We’re living in exciting times. The Web3 universe is certainly one of the important factors that is generating that wave of excitement, captivating individuals who crave the endless possibilities it offers. By breaking free from centralized control, Web3 empowers users to collaboratively build digital ecosystems, earn crypto tokens, and thrive in a decentralized online world.
The internet undergoes a transformative shift. As Web3 rapidly evolves, we will uncover the most promising avenues to invest and profit from this new era of the Internet.
What Exactly Is Web3?
Often hailed as the future of the internet, Web3 is a revolutionary concept that brings forth exciting investment opportunities. It represents the next phase of the internet, surpassing its predecessors, Web1 and Web2, in terms of efficiency, security, and user empowerment.
The expression originates from Polkadot founder Gavin Wood, who coined the term back in 2014.
Web3 is still in its early stages, presenting immense growth potential. The global market for Web3 is projected to soar to $45.41 billion by 2030, with a Compound Annual Growth Rate (CAGR) of 41.50% compared to 2023. Investing in Web3 means getting in on the ground floor of an industry on the brink of exponential growth and securing a stake in future businesses.
This transformative shift embraces decentralized technologies such as NFTs, blockchains, DeFi platforms, and VPNs, revolutionizing the way individuals control and monetize their data. The ecosystem aims to eliminate relying on third-party intermediaries—Web3 empowers users to directly access the internet and verify transactions, unlocking profitable opportunities for those prepared for this paradigm shift.
Web3 embodies the vision of a decentralized and user-centric internet, where businesses and content creators reclaim control over their data. Join us as we delve deeper into the potential of Web3 and explore how investing in this emerging landscape can shape the future of the internet.
Web3 Ecosystem in a Nutshell
Although not synonymous with blockchain, the technology is actually the backbone of Web3. Smart contracts on networks such as Solana or Ethereum allow individuals to create decentralized protocols and non-fungible tokens (NFTs).
Decentralized protocols have introduced a completely new way of building a business. The teams are able to give a stake in the project directly to its community members by airdropping tokens to users – thus empowering them with a decision-making voice in future developments and company governance.
On the other hand, NFTs represent the brand new form of content creation, allowing artists to sell their work directly to their supporters, while providing them with access to exclusive content and participation in the community of followers.
Investing in Web3: Where Are the Opportunities?
Let’s take a look at the crucial types of assets that allow you to enter the next iteration of the internet and take advantage of it.
Investing in Web3 Companies
To seize the burgeoning investment potential of Web3, consider purchasing stocks of established Web3 companies like AMD, Coinbase, Unity Software, or Mata. These companies have already made significant strides in the Web3 landscape and are poised for further growth.
Another option that can be also very lucrative is to invest in smaller Web3 startups. These early-stage companies develop highly innovative, potentially disruptive products and services, offering the opportunity to capitalize on their potential to become future industry leaders.
The platforms such as Crunchbase regularly publish news and comprehensive reports on trending Web3 startups.
Investing in the Metaverse
The Metaverse, a fully immersive virtual reality, presents a compelling investment opportunity within the Web3 realm. By purchasing virtual assets and acquiring virtual real estate in platforms like Decentraland, investors can participate in the evolving Metaverse landscape. Embracing NFTs, unique digital assets, and exploring various Metaverse applications can unlock a world of investment possibilities.
Investing Through DAOs
Decentralized Autonomous Organizations (DAOs) offer a unique investment avenue within Web3. These organizations, built on blockchain technology, allow individuals to invest in projects aligned with their beliefs and interests. By acquiring DAO crypto tokens, investors gain voting rights and participate in the growth and decision-making of the organization. Research and identify DAOs that resonate with your values and aspirations.
Investing in Cryptocurrencies
Cryptocurrencies play a pivotal role in Web3 and provide direct exposure to this emerging landscape. Investing in established cryptocurrencies such as Solana, Ethereum, Polkadot, and Chainlink allows you to support the blockchain infrastructure that underpins Web3 functionalities. Moreover, participating in crypto mining or crypto staking can generate additional returns. Keep in mind that thorough research is crucial before investing in any Web3 project or cryptocurrency.
As the Web3 gains momentum, investing in Web3 companies, exploring the Metaverse, engaging with DAOs, and embracing cryptocurrencies present dynamic avenues for investors to tap into the potential of this new internet era. Conduct thorough due diligence, diversify your portfolio, and stay updated on the evolving Web3 landscape to make informed investment decisions that align with your goals and risk tolerance.
Active Vs. Passive Web3 Investing
First, let’s explain the difference between investing actively and passively. Passive investing involves long-term holding of digital assets and accruing value based on that. As an active investor, you become a direct participant in developing the Web3 space.
Here’s a breakdown of steps that you should take in order to become a web3 investor:
- Decide whether you’d like to invest passively or actively
- Decide on startups, coins, projects, or NFTs you want to support
- Allocate assets based on due-diligence, and equally important, based on your risk tolerance
- Closely watch your investments and rebalance the portfolio based on developments on the market
To engage in passive investing, you can purchase an established portfolio created for your specific goals, such as crypto index. You can do so at established crypto exchanges like Bitpanda, or using a Coinbase wallet. It’s also a good idea to use crypto-focused robo advisors like Wealthfront, Titan, Coinrule or M1 Finance.
If you’re looking to actively engage with the progress of Web3 while pursuing investment opportunities, there are various avenues to consider:
Seek employment with Web3 companies. Joining a Web3 company can provide an immersive experience and allow you to contribute directly to the development of this new internet era.
Explore web3 projects with rewards. Discover and benefit from Web3 projects that offer rewards for activities like staking tokens, participating in gameplay, or other engagement methods.
Keep an eye on airdrops. Stay informed about crypto communities who distribute tokens for free to eligible members, providing an opportunity to acquire assets without direct investment.
Invest in cryptocurrencies from growing Web3 companies. Purchasing tokens issued by thriving Web3 startups can offer a potential investment avenue as their projects and platforms gain traction.
Engage in crypto mining. Mining the most popular cryptocurrencies can generate returns based on the computational power contributed.
Hold Crypto strategically. Consider buying and holding while prices are relatively low, anticipating their potential appreciation in the future.
Invest in web3 stocks on traditional stock markets. Web3 companies are listed on traditional stock exchanges like Interactive Brokers and Fidelity. You can start by simply downloading their investment apps.
Use crypto lending platforms. You can access additional investment capital with cryptocurrency lending platforms, which allow you to borrow or lend against your existing holdings.
Other Ways of Web3 Investing (If You Lack Money)
Here are a couple of avenues worth exploring if you don’t have enough financial resources to engage in more serious Web3 investments:
Take advantage of cryptocurrency browsers that reward you for various activities, such as viewing ads. Brave Browser, a widely recognized option among crypto enthusiasts, offers rewards in the form of Basic Attention Token (BAT) for interacting with ads while browsing the internet.
Play games that offer crypto rewards as you progress. For instance, sites like PlayToEarn list the most popular blockchain-powered games where you can earn tokens by winning battles, completing missions or collecting fantasy creatures.
Web3 Investing Risks
When considering investments in Web3 projects, it is crucial to be aware of the potential risks involved. Here are a few key aspects to consider before making final decisions:
Uncertainty surrounding specific networks. The choice of blockchain on which Web3 will be built remains uncertain. While Ethereum is the most popular option, other smart-contract blockchains like Solana may pose even greater potential. Be aware that investing solely in one network may result in missing out on potential returns if future Web3 entrepreneurs and even Web2 multinational conglomerates opt for alternatives.
Promised vs. realized. Web3 companies often make ambitious claims that may not materialize as expected. It is advisable to conduct thorough research on the specific projects you are considering before committing to any investment.
NFT and protocol relevance over time. it is important to acknowledge that the success of these projects is not guaranteed, even in the event that Web3 reaches its full potential.
The Wrap Up
It is essential to stay updated, critically evaluate projects, and diversify investments to manage the inherent uncertainties within the evolving landscape of Web3.
Last but not least, here’s another excellent option for investors who’d like to enter the world of Web3. Platforms like Unique.vc offer you the opportunity to engage in collaborative ventures. It’s a completely decentralized, web3-native way to invest in emerging innovative companies from the industry, as an individual angel investor, or as a part of an investment syndicate or a VC fund.