Raising the price would solve the issue overnight. It doesn't need to be a uniform price increase, either - ICANN can guess which domain names are likely to be pricey based on length, dictionary words, or other heuristics. It can't be that hard. There's no reason why every domain name needs to cost the same amount per month. Domain squatters only do this because it's economically viable for them to register 10K domain names and just extort anyone who wants to do anything productive with them.

Also, ICANN should directly auction expiring domain names themselves. It's infuriating that when a domain name expires, whoever has the fastest script pays $10 and then immediately resells it for $100K to whoever actually needed it.