How to Invest in Web3 and Earn Passive Income
New technologies and movements bring opportunities for everyday people to get in on the ground floor. Currently, everyday people have a massive opportunity to earn passive income by investing in Web3. This article will round up the best ways to invest in Web3 and will list the largest benefits and drawbacks of each method.
Buying cryptocurrencies
Cryptocurrencies arrived alongside the advent of blockchain technology in 2009, serving as the fuse that would later ignite the current Web3 movement. While Web3 has since taken on a life of its own, many contemporary Web3 projects make use of either popular or dedicated cryptocurrencies as a way to support their ecosystem.
For everyday investors, this has made buying cryptocurrencies arguably the most popular way to invest in the Web3 space. While purchasing crypto was once a difficult and arduous task, both centralized and decentralized exchanges have made it incredibly easy to purchase crypto with fiat currencies.
The largest benefit of investing in Web3 in this way is that it has, in the recent past, resulted in massive financial gains for some investors. In addition, many projects use their token sales as a way to fund the growth and development of their Web3 platforms.
The downside, however, is that investing in cryptocurrencies can be extremely volatile. By now, there is probably little need to retread the gargantuan highs and solemn lows that the crypto market has experienced. This can present financial risk for investors and means that the amount of passive income that you can earn will likely be inconsistent.
Purchasing stocks
Like in other technology-centered industries, many Web3 companies are supported by the sale of stocks. Everyday people can invest in Web3 by buying shares in companies and projects that they want to support or expect to do well.
Today, it is not just small companies and startups that are making major moves in the Web3 space. We have seen massive companies become popular stock options in the space, including but not limited to IBM, Nvidia, Apple, and Unity Software.
In addition, many popular crypto and digital asset exchanges are publicly traded, allowing everyday people to invest in them as a way of earning passive income.
The benefit of investing in this way is that it allows you to support innovation in the Web3 space and become a stakeholder in projects that you are passionate about.
The downside to this method is that investing can be unpredictable. As with the volatility experienced in the crypto market, stocks are no stranger to price swings and crashes.
Develop your own Web3 project or digital commodity
While not a suitable pathway for everyone by any means, one way to invest in Web3 is by investing in yourself. As a landscape in its early stages, there is room for people to create their own exciting NFT and Web3 projects.
With the arrival of blockchain-focused programming languages and new digital tools aimed at project creators, it is easier than ever to launch your own Web3 project or commodity.
The benefit to developing your own project is that it allows you to become an active participant in one of the largest technological movements of our time. In addition, the fact that the industry is still in its early stages means that there is a significant opportunity for new players to enter the space and change its trajectory.
The downside, of course, is that developing a Web3 project or selling an NFT commodity requires a significant investment of time and resources. It will likely also require at least some foundational knowledge of relevant technologies. Further, many people are currently trying to sell their own digital works and launch their projects. This means that the landscape has become quite competitive and many projects may not end up turning a profit.
Stake exciting Web3 projects
The safest and most consistent way to earn passive income by investing in Web3 projects is through staking. Many Web3 projects allow you to lock away a portion of your holdings in exchange for financial rewards.
There are many significant benefits to staking, both for the project itself and for everyday investors.
Staking benefits projects as it allows them to have strong and secure networks, without the need for processes that consume massive amounts of energy or trade away their decentralization.
Staking benefits investors as it allows them to earn passive income while playing a pivotal role in exciting Web3 projects. When you stake a Web3 project, you are serving as a vital cog in the project’s core function and success. This makes it a great and financially viable way to directly support the projects you believe in.
You can also use staking calculators to estimate your staking rewards, which will allow you to see which projects will pay you the largest yield on your investment. In addition, check out AVADO’s article covering the best staking rewards in 2022 to find some great Web3 projects to stake.
The downside to staking is that it often requires either using a centralized exchange or having to deal with complex technology on your own. Using a centralized exchange can mean trading away your security and autonomy while limiting the amount of passive income you actually receive. Trying to stake on your own, on the other hand, can mean having to follow complex guides while trying to set up technology that may not actually be suited for the task at hand.
For these reasons, both staking through an exchange and trying to stake on your own are often not viable for many people. Fortunately, there is a solution that will allow you to enjoy all of the benefits of staking without any of the downsides.
Staking through your AVADO device
At AVADO, we offer a range of plug-and-play blockchain devices that allow you to start staking in just a few minutes. Unlike with a centralized exchange, your AVADO device will be entirely your own — allowing you to benefit from security and autonomy while getting to keep all of the passive income that you earn.
In addition, since these devices can be used right out of the box, there is no complex setup process. No prior knowledge of finance or Web3 technology is needed in order to get involved.
Using an AVADO device means getting to easily unlock the full range of benefits that come with investing in Web3. To find out more, visit our website today.
