The Web3 landscape continues to evolve rapidly, offering a variety of investment opportunities for those willing to make money in the decentralized future. But the investment landscape in Web3 is so different from what you might be used to in the world of traditional layer 1 crypto that it can be really confusing.
This transformation is underpinned by blockchain technology, decentralized protocols, and a new ethos of user empowerment and data ownership. It is fairly easy to get lost here, especially if you are a novice investor.
The year 2024 has witnessed significant maturation in the Web3 space, with increased institutional adoption, regulatory clarity, and technological advancements.
Basic things you need to know: the total value locked (TVL) in decentralized finance (DeFi) protocols has surged past previous records, while non-fungible tokens (NFTs) have found practical applications beyond digital art.
But that's just a beginning. The intersection of artificial intelligence and blockchain technology has opened up new frontiers, promising to revolutionize industries from finance to healthcare. And even if you are a small investor it gives you opportunities to make immense profits here.
You can do it in many ways, starting from straightforward direct cryptocurrency investments and moving to a rather geeky and tech-savvy methods. Which one to choose is up to you, but here we are with a detailed layout of the most promising options you have.
Buy Web3 Cryptocurrencies
Let's start with easiest and the most obvious way to begin making money on web3 in 2024, shall we?
You can directly invest in Web3 cryptocurrencies. Simply put, you can buy and hold these tokens until the proper moment comes to sell them.
It remains one of the easiest ways to gain exposure to the decentralized internet revolution. These digital assets serve as the native currencies of various blockchain networks and decentralized applications (dApps), playing crucial roles in governance, utility, and value transfer within their respective ecosystems.
For instance, Solana (SOL) has gained traction for its high throughput and low transaction costs, making it attractive for decentralized finance (DeFi) and NFT applications. Similarly, Polkadot (DOT) has carved out a niche with its interoperability focus, allowing different blockchains to communicate and share data seamlessly.
Another category to consider is a bit more tech-savvy and requires more specific knowledge of the nature of the blockchain.
We are talking about governance tokens of major DeFi protocols. These tokens, such as Uniswap's UNI or Aave's AAVE, not only provide voting rights in the protocol's decision-making process but also often accrue value based on the protocol's performance. For example, holders of UNI can vote on proposals that affect Uniswap's development and may receive a portion of the protocol's fees in the future.
Investing in Web3 cryptocurrencies requires a deep understanding of tokenomics – the economic models underpinning these digital assets. Factors to consider include token supply (fixed vs inflationary), distribution mechanisms, utility within the ecosystem, and vesting schedules for team and investor allocations. For instance, a deflationary token model, where tokens are regularly burned or removed from circulation, can potentially lead to price appreciation if demand remains constant or increases.
Yes, all this seems much more difficult than simply buying Bitcoin in an anticipation of its next bull run. But the margins here can be absolutely different, and to your profit of course.
Invest in Quality DePIN Projects
Decentralized Physical Infrastructure Networks, or DePIN, represent a fascinating convergence of blockchain technology and real-world infrastructure. And while you may at first think this is a bit of a science fiction, the technology is absolutely real. And it is here already.
Believe it or not, but these projects aim to create decentralized alternatives to traditional centralized services in areas such as telecommunications, energy, and data storage. In 2024, DePIN has emerged as one of the most promising sectors within the Web3 ecosystem. Widespread adoption is on the horizon already, and you don't have to wait for it.
Simply put, it will be way too late to invest when an average tiktoker will be there.
One of the pioneering projects in this space is Helium (HNT), which has built a decentralized wireless network for Internet of Things (IoT) devices. Participants can set up hotspots using low-cost hardware, earning HNT tokens for providing coverage. The network's success lies in its ability to incentivize the creation of a global, community-driven wireless infrastructure. As of 2024, Helium has expanded beyond IoT to include 5G coverage, significantly increasing its potential market.
Another notable DePIN project is Filecoin (FIL), which aims to create a decentralized storage network. Users can rent out their spare hard drive space, earning FIL tokens in return. This model not only provides a more resilient and censorship-resistant alternative to centralized cloud storage but also allows for a more efficient use of global storage resources. The project has gained traction with enterprises and developers looking for decentralized storage solutions.
In the energy sector, projects like Power Ledger (POWR) are revolutionizing how we think about electricity distribution. By creating a peer-to-peer energy trading platform, Power Ledger allows prosumers (those who both produce and consume energy) to sell their excess solar power directly to neighbors. This not only promotes the adoption of renewable energy but also creates a more efficient and resilient energy grid.
When evaluating DePIN projects for investment, it's crucial to consider the real-world adoption and utility of the network.
Look for projects that solve genuine problems and have a clear path to scaling.
The tokenomics of DePIN projects often involve complex incentive structures designed to encourage network growth and maintenance. For example, many projects use a dual-token model: a utility token for network operations and a governance token for protocol decision-making. Understanding these models is crucial for assessing the long-term value proposition of the investment.
Invest in AI Crypto Projects
There is no way you are not familiar with ChatGPT or Midjourney, unless you live in a distant undiscovered island in the Pacific Ocean.
But Artificial Intelligence hysteria goes far beyond asking chatbot to make your homework for you.
The convergence of AI and blockchain technology has given rise to a new category of crypto projects that leverage the strengths of both fields.
These AI crypto projects aim to create decentralized AI systems that are more transparent, accountable, and accessible than their centralized counterparts. As of 2024, this sector has seen explosive growth, driven by advancements in both AI and blockchain technologies.
One of the leading projects in this space is Ocean Protocol (OCEAN), which aims to create a decentralized data exchange to train AI models. By allowing data owners to monetize their data while maintaining control over its usage, Ocean Protocol addresses one of the key challenges in AI development – access to high-quality, diverse datasets. The OCEAN token is used for governance and as a means of exchange within the ecosystem.
Another notable project is SingularityNET (AGIX), which aims to create a decentralized marketplace for AI services. By allowing AI developers to sell their services directly to users, SingularityNET promotes innovation and competition in the AI space. The project has gained attention for its collaboration with Sophia, the humanoid robot developed by Hanson Robotics.
Fetch.ai (FET) is another promising project that combines AI, blockchain, and Internet of Things (IoT) technologies. Fetch.ai's network allows devices to autonomously trade resources and services, creating a decentralized digital economy.
When evaluating AI crypto projects, it's crucial to assess the team's expertise in both AI and blockchain technologies. Look for projects with strong academic backgrounds and industry experience in AI, as well as a track record in blockchain development.
For example, SingularityNET's founder, Ben Goertzel, is a well-known figure in the AI community, which lends credibility to the project.
The scalability and interoperability of these projects are also key considerations. AI models often require significant computational resources, so the underlying blockchain needs to be capable of handling high throughput. Projects that leverage Layer 2 solutions or have clear scaling roadmaps are often better positioned for long-term success.
Privacy and ethical considerations play a crucial role in AI crypto projects.
Look for projects that prioritize data privacy and have clear guidelines for ethical AI development. For instance, Ocean Protocol's use of compute-to-data technology allows AI models to be trained on sensitive data without exposing the raw data itself, addressing crucial privacy concerns.
The tokenomics of AI crypto projects often involve complex mechanisms to incentivize both AI development and network participation. For example, some projects use token staking to secure the network and govern AI model deployments. Understanding these mechanisms is crucial for assessing the long-term value proposition of the investment.
Lastly, consider the potential real-world applications and adoption of the project. AI crypto projects that solve tangible problems or improve existing processes in industries like healthcare, finance, or logistics are more likely to gain traction. For instance, Fetch.ai's applications in supply chain optimization have attracted attention from major logistics companies.
Invest in NFTs and Real-World Asset Tokens
It might seem that NFTs are dead in 2024, but that it not true.
Non-fungible tokens and real-world asset tokens represent a significant evolution in the concept of digital ownership and asset tokenization. By 2024, these technologies have moved beyond their initial hype cycle, finding practical applications across various industries and offering new investment opportunities in the Web3 ecosystem.
NFTs, which represent unique digital assets on a blockchain, have expanded far beyond digital art. In the gaming industry, NFTs are being used to represent in-game assets, allowing players to truly own and trade their virtual items across different games and platforms.
Projects like Axie Infinity have pioneered the "play-to-earn" model, where players can earn cryptocurrency by participating in the game ecosystem.
The music industry has also embraced NFTs, with artists using them to offer unique experiences and revenue streams. For example, some musicians are selling limited edition album releases as NFTs, which include exclusive content and even royalty rights. This model allows artists to connect directly with their fans and potentially earn more from their work than traditional streaming models allow.
In the realm of real estate, NFTs are being used to fractionalize property ownership, making high-value real estate investments more accessible to a broader range of investors. Platforms like RealT allow users to purchase tokens representing a share in a physical property, earning rental income proportional to their ownership stake.
Real-world asset tokens, or security tokens, represent a bridge between traditional finance and the crypto world. These tokens can represent ownership in assets such as stocks, bonds, commodities, or real estate. By tokenizing these assets, they become more liquid and can be traded 24/7 on global markets. For example, companies like Polymath are creating platforms for businesses to issue security tokens compliant with regulatory requirements.
When investing in NFTs, it's crucial to understand the underlying value proposition. For collectibles or art NFTs, factors like the artist's reputation, the scarcity of the piece, and the NFT's provenance play significant roles in determining value. For NFTs representing virtual land or in-game assets, consider the popularity and growth potential of the associated metaverse or game.
For real-world asset tokens, due diligence should include assessing the legal framework surrounding the tokenization process.
Ensure that the tokens comply with relevant securities laws and that there's a clear mechanism for redeeming the token for the underlying asset if necessary. Also, consider the liquidity of the token markets, as this can significantly impact your ability to exit the investment.
The technology underpinning NFTs and asset tokens is also an important consideration. Most NFTs currently exist on the Ethereum blockchain, but other chains like Solana and Flow are gaining traction due to their lower transaction costs and higher throughput. The choice of blockchain can impact factors like transaction speed, gas fees, and interoperability with other platforms.
Diversify into VR, AR, and Metaverse Ecosystems
Now this is the most sophisticated and tech-savvy way to invest in web3.
Virtual Reality (VR), Augmented Reality (AR), and the concept of the metaverse have emerged as key components of the Web3 ecosystem. They offer immersive digital experiences and new paradigms for social interaction, commerce, and entertainment.
By 2024, these technologies have matured significantly. No, Mark Zuckerberg failed us again, with no promises of his having come alive. What was the point then to rename Facebook into Meta?
Anyway, Metaverse, yet non-existing at the moment, presents diverse investment opportunities for those looking to capitalize on the future of digital interaction.
Just look at these most promising opportunities.
Decentraland (MANA) is one of the pioneering blockchain-based metaverse projects. Users can buy, develop, and monetize virtual land represented by LAND tokens. The platform has hosted virtual concerts, art galleries, and even casinos, demonstrating the diverse potential of metaverse economies.
How can you participate? The easiest way would be to purchase MANA tokens, which are used for transactions within Decentraland, or by directly investing in virtual real estate.
Another significant player is The Sandbox (SAND), which combines elements of decentralized finance (DeFi) with a voxel-based gaming metaverse. Users can create, share, and monetize their gaming experiences. The platform has attracted partnerships with major brands and celebrities, indicating growing mainstream interest in metaverse projects. Once again, you can buy SAND and hold it or use it to invest directly into the gaming.
In the AR space, projects like Augmented Reality Metaverse (ARM) are working to create decentralized AR experiences overlaid on the real world. These projects often involve tokenized real-world locations, similar to how Pokémon GO created virtual points of interest.
When evaluating metaverse and VR/AR projects for investment, consider the project's user base and growth metrics.
Active user numbers, time spent in the platform, and transaction volumes can provide insights into the health of the metaverse economy.
The technology stack is another crucial factor. Look for projects that prioritize interoperability, allowing assets and identities to move seamlessly between different metaverse platforms. Projects building on open standards or those actively working on cross-chain solutions may have a competitive advantage in the long run.
Content creation tools and ease of development are also important considerations, if you you want to invest here. Metaverses that provide robust, user-friendly tools for creating content and experiences are more likely to attract a vibrant community of developers and creators, which is crucial for the long-term success of any metaverse project.
The economic model of the metaverse is a key differentiator.
Some projects, like Decentraland, have a fixed supply of virtual land, creating scarcity that can drive value. Others may have more dynamic economic models. Understanding these tokenomics is crucial for assessing the investment potential.
Hardware adoption is a significant factor, particularly for VR-focused projects. As VR headsets become more affordable and user-friendly, projects that are well-positioned to capitalize on this growing user base may see accelerated growth. Keep an eye on partnerships between metaverse projects and hardware manufacturers.