiny.

RIRs and the Run-Out Phases

The global IPv4 pool is managed by five Regional Internet Registries (RIRs): ARIN, RIPE NCC, APNIC, LACNIC and AFRINIC. Each went through a “run-out” phase where they exhausted their freely allocatable IPv4 pool and moved to strict, tiny allocations or waiting lists.

• Some regions started enforcing smaller maximum allocations and tighter justification policies.
• Eventually, RIRs reached a point where they could no longer issue meaningful new blocks. What remains are crumbs, reclaimed space, and special-purpose allocations.

We’ve covered the policy side of this in more detail in our articles about RIPE NCC’s new IP allocation rules and how IPv4 scarcity reshapes IPv6 strategy and ARIN’s updated IPv4 transfer policies, but the short version is: the free era of IPv4 is over.

The Rise of the IPv4 Transfer Market

Once RIR pools ran dry, IPv4 effectively became a traded asset. Organizations that had “extra” legacy space began selling it to those who needed more. This created a transfer market where pricing is guided by supply and demand, not by a central authority.

For hosting providers and network operators, this means that acquiring new IPv4 space often requires:

• Finding a seller (directly or via a broker).
• Paying a per-address price that has been increasing for years.
• Covering legal, compliance and transfer processing costs.

These acquisition costs don’t stay on the balance sheet forever; they eventually surface in retail pricing for IP addresses, dedicated servers and some VPS plans.

Why IPv4 Prices Are Surging Instead of Stabilizing

It’s tempting to assume that once we know IPv4 is scarce, prices would stabilize at a new normal. In reality, several forces are still pushing them upward.

Classic Supply and Demand—But With No New Supply

Unlike many resources, there is no way to manufacture more IPv4. All we can do is reclaim unused space and redistribute it. Meanwhile, demand continues to grow because:

• More services are going online: SaaS platforms, APIs, gaming servers, remote desktops, VPN endpoints.
• Many enterprises and institutions still insist on public IPv4 for each external-facing service.
• Some legacy applications can’t handle IPv6 or NAT well and “require” their own public IPv4.

When demand goes up but supply is essentially fixed, prices have only one direction to go.

Compliance, Routing Hygiene and Security Overhead

Transferring IPv4 blocks isn’t just a handshake deal. There is significant overhead around:

• RIR policy compliance and documented justification of need.
• Updating routing records and routing security (RPKI ROAs, IRR objects).
• Due diligence to avoid buying space associated with spam, abuse or blocklists.

All of this adds time and cost. Providers that buy clean, routable IPv4 space and operate it responsibly are absorbing these costs before an address ever reaches your VPS or dedicated server configuration.

Speculation and “Holding” Behavior

In some regions, IPv4 has become a kind of digital real estate. Organizations that hold large blocks may decide to sell slowly, expecting prices to continue climbing. That “holding” behavior reduces the effective supply available on the market and contributes to current price levels.

We’ve written separately about why IPv4 address prices are hitting record highs and when they might ease, but in practice, we’re still closer to the peak than the plateau.

What IPv4 Exhaustion Means for Shared Hosting, VPS and Dedicated Servers

Let’s move from theory to the real-world impact you’ll see in hosting plans and infrastructure design. At dchost.com, this shapes how we plan capacity, design network architecture and price services across shared hosting, VPS, dedicated servers and colocation.

Shared Hosting: Shared IPv4 and the Role of SNI

On modern shared hosting, it’s perfectly normal for dozens or even hundreds of websites to share a single IPv4 address. Thanks to Server Name Indication (SNI) in TLS, each site can still have its own SSL certificate on the same IP.

This sharing model keeps shared hosting very cost-effective, even with rising IPv4 prices, because the cost of that public IP is amortized across many customers. You’ll usually only see separate IP charges if you ask for a dedicated IPv4 (for example, for legacy integrations or specific compliance reasons).

VPS Hosting: When Does a Dedicated IPv4 Really Matter?

Most VPS plans include at least one dedicated IPv4 address by default, because:

• It simplifies firewalling and reverse DNS (PTR) configuration.
• It reduces the risk of “neighbor noise” on the same IP for email and reputation.
• Some protocols and whitelisting workflows still assume one-tenant-per-IP.

Where IPv4 exhaustion shows up is when projects start needing multiple IPv4s per VPS—separate IPs for staging/production, multiple SSL endpoints, or individual customer environments. This is where we encourage customers to revisit their requirements and see whether IPv6, SNI and reverse proxies can reduce IPv4 consumption without sacrificing functionality.

If you’re evaluating managed vs unmanaged VPS for a growing project, our guide on managed vs unmanaged VPS responsibilities and hidden costs is a good companion read; IP strategy is a key part of that cost picture now.

Dedicated Servers and Colocation: IP Blocks and Real Costs

Dedicated servers and colocation are where IPv4 pricing becomes most visible, because these setups often require multiple IPs or entire subnets:

• Separate IPv4 addresses for load balancers, application servers and management interfaces.
• /29, /28 or larger subnets for virtualization, routing or BGP.
• IP blocks used for multi-tenant hosting environments, reseller hosting or SaaS platforms.

In these scenarios, even a modest price per IPv4 address adds up quickly. For example, a /28 (16 addresses, 13 usable) or /27 (32 addresses, 29 usable) multiplied by a per-IP monthly or annual rate can become a meaningful part of your overall hosting or colocation bill.

That’s why we spend time with customers during architecture and capacity planning sessions to right-size their IP needs instead of simply allocating “one /24 per server” like in the old days.

Email Reputation, Blacklists and the Value of “Clean” IPv4

If you send transactional or marketing email from your hosting environment, IPv4 scarcity intersects with deliverability. A “cheap” IPv4 that comes with a history of spam or abuse can cost you far more in lost deliverability than you saved on address fees.

We regularly help customers with dedicated IP warmup and email reputation management. A clean, well-managed IPv4 with proper PTR, SPF, DKIM and DMARC is almost always worth more than a randomly acquired IP with unknown history.

Technical Strategies to Reduce Your Dependence on IPv4

Good news: you are not powerless in the face of IPv4 price inflation. There are concrete architectural choices you can make to use IPv4 more efficiently while preparing your stack for a future where IPv6 is dominant.

Adopt Dual-Stack: IPv4 + IPv6 Together

The most realistic model for the next decade is dual-stack hosting, where services are reachable over both IPv4 and IPv6. This gives you the best of both worlds:

• Existing IPv4-only clients and systems continue to work.
• IPv6-capable users connect over IPv6, reducing pressure on your IPv4 pool and NAT.
• You gradually test, monitor and optimize IPv6 without a big-bang migration.

We’ve shared a practical roadmap for this in our article on accelerating IPv6 adoption without breaking your network. If you’re running your own VPS or dedicated server, you can also follow our step-by-step IPv6 setup guide for VPS servers.

Consolidate Services Behind Reverse Proxies

Instead of giving every service its own IPv4, you can consolidate behind a reverse proxy or load balancer:

• Use Nginx or HAProxy on a single IPv4 to route traffic by hostname to multiple backend services.
• Terminate TLS on the proxy and route plain HTTP internally over private subnets (IPv4 or IPv6).
• For microservices, expose only a small set of public-facing entrypoints instead of many ports and IPs.

This pattern is especially powerful for agencies hosting many client sites on a cluster or for SaaS platforms that need per-customer isolation at the application level, not necessarily at the IP level.

Use IPv6 for Internal Traffic Wherever Possible

Even if your edge still needs IPv4, your internal network doesn’t have to. You can:

• Assign IPv6 addresses to all internal services (databases, caches, message brokers).
• Keep only a small set of IPv4 addresses at the edge for public access.
• Use internal-only IPv6 networks for backups, replication and monitoring, avoiding private IPv4 fragmentation.

This reduces your need for routable IPv4 and simplifies growth: adding a new internal server doesn’t consume another public IPv4; it just gets an IPv6 address and participates in the private fabric.

Rethink When You Truly Need a Dedicated IPv4

Not every use case that historically demanded a dedicated IPv4 still needs one today. Consider these questions during design or migration:

• SSL/TLS: Can we use SNI instead of allocating a separate IP per certificate?
• Email: Do we need multiple sending IPs, or can volume management and warmup on a single dedicated IP suffice?
• VPN / Remote Access: Can different services share a single IP on different ports, or is there a hard requirement for separate IPs?

Each IPv4 you avoid consuming is one less address you need to buy or lease at rising market prices.

Implement Smart Logging and IP Masking

IPv4 scarcity often leads to more use of NAT and shared IPs, which complicates logging and compliance. At the same time, regulations like GDPR and KVKK push you to be careful with how you store IP addresses.

We recommend combining:

• Clear mapping between NAT logs and internal client identifiers.
• IP anonymization or truncation in long-term logs where full addresses aren’t required.
• Retention policies that balance forensic needs with privacy rules.

Our guide on log anonymization and IP masking for KVKK/GDPR-compliant hosting logs goes into the practical details of how to do this correctly.

How We Approach IPv4 Scarcity at dchost.com

From our side as a hosting provider, IPv4 exhaustion isn’t an abstract topic—it’s something we work around in almost every new capacity planning meeting.

Capacity Planning with a Hard IPv4 Budget

When we design new shared hosting clusters, VPS nodes, dedicated server offerings or colocation racks, we now start with a very explicit IPv4 budget:

• How many public IPv4 addresses can we responsibly allocate to this environment?
• Where can we use IPv6 or private addressing with NAT instead?
• How do we preserve flexibility for future customers without over-committing scarce IPs today?

This approach ensures that the IPv4 we do assign to customer services remains sustainable as the market evolves.

Transparent IP Pricing and Justification

We are careful to keep IPv4-related pricing as transparent as possible. When a plan includes one or more IPv4 addresses, that inclusion is explicit. When you request additional IPs—for example, for a cluster of dedicated servers or a specific colocation setup—we’ll walk through:

• Why those IPs are needed and whether there is a less wasteful alternative.
• How many are required now versus in a future scaling phase.
• What the recurring cost impact will be, and how it compares to architectural alternatives.

This isn’t gatekeeping; it’s about helping you avoid paying for IPs you don’t truly need in a world where every extra IPv4 has a noticeable cost.

Encouraging IPv6 From Day One

On new projects—whether that’s a VPS for a SaaS MVP, a dedicated server for a WooCommerce store, or a multi-node setup for an agency—we strongly recommend enabling IPv6 from the start. It’s far easier to add good IPv6 support when you’re still designing your stack than to retrofit it later under pressure.

Our other articles on IPv6-only vs dual-stack hosting and what rising IPv6 adoption rates mean for your infrastructure are good resources if you’re currently designing a new environment with us.

Policy and Market Changes You Should Keep an Eye On

The IPv4 story isn’t static. RIR policies, routing security expectations and even global economic conditions can shift how easy or expensive it is to obtain IPv4 space. A few areas we watch closely on behalf of our customers:

RIR Transfer and Allocation Policies

Organizations like ARIN and RIPE NCC periodically refine how transfers and allocations work. Changes can affect:

• Minimum and maximum block sizes you can acquire.
• Justification requirements and documentation burden.
• Waiting list behavior and reclaimed address pools.

Even if you are not requesting space directly from an RIR, your provider is—and these rules flow into the retail market. Articles like our deep dives on ARIN’s IPv4 transfer policy updates and RIPE NCC’s allocation changes are worth revisiting before you plan a major multi-year IP-dependent project.

Routing Security (RPKI, IRR) and Reputation Baselines

There is a slow but steady move toward better routing security via RPKI (Resource Public Key Infrastructure) and cleaner Internet Routing Registry (IRR) data. This matters because:

• Providers want to make sure the IPs they use are correctly authorized and visible.
• Large networks are increasingly filtering out routes that look suspicious or lack RPKI validation.
• Reputation systems (anti-spam, DDoS intelligence, abuse feeds) track behavior per-IP and per-prefix more closely than ever.

All of this increases the value of well-managed, clean IPv4 space and reinforces the trend that real, usable IPv4 is a premium resource, not a commodity.

Turning IPv4 Scarcity Into a Concrete Action Plan

So, what should you actually do with all this information? Here’s how we suggest turning IPv4 exhaustion and price surges into a realistic roadmap instead of a constant headache.

Next 0–3 Months: Get Visibility and Eliminate Waste

• Inventory all IPv4 addresses you’re using across shared hosting, VPS, dedicated servers and colocation.
• Identify IPs allocated “just in case” that are no longer needed or can be consolidated.
• Review any legacy demands for separate IPs per SSL certificate or per site; switch to SNI where possible.
• Talk to our team about where your current plans include IPv4 and where you might be over- or under-provisioned.

Next 3–12 Months: Start or Accelerate Dual-Stack Deployment

• Enable IPv6 on your VPS or dedicated servers and test reachability from major access networks.
• Configure AAAA records in DNS alongside existing A records.
• Monitor traffic splits to see how many users are already connecting over IPv6.
• Migrate internal service-to-service traffic to IPv6 where practical.

Next 1–3 Years: Design New Projects with IPv6-First Thinking

• For new SaaS or multi-tenant platforms, assume an IPv6-first internal design with a small, stable IPv4 edge.
• Plan growth in terms of IPv6 addresses and only request additional IPv4 blocks when absolutely necessary.
• Include IPv4 costs and availability as explicit items in your long-term capacity planning and budgeting.

Conclusion: IPv4 Scarcity Is Real, But It Doesn’t Have to Derail Your Plans

IPv4 exhaustion and price surges can feel abstract until they show up as a noticeable line in your hosting invoice or as a roadblock when you’re trying to launch a new product. The reality is simple: the easy era of “infinite free IPv4” is over, and we’re now operating in a world where addresses are scarce, carefully managed resources.

The good news is that you’re not stuck. By understanding why IPv4 prices are rising, using your existing addresses more efficiently, and embracing IPv6 and dual-stack architectures, you can keep your infrastructure sustainable without endless cost surprises. From our side at dchost.com, we’re doing the same work every day: optimizing how we allocate IPv4, expanding IPv6 support across our platforms, and designing hosting, VPS, dedicated server and colocation offerings that stay practical in a market where IP addresses behave more like assets than utilities.

If you’re planning a new project, reviewing your existing hosting architecture or just want a clear view of how IPv4 costs might evolve for your business, reach out to our team. We’re happy to look at your current setup, suggest realistic IPv4 and IPv6 strategies, and help you choose the right mix of shared hosting, VPS, dedicated servers and colocation so that IPv4 exhaustion becomes a solved constraint—not a constant source of surprises.