Web3 Coins Decoded:  A Comprehensive Guide

WEB3
Web3 Coins are a trend, and crypto enthusiasts are going ga-ga over it. Let’s delve into the top coins in the market.

Imagine a world where the internet isn’t just a place to scroll cat videos and buy shoes. It’s a new ecosystem where you control your data, own your digital assets, and even build your apps. That’s the promise of Web3, the next stage of the internet, and it’s powered by something unique: Web3 Coins.

However, with so many Web3 tokens, figuring out where to start can take time. Fear not, crypto-curious friends! This blog is your one-stop shop for navigating the exciting world of Web3 coins. We’ll break down the jargon, explain how these coins work, and highlight the hottest projects driving this revolution.

What Is Web3?

Web3, often referred to as the third generation of the internet, represents a paradigm shift in how the online world operates. Its primary goal is to diminish the influence of major corporations and foster a decentralised environment that is not only owned but also constructed and managed by its user community.

In sharp contrast to conventional online entities that exploit user data, Web3 strives to empower individuals by returning control of their data to them. This shift holds the potential for revolutionary changes. For instance, musicians can now showcase their creations on decentralised platforms or personal devices, eliminating the reliance on centralised entities like Spotify or YouTube for exposure and profit.

Moreover, It is designed to break free from the constraints of watchdogs or regulatory agencies. It does so by allowing users unrestricted access to services without external interference. Transactions within the Web3 framework occur directly between involved parties, eliminating the need for intermediaries. This enhances privacy and ensures greater autonomy and control over personal data.

What Are Web3 Coins?

Web3 coins are digital assets built on decentralised blockchain networks like Polkadot, Solana, or Chainlink. Unlike traditional tokens, Web3 tokens operate within a decentralised ecosystem, enabling peer-to-peer transactions without intermediaries. 

These programmable assets represent ownership, access, or participation in decentralised applications (DApps) and smart contracts. Web3 tokens utilise blockchain’s transparency and security, empowering users with complete control and ownership of their assets. 

They play a crucial role in developing decentralised finance (DeFi), non-fungible tokens (NFTs), and the broader Web3 movement, fostering a new era of trustless and permissionless digital interactions.

Top Web3 Coins To Invest

After careful consideration and research, we have listed down the top Web3 coins for you to invest in: 

1. Polkadot (DOT)

First on our list of top Web3 Coins is Polkadot. It is a blockchain platform that addresses one of the most critical challenges in the crypto Web3 space: interoperability. In simpler terms, it seeks to bridge the gap between different blockchains, enabling them to communicate and seamlessly transfer data and assets. 

Imagine a world where your Bitcoin can freely flow to your Ethereum wallet, or your DeFi app on one blockchain can interact with a lending protocol on another. That’s the vision Polkadot brings to life.

Features Of Polkadot

  • Polkadot employs a sharded architecture with parachains, enhancing scalability and transaction speed.
  • The Relay Chain connects and secures parachains, facilitating seamless communication and asset transfer across diverse blockchain ecosystems.
  • Developers can create specialised blockchains on Polkadot, catering to various needs such as DeFi, NFTs, supply chain management, and gaming.
  • Polkadot features a robust on-chain governance system involving DOT token holders for community-driven decision-making and decentralisation.

You can check our How to Buy Polkadot guide if you want to invest in Polkadot. But before that, thoroughly read the Polkadot price prediction for the coming years.

2. Chainlink (LINK)

Chainlink stands out as a prominent oracle network within the Web3 Token blockchain. Oracles play a crucial role by enabling blockchains to tap into off-chain data and facilitating the creation of programmable smart contracts. In essence, Chainlink’s decentralised network ensures enduring data reliability, contributing significantly to various companies operating in the decentralised finance (DeFi) sector.

Key players in the DeFi space, such as AAVE, Uniswap, and Compound, leverage Chainlink’s oracles to access precise off-chain data feeds. This integration enhances the accuracy and efficiency of their operations. Beyond DeFi, Chainlink has collaborated with the World Economic Forum (WEF) to support the fourth industrial revolution (4IR). This partnership underscores Chainlink’s broader influence in shaping the future of decentralised technologies on a global scale.

Features of Chainlink:

  • Tamper-proof network with high reliability
  • Seamless API integration with 99% uptime assurance
  • Proven, ready-made solutions for efficiency
  • Secure off-chain computation for enhanced security

Explore our How to Buy Chainlink guide if you’re interested in investing in Link. Before making any decisions, carefully review the Chainlink price prediction for the future.

3. Filecoin (FIL)

Filecoin is an open-source, peer-to-peer storage network powered by blockchain technology. It leverages unused storage space globally, creating a vast, distributed data storage and retrieval marketplace. 

Moreover, users can store their data on the network, paying “storage miners” with the native FIL token for their services. Miners, in turn, compete to offer the most reliable and cost-effective storage options, ensuring a dynamic and efficient market.

Features of Filecoin

  • No single entity controls the network, eliminating censorship and data manipulation risks.
  • Data is stored in encrypted chunks across multiple miners, guaranteeing redundancy and resilience.
  • Competitive bidding between miners drives down storage costs, making it significantly cheaper than traditional options.
  • All transactions are recorded on the blockchain, ensuring accountability and trust.

Take a moment to check out our How to Buy Filecoin guide if you’re thinking about investing in it. However, reading through the Filecoin price prediction for the coming years is essential.

4. Ethereum Name Service (ENS)

Ethereum Name Service (ENS) operates as an open and decentralised naming system on the Ethereum blockchain, translating human-readable Ethereum addresses (e.g., john.eth) into machine-readable codes. 

It simplifies interaction with the Ethereum web by mirroring the user-friendly approach of the Internet’s Domain Name Service (DNS). Unlike DNS, ENS employs a hierarchical domain structure, where domain owners have complete control over their subdomains. This facilitates seamless navigation and comprehension of the Ethereum-based web, enhancing user accessibility. 

Additionally, ENS supports reverse conversion, associating metadata and machine-readable addresses with human-readable Ethereum addresses, further streamlining user interactions.

Features of Ethereum Name Service

  • ENS enables ownership of user data, such as usernames and avatars, across various services.
  • It facilitates the creation of censorship-resistant decentralised websites.
  • ENS can be utilised with custom DNS names, including popular extensions like .com, .org, .io, etc.
  • The extensive ecosystem backing ENS includes wallets, browsers, and Dapps support.

5. The Graph (GRT)

Next on our list of Web3 Coins is The Graph. It is an essential indexing protocol, facilitating data queries for Ethereum and IPFS networks, pivotal in numerous DeFi and Web3 applications. It allows individuals to create and release open APIs, known as subgraphs, enabling applications to utilise GraphQL for blockchain data retrieval. 

A user-friendly hosted service is available for developers, streamlining the initiation of projects on The Graph. Later this year, a decentralised network is anticipated to be unveiled. The Graph accommodates data indexing from Ethereum, IPFS, and POA, with plans for additional network integrations shortly.

Features of The Graph Protocol

  • Subgraphs, bite-sized APIs built by anyone, organise and serve blockchain data to applications.
  • Query data using the intuitive GraphQL language is familiar to many developers.
  • No central point of failure! Applications rely on a network of independent indexers, curators, and delegators.
  • GRT, the native token, fuels the network and incentivises participants.

Interested in investing in The Graph Protocol? Check out our How to Buy The Graph guide, but ensure you thoroughly read the The Graph price prediction for the coming years first.

6. Flux (FLUX)

Flux serves as the driving force behind the entire Flux ecosystem in cryptocurrencies. This versatile digital currency holds various functionalities, such as acquiring resources, supporting nodes by providing collateral, and facilitating transactions on FluxOS. 

Additionally, it is pivotal in rewarding miners and FluxNode operators who contribute their computational resources. The primary goal of the Flux ecosystem is to empower individuals to create, deploy, and utilise the decentralised Internet of the future, often referred to as Web3.

Features of Flux

  • Flux network is decentralised and resistant to system failure/censorship.
  • FluxOS has Blockchain and DApp agnostic.
  • FluxNodes are operating globally in numerous countries.
  • Node operators are rewarded daily for running nodes.
  • Choose from bare metal, cloud-based, ARM64, and VPS servers.
  • FluxConnect works seamlessly with IoT devices using 2G, 3G, 4G, Wi-Fi, and 5G.

7. Ocean Protocol

Ocean Protocol employs blockchain, decentralised networks, and cryptography for secure, private data sharing. The objective is to empower data owners, ensuring control and privacy and fostering data commercialisation through marketplaces. 

At the crossroads of blockchain, data, and AI, Ocean Protocol was founded to drive the evolution of the Data Economy. It has pioneered technologies such as NFTs, token engineering, and data tokens to advance the field.

Features of Ocean Protocol

  • Enable private data transactions with user privacy preservation.
  • Retain complete data control as it stays on the owners’ premises.
  • Tokenise data into NFTs or crypto tokens for trading on decentralised exchanges (DEXs).
  • Ocean focuses on ensuring data availability, accuracy, and reliability.

8. Aragon

Aragon specialises in crafting secure tools for launching and overseeing Decentralized Autonomous Organizations (DAOs). Recently, they introduced the versatile Aragon OSx protocol and a user-friendly Aragon App on Ethereum and Polygon. 

Moreover, their mission is to facilitate governance experimentation at the pace of software development, constructing a robust governance hyperstructure. The Aragon Project is governed by Aragon Network Token (ANT) Holders within the Aragon DAO, with development carried out by globally distributed teams.

Features of Aragon

  • Empowers communities to raise funds, compensate contributors, and govern collaboratively
  • Facilitates gasless and universally verifiable voting solutions for web3
  • Provides secure, end-to-end, verifiable, censorship-resistant voting solutions for organisations
  • Enables the development of next-generation DAO platforms that are simple, modular, and adaptable.

9. Helium

Helium (HNT) is a decentralised blockchain network for IoT devices, and it was launched in July 2019. The mainnet enables low-powered wireless devices to communicate through a network of nodes called Hotspots. 

These Hotspots, acting as wireless gateways and blockchain mining devices, allow users to mine and earn Helium’s native cryptocurrency, HNT. 

Helium aims to enhance IoT communication, addressing infrastructure shortcomings since its inception in 2013. Users operating nodes contribute to the network and are rewarded with HNT, positioning Helium as a pioneer in decentralised IoT connectivity.

Features of Helium

  • Helium aims to enhance communication for IoT devices, known as “The People’s Network.”
  • Attractive to IoT enthusiasts, Helium offers financial incentives through its native token, HNT.
  • Helium’s network operates on proof-of-coverage, a consensus algorithm based on the HoneyBadger BFT protocol.
  • Hotspots use proof-of-coverage to achieve consensus in variable connection quality scenarios.

Before investing in Helium, look at our How to Buy Helium guide. Additionally, read the Helium price prediction for the upcoming years for a comprehensive understanding.

10. Kadena (KDA)

Kadena is the last but not the most minor coin on our list of top Web3 Coins. A proof-of-work blockchain merges Bitcoin’s PoW consensus with directed acyclic graph (DAG) principles, creating a scalable Bitcoin variant. It assures Bitcoin’s security but boasts unmatched throughput, catering to enterprises and entrepreneurs. The decentralised infrastructure, designed for mass adoption, employs a multi-chain approach, making Kadena distinctive in the blockchain space.

Features of Kadena

  • Kadena uses a directed acyclic graph (DAG) structure and scales theoretically to unlimited proof-of-work blockchains.
  • The fixed and multi-channel DAG structure improves real-world performance and scalability by limiting communication to three peer chains for transaction confirmation.
  • Kadena’s scalability is contingent on user needs, with the main limitation being the necessity for a hard fork for scaling and adding additional blockchains.
  • The platform can theoretically scale to 50 or 100 blockchains, but achieving this requires continued adoption, which is optional.
  • Network congestion triggers increased fees and incentivises miners to cooperate in a DAO to reconfigure the network on a larger scale.

So, if you want to invest in Kadena (KDA), read our Kadena price prediction guide before investing.

Benefits Of Investing In Web3 Tokens

Investing in Web3 tokens is a strategic move in the evolving landscape of cryptocurrency. Hence, here is a list of benefits that you can enjoy after investing in Web3 Tokens:

1. Direct Transactions, No Intermediaries

The Web3 Cryptosystem operates on decentralisation principles. It facilitates direct transactions without the need for intermediaries like banks or financial institutions. Eliminating traditional intermediaries enhances security, transparency, and transaction efficiency.

2. Enhanced Security Through Decentralization

A Web3 Coin prioritises user security by leveraging the decentralised architecture of blockchain technology. This robust structure renders exploitation by hackers or malicious actors virtually impossible, providing security that surpasses traditional centralised systems.

3. Empowering Innovative Business Models

One remarkable aspect of crypto is its ability to foster new and innovative business models. Decentralised autonomous organisations (DAOs) present a novel approach for businesses to operate more transparently, accountablely, and fairly for all stakeholders.

4. Reshaping Digital Interactions

The transformative potential of crypto in reshaping digital interactions is inspiring. Blockchain technology, the backbone of crypto, introduces many benefits, resulting in a more decentralised, user-centric, and secure system than traditional alternatives.

Factors To Choose A Web3 Coin For Investment

Investing in Web3 tokens can be both exciting and risky. Careful research and analysis are crucial to enhance your chance of success. Here are some key factors to consider when choosing a Web3 coin for investment:

Market Capitalisation (Market Cap)

  • Large-cap tokens (> $1 billion market cap) represent established projects with lower volatility but potentially slower growth. They offer lower risk but might have already reached significant price appreciation.
  • Mid-cap tokens ($100 million – $1 billion market cap) balance risk and potential reward. They can provide exposure to promising projects with room for growth but also carry some volatility.
  • Small-cap tokens (< $100 million market cap) offer the highest potential for explosive growth but are also the most volatile and risky. Investing in small-cap tokens requires extensive due diligence and a high-risk tolerance.

Whitepaper

  • Thoroughly analyse the whitepaper: The whitepaper outlines the project’s vision, technical details, and underlying technology. Look for a clear and concise explanation of the problem the project addresses, its solution, and its competitive advantage. Beware of vague or overly technical language.
  • Pay attention to the team: Analyze the team’s experience, credentials, and track record. Are they experts in the relevant field? Do they have a history of successful projects?

Project History

  • Research the project’s history: Has it delivered on its roadmap promises? Is the community active and engaged? Are there any controversies or red flags surrounding it? 
  • Check independent reviews and research: Find unbiased project analyses from reputable sources. Consider the opinions of experts and community members.

Trading Volume

  • Higher trading volume generally indicates greater liquidity: A liquid token is more accessible to buy and sell without significantly impacting the price. However, high trading volume can also signal excessive speculation and potential volatility. 
  • Monitor trading volume trends: A sudden or sustained increase in trading volume could indicate positive news or speculation, while a declining volume might suggest waning interest or lack of liquidity.

Current and Total Supply

  • Current supply: This is the number of tokens currently in circulation. A lower current supply can contribute to higher individual token value, but it may also indicate a project in its early stages with limited adoption. 
  • Total supply: This is the maximum number of tokens ever created. A capped total supply can create scarcity and drive up token value, while an uncapped supply could lead to inflation and devaluation. 

Conclusion

Investing in any crypto, Web3 coins or otherwise, requires prudent research and understanding of the inherent risks. Refrain from unthinkingly chasing hyped trends or succumbing to FOMO. Instead, delve into the projects, scrutinise their roadmaps, and assess their real-world utility.

Ultimately, Web3 tokens aren’t just about chasing moonshots or outsmarting algorithms. It’s about reclaiming ownership, fostering community-driven initiatives, and revolutionising how we interact with the digital world. 

Moreover, one needs to remember that cryptocurrency is not taxable in many countries. Each crypto transaction attracts different tax rates, and calculating such taxes manually can be hectic. Hence, you can use KoinX. It is an automated platform that calculates your crypto taxes in minutes. So why wait? Join and sign up with KoinX today.

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