How to Invest in Web3: Top 7 Strategies to Make Money (2022)
Not many days go by without a mention of Web3 or decentralization.
From Bitcoin to Ethereum, many decentralized projects have caught the attention of big tech companies, investors, and users that want to invest in digital assets.
Web3 is the next phase of the internet, where users are in control of their data, and applications are built on decentralized protocols.
While it may still be early days for Web3, there are several ways to get involved and invest in this emerging ecosystem.
In this article, I go through the top strategies when investing in Web3 so you make money from this new version of the web.
Let’s get right into it.
Web3 is a more user-centric internet, where you own more of your own data, and applications are built on decentralized protocols.
Using blockchain technology, Web3 also enables a more secure internet, where intermediaries are not needed to verify transactions.
This means that users can interact directly without needing a third party.
It also means that the investment opportunities for those that want to invest smarter and in the right digital asset are endless.
However, it is essential to note that not all digital assets are created equal.
Whether dealing with market data in the crypto world or figuring out data in terms of specific investment vehicles that form part of these new virtual worlds, it is essential to understand as much of the complete picture as possible before investing.
The first step in investing in Web3 is comprehending what it is and how it functions.
Active vs. passive investments play an essential role in the investment process.
Active investing is where the investor takes a more hands-on approach, deciding which specific investments to make.
This investing requires more time and effort and a greater understanding of the underlying asset.
In contrast, passive investing is where the investor takes a more hands-off approach, investing in a basket of assets that one hopes would provide a return on investment without much work on the person’s part.
This type of investing could be more straightforward and might require less time and effort.
Then again, it might be a good idea to keep both options open when it comes to this 3rd version of the world wide web.
The key is understanding the difference and making an informed decision about what type of investor you want to become.
Let’s now focus on the most crucial aspect of your investment journey in Web3: picking the right strategy.
Are you going to go all-in from the get-go?
Or are you going to take a more cautious approach?
Do you want to be an active investor or a passive one?
There is no right or wrong answer to these questions, as it depends on your personal preferences and goals.
However, it is essential to understand the difference between active and passive investing and the pros and cons of each approach.
Here are the top types of active investments you can make in Web3.
Finding a job in this arena can be one of the best investments in yourself you ever make.
Not only will you be able to learn about this exciting new industry from the inside, but you’ll also have the opportunity to earn a good income while doing it.
There are several ways to find work in crypto, and the best way for you will depend on your skills and experience.
Here are some ideas:
- Join a startup: Startups always look for talented individuals to help them build their businesses. This could be an excellent option if you have the skills and experience that a startup needs.
- Look for job postings online: There are several websites and forums where startups and businesses post job openings in the crypto industry.
- Attend crypto events: Crypto events are a great way to meet people in the industry and learn about new job opportunities.
Through Web3 developer platforms, you can also start to create your Dapps (decentralized applications).
Many people with past coding experience who are new to this industry don’t realize they have the skills and expertise necessary to build Dapps – yet getting the latest training will get you a big part of the way there.
With some training, those with experience can start building Dapps that provide value to the whole community.
Another active way to make money on Web3 is through AirDrops.
An Airdrop happens when a blockchain project gives away free tokens to the community.
This is usually done to promote their project and increase awareness.
Airdrops are a great way to get free tokens, and they can also be profitable if you know how to sell them.
Here are some tips for participating in airdrops:
- Find reputable airdrops: There are several scams in the crypto world, and airdrops are no exception. Make sure you only participate in airdrops from reputable projects.
- Join relevant Telegram groups: Telegram is a popular messaging app often used by crypto projects. Several groups discuss airdrops, which is a great way to stay up-to-date on the latest opportunities.
- Be patient: Airdrops can take weeks or even months to distribute the tokens. Don’t expect to get rich overnight with airdrops.
Once you get these tokens, you can hold them or sell them for a profit.
Remember that getting the right airdrops usually requires you to satisfy some criteria to qualify.
While not technically an investment, you can still get rewarded well for going through this process.
Mining is an integral part of how blockchains generate new digital assets, and it’s also a great way to earn some income.
This process can be done with various computer setups and doesn’t require much experience.
With Web3 technology getting better with each iteration when it comes to mining, it has become more profitable than ever to do so.
If you invest in this opportunity, make sure you do your research and understand both the equipment needed and the right way to go about it.
In addition, understanding the various graphic card models (especially knowing which Nvidia cards to go for) will allow you to optimize your rig for maximum profitability.
Many Web3 projects involve various games that are emerging.
Many of these feature a new play-to-earn model which allows users to earn cryptocurrency while playing.
This is done by players participating in activities that help to grow the game ecosystem, such as questing, staking, farming, or simply playing the game.
These games allow players to make the most of Web3 to have fun and earn digital assets when winning.
Platforms such as The Sandbox also allow users to monetize assets (like real estate) and gaming experiences to make a return on their investment.
Let’s now look at some of the different types of passive Web3 investments that you can make.
Cryptocurrencies are a type of digital asset that can be used as a store of value or a medium of exchange.
Bitcoin, Ethereum, and Litecoin are all examples of cryptocurrencies.
Investing in cryptocurrencies through suitable crypto exchanges and trading platforms is a great way to earn some passive income and an excellent way to hedge against inflation.
That said, cryptocurrencies are volatile, so you should only invest what you want to lose.
With platforms like Coinbase, Binance, and other Web3 ecosystems, it’s easier than ever to invest in cryptocurrencies.
Here are some comparison reviews of various popular crypto platforms to consider:
- Kraken vs. Coinbase
- Binance vs. Coinbase
- Crypto.com vs. Coinbase
- Gemini vs. Coinbase
- BlockFi vs. Coinbase
Lending platforms are online platforms that allow you to lend your crypto to borrowers in exchange for interest.
This is a great way to earn some passive income and an excellent way to diversify your portfolio.
There are several different lending platforms out there, so consider the pros and cons of each before deciding on the one to go with.
While peer-to-peer lending sites have been around for a while, crypto lending platforms are a relatively new phenomenon.
NFTs are digital assets allowing holders to own a piece of digital real estate.
NFTs are often used to represent things like art, music, or even virtual real estate.
You can buy NFTs through several different platforms, and the options have never been so huge.
With popular NFTs such as the Bored Ape Yacht Club being sold for over $2.25 million, it’s clear that there’s a lot of money to be made in this space.
If you’re looking for a way to earn some passive income, then investing in NFTs is something you should consider.
Various decentralized applications also allow you to use artificial intelligence to create your digital art, which one can then turn into NFTs.
Creating digital representations of real-world assets is a great way to earn some passive income and can be a great way to invest in Web3.
There are also tons of NFT stocks you can invest in, an investment tactic that combines traditional stock investing with the newer NFT popularity.
Let’s look at a few more bonus strategies you can consider.
Most of the following fall between the active/passive zones, meaning that knowing what the strategy is all about is essential before pulling the trigger.
Staking is about holding onto your crypto tokens to help support a network.
When you stake your tokens, you’re essentially giving up your right to sell them so that you can help verify transactions on the blockchain.
In return for your help, you’re rewarded with a share of the transaction fees.
Crypto staking platforms offer a great way to earn some passive income and provide various ways to support the Web3 projects you believe in.
There are several different staking platforms that you can use, and each one has its own set of rules and requirements.
Dividend-paying tokens are a type of cryptocurrency that allows holders to receive a share of the profits generated by the project.
This is usually done through a smart contract, a great way to earn passive income.
Dividend-paying tokens are often used to reward holders for participating in the project and can also be used to raise funds for the project.
Be sure to research before investing in any dividend-paying token, as there are several scams.
Buying stocks is a great way to earn some passive income, and it’s also an excellent way to hedge against inflation.
You can buy stocks in various Web3 companies through several platforms and invest in stocks through a Robo-advisor or investment app.
In addition, being aware of what’s happening worldwide can help you make better investment decisions.
For example, many people have recently bought stocks in the Metaverse despite the platform seeming less than ideal in its current state, so knowing what’s happening with the Web3 companies you invest in is critical.
Private markets are another great way to earn passive income through Web3.
These markets are usually online platforms that allow you to invest in private companies.
Platforms like OpenSea also allow you to buy and sell several different digital assets.
These include crypto-collectibles, game items, and even virtual real estate.
In addition, OpenSea also allows you to invest in many different protocols and platforms.
Chips are the modern-day equivalent of picks and shovels from the gold rush, and are a great way to earn additional passive income.
These are essentially computer chips that are used to mine cryptocurrencies.
With Web3 requiring computer power to function, the demand for chips will likely only increase in the future.
This makes chips an excellent long-term investment and one that you should consider if you’re looking to earn some passive income.
As always, keep in mind this is not investment advice, and you should do your research before making any investment.
Another investment option in Web3 comes with creating your personalized currency.
This is a great way to ensure that your money is being used in a way that you support, and it’s a great way to back a project or company that you believe in.
This can be done with ICOs (initial coin offerings), a type of crowdfunding that allows startups to raise capital by selling tokens.
An ICO resembles an IPO, or initial public offering, where a public company sells shares of itself to investors.
However, a company sells digital tokens instead of shares in an ICO.
These tokens can be used to purchase goods and services from the company, or they can be traded on cryptocurrency exchanges.
Creating your currency is a big responsibility, as you will need to manage the supply and demand of the coin, as well as its value.
While not a passive investment at the start, creating your currency can be a great way to support a company or project that you believe in, and it can also be a great way to make money if the currency becomes popular.
Decentralized finance platforms are online platforms that offer a wide variety of financial products and services without the need for a third party.
Platforms like Decentraland, Ethereum Name Service, and MakerDAO are just a few of the many Defi platforms available.
These platforms are where you can start getting creative with your investments and take advantage of the opportunities that Web3 offers.
Did you know that you can now sell NFTs on Shopify?
The big eCommerce platform now allows for the buying and selling of NFTs, which is a big deal for the world of Web3.
Using Shopify’s token gaming app partners and through the use of smart contracts, content creators and artists will be able to sell their work directly to fans with ease.
With what’s now commonly known as ‘Tokengated commerce,’ Shopify merchants will be able to take advantage of the growing popularity of NFTs and the potential income that can be generated from them.
If you want to invest in Web3, this is something that you should look into, as it can open up a whole new world of opportunities for you.
It’s also a good reminder about the importance of staying up to date with the latest trends and developments.
Knowing about the various wallets available for storing NFTs and cryptocurrency is critical.
There are two primary types of wallets known as hot and cold wallets.
Hot wallets are online wallets that are plugged into the internet.
This means they are more convenient to use yet more vulnerable to hacking.
Cold wallets are offline wallets that are not connected to the internet.
This makes them more secure but also less convenient to use.
The best way to store your digital assets is to use a combination of both hot and cold wallets.
Web3 wallets are one of the simplest ways to invest in Web3.
All you need to do is find a wallet that supports the assets you want to invest in and deposit your funds.
Once your funds are deposited, you can start buying and selling assets on the decentralized exchanges built into most Web3 wallets.
Staying on top of your assets and tracking your portfolio is also simple with Web3 wallets.
Most wallets have built-in features that allow you to view your transaction history, asset balances, and more.
This makes it easy to track your progress and make informed decisions about when to buy or sell.
The rise of virtual reality (VR) and augmented reality (AR) are two of the most important aspects of Web 3.0.
With these technologies’ help, we can experience digital content in a more realistic and immersive way.
This will significantly impact how we interact with the internet and change how we do business.
For those that want to invest in Web3, selling NFTs is something to consider as a means to make money.
NFTs are digital assets allowing holders to own a piece of digital real estate.
They are often used to represent art, music, or even virtual real estate.
Yes, machine learning is one of the most important aspects of Web 3.0.
The building blocks of Web 3.0, such as smart contracts and decentralized applications, will be powered by machine learning.
This means we can create more intelligent and efficient software that can learn from data and improve over time.
With giant venture capital firms like Andreessen Horowitz investing in this arena, it’s clear that this technology is here to stay and will be a big part of the future of the internet.
The hype that surrounds Web3 is in part due to social media.
As more and more people become aware of the potential of this technology, they are sharing it with their friends and followers.
This creates a snowball effect that helps to promote and legitimize the technology.
Whether it’s Bitcoin (BTC), Ethereum (ETH), Solana (SOL), or even stable coins that are pegged to USD, a successful Web3 company or project is likely to have a social media following.
Both in the short-term and long-term, social media can be a powerful tool for promoting and legitimizing Web3 technologies.
As more decentralized autonomous organizations (DAOs) emerge, social media will likely play an even more significant role in their success.
Web 3.0 is the next evolution of the internet, and it’s already starting to take shape.
With the help of blockchain, virtual reality, and machine learning, we can create a more decentralized and efficient internet.
If you’re thinking about investing in Web3, then now is the time to do your research and get involved.
The emerging opportunities are unlike anything we’ve seen before, and they will only get better from here.
What do you make of Web 3.0?
Do you think it’s something that you should invest in?
Let me know your thoughts in the comments below.