Web3 is reshaping how value moves across the internet and how people interact with digital platforms. Unlike traditional online models built around centralized platforms, Web3 distributes ownership and control across communities and decentralized applications. Investors seeking exposure to Web3 can select from multiple approaches, including startup equity and various decentralized yield strategies.
In this article, we’ll discuss the most profitable ways to invest in Web3. Grab a cup of coffee and let’s start!
Equity in Web3 Startups
One of the most direct ways to participate in Web3’s expansion is through startup equity. Many companies are building the infrastructure, applications, and services that will support decentralized economies for years to come. Buying equity in these businesses gives investors a share of long-term enterprise value rather than short-term token movements.
Startups in areas such as decentralized identity, blockchain data indexing, and Web3 gaming often raise capital through angel investors, venture capital, or equity crowdfunding platforms. Investors who select strong teams with clear revenue paths position themselves to benefit from growth as these companies scale. While liquidity can be limited since private equity is not readily tradable, the potential upside can be significant if a startup becomes a market leader.
This approach suits those who prefer to hold a stake in the underlying business rather than in its token ecosystem. It requires careful evaluation of the founding team, market potential, and product differentiation.
Buying a whole Web3 company or shares are the two most common ways to get equity. Platforms like Acquire.Fi makes it possible to do both as their Marketplace lists the many Web3 startups and projects for sale while their Secondaries marketplace allows investors to buy partial ownership of a startup or even established Web3 platforms.
Token Investments in Layer-1 and Layer-2 Protocols
Tokens from foundational blockchain networks remain a cornerstone of Web3 investing. Layer-1 blockchains such as Ethereum, Solana, or Avalanche secure and process transactions, while layer-2 solutions like Arbitrum and Optimism improve scalability. Owning their tokens provides direct exposure to network activity, since transactions and smart contracts require those tokens to function.
Many investors choose to hold these tokens long-term while staking them for additional rewards. Staking secures the network and offers yield that compounds over time. Unlike startup equity, tokens offer higher liquidity because they can be traded at any time. However, they also fluctuate heavily in price, which means timing and risk management matter.
For those who want to align with the growth of core infrastructure, token ownership acts as a direct link to Web3 adoption. As more applications rely on these blockchains, token demand can rise accordingly.
Indirect Exposure through Public Markets and Funds
Not every investor wants to manage wallets, secure private keys, or analyze tokenomics. Public markets offer indirect entry points into Web3 growth. Shares of companies like Coinbase or listed blockchain miners provide exposure to the industry without requiring direct participation in decentralized protocols.
Exchange-traded funds and thematic funds dedicated to blockchain technology also spread risk across multiple companies. This path combines traditional investment structures with Web3 potential, creating a bridge between legacy finance and emerging technology. Liquidity is higher compared to private equity or NFTs, and regulatory protections apply.
For those seeking diversification within a familiar framework, public market exposure strikes a balance between accessibility and upside potential.
Crypto Staking
Staking involves locking up tokens to secure a blockchain network and validate transactions. Proof-of-stake blockchains such as Ethereum, Solana, and Avalanche rely on participants who commit tokens to maintain consensus. In return, stakers receive rewards, usually paid in the same token they stake.
The yield from staking varies depending on the network, the number of participants, and overall transaction volume. Staking is one of the more stable ways to generate returns in DeFi, as the rewards are tied directly to network activity rather than speculative demand. However, staked tokens often remain locked for a set period, limiting liquidity. Some services offer liquid staking, which provides a tradable derivative of the staked asset, but this introduces additional layers of risk.
Staking appeals to long-term token holders who want to earn extra income while supporting the network’s security and reliability.
Crypto Lending
Lending platforms allow token holders to supply assets to a pool that other users can borrow from. Protocols like Aave and Compound match lenders and borrowers algorithmically, setting interest rates based on supply and demand. For example, lending stablecoins usually generates consistent returns, while lending more volatile tokens can bring higher rates but carries greater exposure to price swings.
The advantage of lending lies in a predictable yield. Investors know the approximate interest rate they will earn over time, and stablecoin lending in particular can serve as a conservative way to engage with DeFi. The risk comes from smart contract vulnerabilities or liquidity shortfalls in the lending pool. Some protocols mitigate this with over-collateralization, requiring borrowers to deposit more value than they borrow.
Lending works best for those who prefer steady income and lower volatility compared to other yield strategies, provided they choose well-audited platforms.
Liquidity Mining
Liquidity mining, also known as yield farming, involves providing pairs of tokens to decentralized exchanges such as Uniswap, SushiSwap, or Curve. These exchanges rely on liquidity pools instead of centralized order books. By contributing assets to a pool, liquidity providers earn a share of the trading fees generated whenever users swap tokens. Some protocols also add governance token incentives to encourage participation.
The returns from liquidity mining can be attractive, especially in pools with high trading volume. However, providers face the risk of impermanent loss, which occurs when the price of tokens in the pool shifts relative to each other. This can reduce the overall value of a liquidity provider’s position compared to simply holding the tokens. Mitigating impermanent loss requires careful pool selection and a willingness to monitor positions.
Liquidity mining suits investors who want exposure to dynamic markets and who are comfortable with balancing yield against potential asset price divergence.
Comparing the Web3 Investment Strategies
Each of these approaches appeals to different investor profiles. Startup equity emphasizes long-term value creation. Tokens from layer-1 and layer-2 protocols offer direct alignment with network usage. DeFi yields can be generated through staking, lending, or liquidity mining, each with distinct trade-offs. Public market vehicles provide a regulated and liquid alternative.
To bring the differences into sharper focus, the following matrix outlines how these options compare across risk, reward, and liquidity:
| Investment Method | Risk Level | Reward Potential | Liquidity | Notes |
| Equity in Web3 Startups | High | Very High | Low | There’s high upside if the startup succeeds, but exits take years, and many fail. Example: equity in a Web3 gaming studio or infrastructure provider. |
| Layer-1 & Layer-2 Tokens | Medium-High | High | High | Direct exposure to network growth, but tokens can be volatile. Example: ETH, SOL, ARB, OP. |
| Crypto Staking | Medium | Medium | Medium | Steady returns are tied to network activity, but liquidity is limited due to lock-ups. Example: staking ETH or SOL. |
| Crypto Lending | Medium | Medium | High | Predictable yield, especially with stablecoins, but smart contract risks remain. Example: Aave or Compound stablecoin lending. |
| Liquidity Mining | Medium-High | Medium-High | Medium | Attractive yields from trading fees, but impermanent loss can erode gains. Example: Uniswap or Curve pools. |
| Public Markets & Funds | Low | Medium | Very High | Most accessible and regulated option, offers diversification but lower upside. Example: Coinbase stock (COIN) or blockchain ETFs. |
An investor might combine these approaches to balance risk and opportunity. Equity stakes and tokens can serve as the foundation, while staking, lending, or liquidity mining bring yield opportunities. Public equities or funds then round out the portfolio with diversification and regulatory safeguards.
