Web3 Investing:The Hunter
The Hunter is a savvy investor who is constantly on the lookout for the next big thing in Web3, and is not afraid to take bold steps to achieve their investment goals.The Hunter is often characterised by their willingness to take risks, their ability to quickly identify promising projects, and their knowledge of the Web3 ecosystem.
This investor is comfortable investing in niche areas of the crypto world such as Decentralised Autonomous Organisations (DAOs), gaming, algo trading, meme coins, and digital collectibles, in the pursuit of explosive investment returns. Here are some details about crypto niches:
DAOs (Decentralised Autonomous Organisations) are organisations that use blockchains, digital assets, and other related technologies to allocate resources, coordinate activities, and make decisions. Community-oriented, DAOs attempt to provide an alternative to traditional organisations by making operational information publicly available and enabling members to participate in the governance of the organisation. They are governed by smart contracts and have no central leadership.
With a DAO, a number of people come together to form a group and then pool their capital, typically using an Ethereum wallet. From there, the group can use its capital to make investments, manage projects, buy non-fungible tokens (NFTs), support charities, and more. While the specifics of each DAO will depend on the group and its goals, most DAOs fall into one of two general categories — those that manage blockchain-based projects and those that make investments.
One example of a DAO is Maker. It is a lending platform that is managed by proposals and votes. Recently, its community rebuffed Cogent Bank’s proposal to borrow $100 million from the DAO.
You can find more information on DAOs in the World Economic Forum’s DAO Toolkit.
Web3 gaming is decentralised gaming where the ownership of gaming assets and decision-making in all aspects of the gaming platform are delegated away from any central authority.
With traditional gaming, game operators own the copyrights to the in-game content. And players do not own the in-game digital assets. In contrast, with Web3 gaming, the power is in the hands of the players instead of with one central authority.
Another advantage of Web3 gaming is interoperability. This refers to the ability of users to move assets through blockchains and games.
Using DAOs with decentralised gaming ecosystems, blockchain-based game asset ownership, crypto-secured gaming wallets, cryptoassets, NFTs, and the metaverse, this form of gaming eliminates central game administrators and owners of gaming platforms and democratises gaming for all.
Algo trading involves using computer algorithms to buy and sell cryptoassets at certain times. With this form of trading, a computer program follows a defined set of instructions to place a trade. Once the current market conditions match the predetermined criteria, the trade is executed.
Algo trading is already big in the equities industry with hedge funds all over the world employing the strategy to generate regular profits. Now, however, it is becoming popular in the crypto space.
A digital collectible (also known as a non-fungible token or “NFT”) is a unique or limited edition copy of a virtual item. Typically, there is a visual element to these cryptoassets such as digital art, a video clip, or a digital trading card. Blockchain technology is used for the distribution and transfer of ownership of the assets.
The digital collectibles market is growing at a rapid pace and it’s easy to see why. Content creators can use these digital assets to create new revenue streams by creating limited editions of their work (art, music, videos, etc.) and selling them to fans, or by creating unique experiences for collectors. In addition, digital collectibles can be used to financialise illiquid assets such as real estate, wine, and even diamonds by tokenising them and making them tradeable on blockchain marketplaces. This allows for the creation of a liquid market for assets that would otherwise be difficult to sell or trade.
Meanwhile, brands are using digital collectibles to create limited edition merchandise and to offer customers the ability to own a piece of their brand's history. For example, in 2020, the NBA launched “Top Shot” in collaboration with Dapper Labs, the company behind the game CryptoKitties. This allows customers to purchase NFTs of NBA video highlights. Other brands that have released digital collectibles include Coca-Cola, Nike, Starbucks, and Gucci.
Meme coins are cryptoassets that originated from Internet memes or jokes. Crypto investors often buy them to be part of a community or for entertainment value/speculative purposes.
Two of the best-known meme coins are Dogecoin and Shiba Inu. Dogecoin was created by two software engineers in 2013 to poke fun at Bitcoin.
While both cryptoassets were originally created as jokes, they have gained in popularity and now have real-world uses. For example, cinema operator AMC currently accepts payment in both meme coins. Meanwhile, Tesla accepts payment for some merchandise in Dogecoin.
It is worth noting that many meme coins lack fundamental value or use cases. So, they are very speculative in nature. Ultimately, their value depends largely on how much momentum their concepts can generate.
The Hunter has plenty of options when it comes to investing in Web3. Assets to consider include:
DAOs such as Maker and SushiSwap
Gaming and NFT-related tokens such as Gala or ApeCoin
Digital collectibles through the Delta app
eToro Smart Portfolios such as DAO-Portfolio, which provides access to a range of DAO-related cryptoassets, or Napoleon-X, which uses quant trading strategies to trade cryptoassets
Meme coins such as Dogecoin and Shiba Inu
