Why Invest in Web3 and How to Do It?

Hamza Ali

29 Aug, 2022


5 min read

Invest in Web3

Investors and organizations are highly aware of how important it is to adapt new and innovative technology in the competitive market of today’s digitally agile environment. Just like other businesses and industries, the internet is constantly evolving too.

Users of the first iteration of the web (Web1) could mostly just read the material; the second iteration (Web2) has given us additional opportunities to participate in reading and writing. But with Web3, users may browse, publish, generate, and own the material they contribute.

What is so fascinating about Web3? Some claim that Web3 will revolutionize web technology entirely. Although Web3 is still in its developing stages, it is rapidly expanding. You can invest in this innovative and growing technology in multiple ways. We will look at some of the best possible and profitable ways to invest in Web3 in this blog.

What is Web3, and how did it start?

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.

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 predominately 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 in Web3?

Here are several ways in which you can invest if you are interested in owning a piece of Web3 and expectantly making money from it:

Investing in Crypto:

When considering Web3 investments, cryptocurrency is likely to be the first thing that comes to mind. This is because buying and selling virtual currency is the most apparent investing strategy in Web3.

You might invest in cryptocurrency through crypto mining if you have technical expertise. Cryptostaking is another approach to profit from crypto coins. It allows you to make money just by retaining your crypto.

Investing in Web3 stocks and companies:

Due to the increased exposure and involvement in Web3, several technological firms are progressively prepping and orienting themselves for this new phase of web technology, which may influence the overall economic outlook.

Some firms, like Microsoft, are already publicly trading, and you can benefit by purchasing the company’s shares. In addition to purchasing equities in Web3 firms, you may invest in startups developing Web3-related services.

Investing in NFTs and Metaverse:

Investing in NFTs and Metaverse exposes investors to Web3, which will facilitate NFTs and Metaverse development services. Another strategy is to invest in metaverse real estate by utilizing NFTs to buy “property” there; nevertheless, this is risky.

NFTs will have enormous potential value in Web3 because of their uniqueness. It can be used as a medium of exchange for purchasing, leasing, and swapping in the Metaverse. NFTs may also be used for visual painting, gameplay, an electronic wallet, and other purposes, as NFTs provide limitless opportunities.

Investing in Blockchain technologies like Ethereum and Polkadot:

Another way to invest is to gamble on projects or Blockchain that will provide a stable foundation for upcoming Web3 dApps. Of course, Ethereum would be the primary one, but because of its exorbitant prices, other options like Polkadot are much more feasible.

Read More: What are Web3 Contracts? Exploring Smart Contracts

Passive vs. Active investing in Web3:

Passive investing is purchasing a pre-assembled allotted portfolio, sometimes known as an index. Passive Web3 investors may purchase Metaverse ETFs or use a cryptocurrency-specific Robotic assistant. On the contrary, active investing entails selecting particular stocks and digital assets that you feel will beat the stock market in the long run. However, Web3-focused valuation indices are still minimal, but their significance is rising.

Blockchain, dApps, and Web3:

User engagement, Blockchain, and decentralized apps (dApps) are inextricably linked. Users must be able to respond directly to peers without a firm gathering and sometimes restrict data along the route. But how can an application function without the assistance of a corporation? dApps accomplish this by appearing as smart contracts on a public blockchain like Ethereum rather than on a commercial database.

A public blockchain system enables dApps to offer assistance to anybody without the involvement of any corporation. For example, Web3 illustrates how a DeFi app links users to one another compared to a typical financial app that links each consumer to a financial organization.

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.

Wrapping Up:

It is hard to predict how quickly Web3 will progress and what the investments made by Big Tech and venture investors will signify for the future World Wide Web. However, what is evident is that giant firms are taking this transformation seriously and that many influential (and affluent) voices believe in the utopian vision of an internet that moves the user from the digital “for lease” cubbies to the owner’s couch.

Connect with our veteran development team to expand your thriving Web3 concept.


Hamza Ali

Hamza is a trained, dedicated, and qualified professional with strong knowledge and expertise in writing blogs on cutting-edge technologies. He adds value to businesses through driving online traffic with engaging and persuasive words.

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