How to Invest in Web3

Web3 supports platforms for crypto, NFTs, and budding startups. The global blockchain market was valued at USD7.18 billion in 2023, with a projected market size of USD163.24 billion by 2029, assuming growth at a rate of 87.7% CAGR. 

Successful ICOs have garnered returns of approximately 1,320%. The NFT market was above USD 41 billion in 2021, showing increased interest in digital assets. Investors should be wary of the ever-fluctuating and risky nature of this space.

Web3 represents a decentralized future whereby users are allowed to seize control over the information, the properties, and the transacting activities. Entering into new investments in this digital infrastructure will reward you in a way but also has its risks.

This guide is on how it is possible to invest in Web3, making it a safe investment. Key technologies, investment strategies, and risks will be part of the information you will acquire. It will also cover applications based on blockchain, mobile, eCommerce, visionOS, and enterprise apps.

Read More: Top Web3 Wallet App Features

Web3 Explained: How It All Began

The phrase “Web3” was first used in 2014 by Ethereum co-founder Gavin Wood defined it as a “decentralized digital ecosystem built on blockchain.” It is a brand-new hybrid internet that intends to develop into a decentralized variant of the virtual community.

Web3 is being constructed, controlled, and owned by its users instead of being dominated by big tech companies. It employs Blockchain, cryptocurrencies, and NFTs to return control to the general public rather than to powerful businesses and tech giants.

Instead of the traditional way of payment, Web3 engineers and developers are compensated with crypto tokens. In addition, Web3 users have the freedom to decide which projects they wish to support and the opportunity to be paid handsomely by becoming Web3 investors.

Read More: A Complete Beginner’s Guide to Blockchain Technology

The Web3 Ecosystem

Since we are aware of the financial potential of Web3, let’s look at the different protocols, networks, and apps that are developing it. Web3’s strength, despite self-government, lies in its ability to be modular and interoperable.

Composability is the capacity to use assets and protocols as building blocks for more sophisticated applications. Composability enables programmers to create exceptional products more efficiently, eventually attracting more consumers to the sector. All of this is to imply more investment toward the Web3 ecosystems and to comprehend its modular components.

Layer 0

Blockchain networks may be constructed using platform-neutral protocols and virtual machines that make up Layer 0. Although layer 0s are not physically investable resources, they might lead you to channels with a large user base.

Layer 1

Blockchain systems that support the creation of apps and tokens on top of a distributed ledger, such as Bitcoin and Ethereum, are called layer 1s (L1).

Layer 2

Add-on solutions that predominantly make Layer 1s more robust are called Layer 2 (L2). L2s also include cross-chain gateways that let other platforms move their tokens between Ethereum and other networks.

Layer 3

Decentralized apps (dApps), adept at doing the desired complex tasks, make up Layer 3. These can sometimes be known as isolated applications that consumers utilize for engaging directly. However, Layer 3s primarily serve as elements that developers choose in their consumer-facing products.

Layer 4

The top layer in the hierarchy, Layer 4, is where users often start their Web3 experience. Therefore, instead of competing based on technological prowess, several Layer 4s elements attempt to offer the optimum user experience and customer service.

Read More: A Simple Guide to Web3 Development Stack

How to Invest into Web3: A Step-by-Step Guide

Before delving into investing in Web3, you have to take things step by step. Here is a very simple explanation guide for beginners:

Setting Up a Crypto Wallet

First, you need a crypto wallet for keeping all those digital currencies really safe; the most commonly used wallets are MetaMask and TrustWallet. Choose the one that allows development on dApps using important blockchains and back up the recovery phrase: you will lose your funds forever without it.

Choosing the Right Platforms

Opt for any of the popular sites like Coinbase, Binance, or Kraken since they offer pretty easy access to several tokens and are more secure. Try decentralized exchange development platforms for decentralized trading. Compare transaction fees, supported coins, and usability before settling on any of them.

Researching Projects and Tokens (DYOR)

Always do your research, otherwise known as DYOR. Study the team behind the project. Check their previous experiences in blockchain development or smart contract development. Read the white paper and roadmap. See if the project is attached to a real product like an AI app or metaverse app. 

Diversifying Your Web3 Portfolio

Never invest in the same token from every aspect. Diversify funds across various areas of Web3. These would include crypto wallet, NFT marketplace, and stablecoin development projects. DeFi staking platform development can also be part of it. A good balance in your portfolio helps lower risk and takes you closer to profit.

Read More: 6 Benefits of Real Estate Tokenization

Keeping Updating with Ecosystem Changes

Web3 changes quickly; therefore, keep up with the news sites, Youtube, and, of course, crypto Twitter. Join community groups on Discord or Telegram. Follow updates in digital asset tokenization and protocol development. Knowing what’s new helps with smart decisions and avoiding any scams.

“Web3 represents more than just the evolution of the internet; it signifies the future of digital ownership, driven by innovation and decentralized trust.”

– Salman Lakhani, CEO of Cubix

Who is building Web3?

By finding and investing in Web3, visionaries and investors are scheming to guarantee that their existing tech investments stay viable in the forthcoming era of technological revolution.

The most notable investors in Web3 are venture capitalists and tech giants, who consider Facebook’s approach to renaming themselves Meta as an indication of how firmly Web3 is being accepted.

Gavin Wood also founded the Web3 Foundation in Switzerland, which provides financing and training for Web3 initiatives. The organization has provided funds for over 300 initiatives in over 50 countries.

Web3 and Individual:

Web3 promotes individual user engagement from a philosophical standpoint. As a result, most Web3 initiatives emphasize their inaugural white paper to explain how many of their tokens (and the possible revenue and power that comes with token possession) are accessible for purchase by the general public.

In addition, companies sometimes “airdrop” free tokens to specific communities to entice interest. Acquiring (purchasing, earning, or receiving) Web3 project tokens is the most common approach to investing in Web3 technology and draws individuals in.

Web and Metaverse:

Web3 and Metaverses, in reality, are the perfect match since Metaverse users engage essentially with other users, and Metaverse community members are frequently encouraged to assist with environmental governance and development.

Web3 technologies have the potential to create a set of safeguards for a buoyant economy in which people may securely share their biometric/confidential information and emerge in Metaverse content interactions.

Read More: Top 5 Metaverse Development Tools, Technologies, & Their Use Cases

What Else Does Web3 Promise?

Web3 can take on almost infinite variants as a technological stack rather than a precisely defined framework. Aside from banking and Metaverse dApps, additional Web3 options include social networks, gaming, instant posting, and other applications.

User involvement levels will determine the extent to which Web3 empowers users. The most productive Web3 initiatives will be those in which users are keen to be a part of the community, willing to dedicate content, and eager to offer feedback.

Exploring Web3 Use Cases Powered by Advanced App Development

With Web3 exposing new frontiers for users to fairly engage, invest, and transact in decentralized environments. This is where Cubix empowers businesses to realize the full potential of this by developing world-class apps. Cubix assists from the concept to deployment in scalable and tailor-made solutions for Web3 platforms. Whether it is a secure iOS or Android app or a personalized project in crypto wallet development. 

Cubix takes care of all the traits: performance, usability, and security. Their areas of expertise include integration of blockchain, smart contract implementation, and tokenization platforms. Focusing on easily accessible user experiences and powerful backend systems, they empower startups and enterprises alike in launching successful Web3 products attuned to modern-day market demands as well as digitally transforming landscapes.