Web3 Crypto: Your Guide To Investing In The Metaverse

Investing in Web3 can be an overwhelming prospect, but it doesn't have to be. There are several ways to invest in Web3, including non-fungible tokens (NFTs), cryptocurrencies, and direct investment in the metaverse. NFTs are unique digital assets that have been taking the art world by storm, with notable artists' works fetching high prices. Cryptocurrency is another way to invest in Web3 and can be used to purchase NFTs, land, and other objects in the metaverse. Finally, investing directly in the metaverse itself can be done by buying land in this digital universe through platforms like The Sandbox. As with any investment, it is important to understand the risks involved and consult with a financial advisor before making any decisions.

Understand the basics of Web3

Web3 is the latest evolution of the web-based world, marking a transition from a centralized authority system to a decentralized system of online communication, trading, and governance. It is built on blockchain technology, which serves as a digital public ledger that allows information to be viewed and distributed but not edited. This level of verifiability and authentication makes blockchain a powerful tool for various industries.

Web3 also incorporates augmented reality (AR) and virtual reality (VR), merging the physical and digital landscapes and adding a new layer to how we connect over the internet. This is particularly relevant for the metaverse, which is an all-encompassing description of the worlds that Web3 will create. The metaverse will combine AR, VR, artificial intelligence, social media, and other technologies to create an alternate universe that will mirror our own in some ways.

Another key element of Web3 is its decentralized nature, enabled by Decentralized Autonomous Organizations (DAOs). DAOs are digitally native communities centered around a shared mission, usually starting with a small group of individuals with a common interest or goal. Anyone can create a DAO, and it only takes about five minutes. DAOs can have various missions, such as creating financial contracts through the blockchain or curating collections of digital items like non-fungible tokens (NFTs).

NFTs are unique digital assets that represent ownership of a particular digital file, such as artwork, GIFs, video games, collectibles, or even tweets. They are created, bought, and sold online, and their value is based on demand and what someone is willing to pay for them. NFTs will have great utility in Web3, especially in the metaverse, where they can be used as proof of ownership, bought, sold, traded, or even used as a form of currency.

In summary, Web3 offers a decentralized system of online communication and trading, leveraging blockchain technology, AR, VR, and DAOs. It creates new opportunities for consumers and investors, particularly in the metaverse and with the use of NFTs. Understanding these basics of Web3 is essential before considering investment opportunities in this space.

Research the metaverse and digital land plots

The metaverse is a virtual world that has gained popularity with the rise of Web3. In simple terms, it is a collection of pixels, but it is not just a digital image. It is a programmable location in the virtual world where users can engage in various activities such as social interaction, playing games, promoting NFTs, hosting meetings, and attending virtual concerts.

Digital Land Plots

Digital land plots in the metaverse are represented by non-fungible tokens (NFTs). These plots are available for purchase in virtual real estate developments and can also be bought on third-party platforms such as OpenSea. The ownership of these plots is recorded on a blockchain, providing a permanent and tradable record. The most popular blockchains for recording these transactions are Polygon, Solana, Avalanche, and Ethereum.

Benefits of Owning Metaverse Land

While the concept of owning digital land may seem silly to some, there are several advantages to it. Firstly, it offers complete ownership and control over the virtual real estate. Owners are free to customize their land, host virtual events, and even create unique experiences for promotion and entrepreneurship. Additionally, it provides an opportunity for monetization through renting out the plots or generating passive income.

Where to Buy Metaverse Land

There are several platforms that offer the purchase of metaverse land, with The Sandbox and Decentraland being the most well-known. The Sandbox is a community-driven game that allows players to unleash their creativity. It has its own marketplace, where plots can be purchased with SAND, their native cryptocurrency. Decentraland, on the other hand, is a browser-based 3D platform that uses MANA as its cryptocurrency. Other notable platforms include Axie Infinity, Somnium Space, Cryptovoxels, and SuperWorld.

Things to Consider Before Buying

When considering purchasing digital land in the metaverse, it is important to treat it as a real investment. Here are some key things to keep in mind:

• Research the legitimacy of the metaverse land project.
• Ensure your digital wallet is secure and never share your seed phrase with anyone.
• Understand the motivation behind your purchase and whether it aligns with your goals.
• Look for areas with room for expansion, such as locations near potential meeting places.
• Be aware of the risks and challenges associated with the metaverse, such as the potential for platforms to go offline or the volatility of cryptocurrency values.

Explore blockchain and cryptocurrency

Blockchain and cryptocurrency are integral parts of Web3. Blockchain is a digital public ledger that allows information to be viewed and distributed but not edited. This level of verifiability and authentication makes it a powerful tool for many industries. Cryptocurrency is created through a process called mining, which involves solving complex mathematical equations to validate and record transactions on a blockchain network.

When investing in blockchain, you can consider purchasing cryptocurrency directly or investing in an ETF like Grayscale. Cryptocurrency can be bought through crypto brokers, exchanges, or peer-to-peer marketplaces. Popular cryptocurrencies include Bitcoin, Ethereum, Litecoin, Ripple, and Cronos. It is important to choose a reputable platform and store your crypto securely in a wallet.

Blockchain technology also enables the creation of decentralised applications (dApps), which have no central governing body for their data. Examples of dApps include games like Illuvium and crypto exchanges like Uniswap.

Cryptocurrency can be used as a straight investment platform, but many consider it speculation rather than investment due to its volatile nature. With thousands of cryptos available, a market theory suggests that a few top coins will eventually prove their utility and rise to the top. If you can anticipate which cryptocurrencies these will be, they could be good investments.

It is worth noting that investing in blockchain and cryptocurrency can be risky, and it is important to do your research and only invest what you can afford to lose.

Look into AR and VR

When considering how to invest in Web3 crypto, it is important to look beyond blockchain technology and also consider AR and VR as key elements of Web 3.0. AR (augmented reality) and VR (virtual reality) are being explored by institutions and entities, particularly for the metaverse. They merge the physical and digital landscapes, adding a new layer to how we connect over the internet.

Investing in AR and VR in Web 3.0 can take several forms. One option is to invest in stocks like Meta Platforms (formerly Facebook), Snap, and Vizux, which offer exposure to the technology without the heightened risk associated with more direct investment in Web3 crypto.

Another option is to explore the growing number of AR and VR crypto tokens, which boast a market cap exceeding $4.22 billion as of February 2024. These tokens are spearheading innovation in decentralized, Web3, and AI technologies. Some examples of AR and VR crypto projects to consider include:

• Decentraland (MANA): A browser-based 3D virtual world powered by the Ethereum blockchain, where users can explore, interact, and even own parcels of land as NFTs. The AR/VR element comes from the immersive first-person experience, where users can navigate and customize their avatars, attend events, and interact with others.
• CEEK VR: A metaverse platform with VR and AR capabilities, allowing users to attend concerts, watch 360° content, and interact with each other. The native token, CEEK, fuels the platform's ecosystem and is used for purchasing event tickets, virtual goods, and in-world experiences.
• Highstreet (HIGH): A play-to-earn metaverse that blends retail experiences with MMORPG gameplay. Users can explore a virtual world, complete quests, and even own virtual storefronts as NFTs. The AR/VR element is accessible through VR headsets and traditional screens.
• Victoria VR (VR): An ambitious project aiming to create a vast, user-owned, and photorealistic VR metaverse built on the Unreal Engine. The VR element offers immersive exploration, social interaction, and diverse activities within the virtual world. The native token, VR, fuels the ecosystem and is used to purchase virtual land and participate in governance.
• NetVRk (NETVR): A social virtual world built on the blockchain, allowing users to create, explore, and monetize their experiences. The AR/VR element comes through social interaction and exploration in a first-person, 3D environment, with future VR integration planned. The native token, NETVR, fuels various activities within the platform, including the purchase of virtual land parcels and in-world items.
• OVER (OVR): A pioneering AR metaverse project built on the Ethereum and Polygon networks, allowing users to map the real world with their smartphones and overlay interactive digital content on specific locations. The native token, OVR, fuels various aspects of the ecosystem, including the purchase of OVRLands (300sqm hexagons representing real-world locations as NFTs).

When investing in AR and VR blockchain projects, it is important to consider the inherent risks, including high volatility, technological immaturity, competition, regulatory uncertainty, project-specific risks, liquidity concerns, and the potential for rug pulls and scams.

Learn about DAOs

Decentralized Autonomous Organizations, or DAOs, are blockchain-based communities that aim to bring a more democratic and open management structure to businesses and other collaborative projects in Web3. DAOs are designed to operate without centralized leadership, with decision-making powers vested in the community of members. This is typically facilitated by smart contracts, which govern the decision-making processes and parameters.

When a DAO is formed, a governance token is often minted. This token represents a member's voting power within the DAO and can be bought and sold on secondary markets. The more tokens a member holds, the more votes they are entitled to. DAO tokens can also have value, as they may entitle holders to a share in the DAO's profits or rewards.

DAOs strive to be virtual, transparent, democratic, and autonomous. All discussions and decisions are made publicly, and the flat organizational structure means that all members have ownership and a say in decision-making. This democratic foundation allows anyone with an internet connection to participate in a DAO, regardless of their background.

Some examples of notable DAOs include Uniswap, Lido DAO, and the Ape Foundation. Uniswap is the world's biggest decentralized exchange (DEX), while Lido DAO governs Lido Finance, a DeFi protocol offering liquid staking for Ethereum and other tokens. The Ape Foundation, meanwhile, governs ApeCoin, a DeFi protocol for community-led projects in art, gaming, and entertainment.

To learn more about DAOs, you can explore educational resources on platforms like YouTube, which offer valuable insights into the functioning, possibilities, and risks associated with these decentralized organizations.

Frequently asked questions