The Maturation Of An Industry
I recently addressed the idea of entrepreneurship and business ownership being reshaped by WEB3 and tokenization. WEB3 enhances and simplifies existing models. Furthermore, much of what occurs in DeFi and other WEB3-related models is passive. I have always regarded passive income as the apex of income generation. The developments within WEB3 and DeFi technology have further supported this viewpoint.
Once you have a foundational understanding of what has been built and what is available within this new realm, it’s difficult to ignore it. Having spent a decade in Crypto, I have been fortunate to witness and experience much of the industry’s maturation. One thing that has become abundantly clear in recent times is the decisive shift towards passive income models and various forms of yield generation.
There are also many semi-passive models. However, these are usually aligned with activities already being conducted by Crypto enthusiasts. Airdrops are an excellent example of this, with many turning to Airdrop farming as an independent income model. Sure, in many cases, this can be a very speculative endeavor. However, significant diversification and exposure can create a wide net and guarantee a substantial return.
In Search Of Simplicity
I have recently focused on simplicity, reducing friction and expenditures regarding human and financial resources. Very few assets can simultaneously act as an investment and a business, depending on the asset. DeFi has revolutionized this dynamic by empowering assets to operate as businesses. Consider for a moment all the time, effort, and resources required to run a small—to medium-sized business. It’s extensive by any standard.
You can purchase a business, but it must be run and effectively managed to be profitable. On the other hand, I can buy an asset and then put the asset to work as a business void of staff, rental space, and overheads. This dynamic is powerful; if applied correctly, it is profitable. It all boils down to simplicity. It’s a simplified process with a similar outcome. I don’t know the present ratios. However, a business investor would expect to regain his initial investment within the first two years of business.
In many instances, DeFi can match and even outperform this. It’s not merely a case of high yields being generated but also asset appreciation. Purchasing assets appropriately can secure an ROI within weeks or months. Applying the DeFi business model timeously is relatively safe regarding market-related risks outside hacks or exploits.
Rinse & Repeat
Another great opportunity within the DeFi realm is reproducing your results via the flywheel effect and, in other words, using a portion of the yields as investment capital for an entirely new DeFi investment/business. This is impossible with traditional business models, as a new business will require additional staffing and numerous other overheads. The beauty of a DeFi model is that it is achievable regardless of the amount of capital being deployed.
In other words, it can be done on a large scale and a micro-scale. The benefits of this are many. One in particular is that a small venture can be compounded into a significant business over time. This is made possible by asset appreciation and compounding returns. DeFi models have a very low barrier to entry, whereas traditional models require significant investment. This enables more participants and, ultimately, a flourishing economy.
Simplicity Brings Focus
Regular readers of my official blog will know that I was an early participant regarding DeFi protocols. I loved the concept and am still an avid supporter of DeFi and yield generation within WEB3. As mentioned, I am looking at ways of simplifying my on-chain life, and yield generation is an exciting avenue with much to offer. Part of my pursuit of simplicity will include a stronger focus on my domain and DeFi creativity.
Passive Income will remain my primary focus. I have always maintained that your work should also work for you in return. Even if it is active income, an element of it should always work for you in the future. Incorporating passive income models into active income models is an essential way of maximizing your efforts and ensuring that your work continues to work for you well into the future.
Investors can always build yield-bearing altcoin positions for the long term. However, they should only account for a portion of one’s portfolio. It is advisable to sell a market top and identify lucrative stablecoin opportunities until the tide returns. That being said, much of 2025 should provide favorable conditions for DeFi exposure and yield generation. However, nothing is ever guaranteed. One must remain vigilant and current with global developments, especially in Crypto.
Final Thoughts
Simplicity brings focus, but focus brings simplicity. Whichever way you look at it, the two walk hand in hand. If you want simplicity, you must identify a few key areas to focus on. This may require removing certain daily practices to focus more intentionally on key ideas. Sometimes, we spread ourselves thin. What’s worse, sometimes others spread us a little thin. One must take stock from time to time. This will usually result in adjustments being made.
DeFi simplifies the business model in that an asset is now an investment and a business simultaneously. This simplifies things considerably. However, it is not void of risk, but so is every other business idea. The risk/reward ratio is acceptable and even favorable. This is something each individual must assess for themselves. Remember, research is king, and becoming familiar with a particular asset class has benefits. All the best, see you next time!
Sapphire Crypto 