Web3.0 and Shareholder Rewards: Can They Coexist in the New Age of Investing?

James LePage
November 23, 2022
James LePage
Co-Founder + Head of Technology at ShareClub

As the world evolves and technology advances, the way we invest and interact with the financial world is changing too. We're entering the era of Web3, a decentralized internet that promises to give users more control over their data and assets. Retail investors, who have traditionally focused on investing in public equities, are now also looking at opportunities in the burgeoning world of cryptocurrencies and blockchain technology. But what does this mean for the future of shareholder rewards? Can Web3 and shareholder rewards coexist in this new age of investing?

Understanding Web3, Retail Investing, and Shareholder Rewards

To better understand how these worlds can coexist, let's first define the basics of Web3, retail investing, and shareholder rewards.

Web3 is a decentralized version of the internet, built on blockchain technology, that aims to give users more control over their data and assets. Unlike Web2, which relies on centralized platforms and intermediaries, Web3 is powered by decentralized networks and peer-to-peer connections, removing the need for middlemen.

Retail investing refers to individual investors who buy and sell stocks, bonds, mutual funds, and other financial assets. These investors often seek out investments that align with their personal values and goals, making shareholder rewards an attractive incentive.

Shareholder rewards are benefits and perks that public companies offer to their shareholders. These rewards can include things like discounts, exclusive offers, or even dividends, all of which can enhance the overall investing experience and help build loyalty between companies and their investors.

The Hype Around Web3 and Its Impact on Investing

The world of cryptocurrencies and blockchain technology has attracted a lot of attention from investors, thanks to the potential for massive returns and the promise of a more decentralized financial system. With Web3, investors can participate in decentralized finance (DeFi) platforms, stake their tokens to earn rewards, and even invest in non-fungible tokens (NFTs).

Staking tokens, for instance, is somewhat similar to earning dividends from traditional investments. By locking up tokens in a blockchain network, investors can earn rewards in the form of more tokens, essentially creating a passive income stream. In the traditional financial sector, investors "lock up" their capital in certain equities, and they can earn a cash reward (dividend) as a small share of the company's profits every year, creating a passive income stream similar to staking in Web3.

The Coexistence of Web3 and Traditional Investing

Despite the hype around Web3 and the shift towards decentralized finance, traditional investing is not going anywhere. Crypto-assets currently represent a relatively small percentage of the average investor's portfolio (about 4% according to a study done by Yale University Professors (Yukun Liu & Aleh Tsyvinski), while equities listed on public exchanges make up a more significant portion (sometimes as high as 60%-80%). Shareholder rewards remain an essential aspect of the investing landscape, and there's no reason why they can't continue to thrive alongside Web3 investments.

In fact, some companies are starting to blend the worlds of traditional investing and Web3. For example, certain blockchain projects offer tokenized stocks, which allow investors to gain exposure to traditional equities through crypto-assets. Additionally, shareholder rewards could potentially be distributed through blockchain technology, creating new opportunities for innovation and engagement.

The Future of Investing with Web3 and Shareholder Rewards

As the financial landscape continues to evolve, retail investors have the opportunity to explore new and exciting investment opportunities in both the Web3 and traditional investing spaces. The key is finding a balance that aligns with individual goals, values, and risk tolerance.

By staying informed and open to new possibilities, investors can take advantage of the best of both worlds – enjoying the perks and rewards of traditional investments while exploring the exciting opportunities that Web3 has to offer.

The Bottom Line

The worlds of Web3 and shareholder rewards are not mutually exclusive. Instead, they can coexist and even complement each other in the new age of investing. By embracing the potential of both traditional investing and Web3, retail investors can create a well-rounded and diverse investment portfolio that caters to their unique preferences and financial goals. As technology continues to revolutionize the way we interact with the financial world, there's never been a better time to be a part of this exciting journey. So why not explore the possibilities and make investing a lifestyle, not just a hobby? Get more bank for your buck with shareholder rewards and tap into the massive perks that the modern investing world has to offer. Remember, together, we can change the market – one investment at a time.

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