If you are participating in or about to enter the Web3 world, you are likely to be dazzled by various 'Tokens': some can be traded, some can be voted on, some represent NFT collectibles, and some claim to offer 'annual returns of 15%'... So the question arises: what exactly are these virtual assets? Are they stocks, points, data, or currencies?

In this article, Portal Labs hopes to provide you with a practical classification logic for virtual assets, helping you clarify what functions the most common types of assets serve, what risks they carry, and what types of participation paths are suitable.

Five Key Attributes

When people talk about virtual assets, they often think of common cryptocurrencies like Bitcoin and Ethereum, or even some seemingly inexplicable but skyrocketing meme coins. However, if you observe closely, you will find that the Web3 era brings much more than that.

In the real world, you invest in stocks, bonds, real estate, artworks, or patents. Similarly, in the Web3 world, you can invest in similar, or even more diversified, virtual assets.

Here are several typical functional categories in the virtual asset world summarized by Portal Labs:

Trading Assets

Speaking of virtual assets, most people's first reaction is Bitcoin #BTC . Indeed, BTC is the best representative of trading assets; its value comes from people's recognition of 'digital gold' and strong market liquidity.

The core of trading assets lies in their sufficient liquidity; there are always buyers and sellers in the market. But the problem also lies here: while huge volatility can bring considerable profits, it also means you might fall into the trap of 'buy high and sell low', for example, #MEME tokens, which had massive liquidity at first but relied purely on FOMO, or the fear of missing out.

Thus, trading assets often experience significant volatility and are not suitable for everyone. The prerequisite for choosing to invest in these types of assets is that you must be able to withstand huge price fluctuations in the short term or hold them long-term while understanding that high returns always come with high risks. If you feel that you are not suitable for constantly monitoring the market or cannot bear the psychological pressure of significant asset volatility, you may need to approach this type of asset with caution.

Equity-Type Assets

If you are accustomed to voting and dividend models in shareholder meetings in the real world, then equity-type virtual assets will not be unfamiliar to you.

Take Uniswap #UNI and Curve #crv as examples; these assets are not just a string of code or a price symbol but are voting certificates for your project development roadmap. Owning these assets is akin to owning shares in an internet company, and your votes can potentially influence the future direction of the protocol.

At the same time, many NFT membership certificates or community identity assets (such as the well-known Bored Ape Yacht Club BAYC NFT) also belong to equity-type assets. Holding these NFTs means you have access to exclusive communities and even various commercial rights within the future ecosystem.

Therefore, this type of asset is suitable for investors who are optimistic about and willing to deeply participate in the development of a certain protocol or brand ecosystem over the long term. Your return may not necessarily come from short-term price changes, but more from the value accumulation of long-term development.

Functional Assets

The most representative asset of this type is Ethereum #ETH . Many people initially purchased ETH to pay for transaction fees (Gas), but as the Ethereum ecosystem continues to expand, ETH has long been more than just a medium of exchange; it has become an indispensable asset in the Web3 infrastructure.

In addition to tokens from public chains, similar functional assets include digital identity certificates (DID), such as ENS domain names or Lens personal Profile NFTs. These digital identity assets are not merely 'traded goods' but are core identity markers that constitute the Web3 ecosystem. Imagine this: in the future, everyone entering the digital world will need a unique digital ID. As the number of users increases, these IDs will reflect enormous investment value.

The characteristic of functional assets is that their value is highly dependent on the growth potential of the ecosystem and users. Investing in these assets means you recognize the long-term prospects of a certain ecosystem and are willing to hold for the long term, patiently waiting for the dividends after the ecosystem develops and expands.

Financing Assets

When many people hear 'financing assets', they may first think of the extremely high-risk coin assets obtained through IDOs. But in fact, financing assets also include another, more stable category of digitalized real-world assets (RWA).

On-chain U.S. Treasury bonds, gold, and even tokenized real estate assets are typical financing-type assets. They are essentially digital versions of traditional world bonds or equities, more transparent, more flexible, and often with clear cash flow and return structures.

Of course, risk and return go hand in hand. Early project tokens like IDOs can indeed skyrocket in the short term, but the risk of going to zero is very high. In contrast, on-chain real-world assets (RWA) are relatively more stable and are more suitable for high-net-worth investors for long-term positioning. When investing in financing-type assets, you must clearly understand your risk tolerance and choose compliant overseas investment paths.

Yield Assets

If you seek stable cash flow returns, there are also asset categories in Web3 that suit you.

For example, if you purchase virtual land on metaverse platforms like Sandbox or Decentraland, in the future, you can rent this land to brands or enterprises for virtual launch events, concerts, or other commercial activities to earn stable rental income continuously.

For example, if you hold Ethereum (ETH), you can choose to stake it and convert it into stETH, earning a stable return of about 5%-10% annually. This model is similar to traditional bank fixed deposits or bonds, with relatively stable and clear returns.

Likewise, on-chain U.S. Treasury bonds and real estate assets also have long-term stable yield attributes. If you are a high-net-worth individual inclined towards stable investments, these assets are particularly worth your attention.


How to allocate?

Once you establish a clear classification of virtual assets, the next critical question is how to allocate these assets reasonably.

Portal Labs recommends: What you really need is not to constantly chase market hotspots, but to find a stable balance point suitable for yourself between risk, return, and compliance.

If you tend to pursue a long-term stable investment model with relatively controllable risks, then on-chain bonds, tokenized real estate, and virtual land as yield-type assets are good choices. These assets usually have clear revenue logic and can provide you with stable cash flow. But you need to be careful; the qualifications and compliance of the issuing institutions for these assets are very important, especially in the investment of on-chain real-world assets (RWA), where you need to pay special attention to relevant regulatory policies to ensure that your funds and returns are not affected by compliance risks.

If you wish to participate slightly in the long-term growth space of the Web3 world beyond stability, then functional assets like Ethereum and governance rights assets from well-known projects (such as some mature governance NFTs or DAO tokens) are very suitable for you. The core logic of these assets is: the more prosperous the ecosystem, the higher the asset value. However, since many governance and equity assets involve overseas investments, it is best to arrange your asset allocation through compliant offshore channels to ensure fund safety while avoiding potential regulatory risks.

Of course, if you are more sensitive to market opportunities and have a higher risk tolerance, you can appropriately allocate trading assets or early financing assets, such as trading assets with significant short-term volatility or early investment opportunities on some Launchpads. However, it is particularly important to emphasize here: these high-risk assets often come with compliance risks. Therefore, the proportion of funds you invest in these types of assets should not be too high, and you must choose compliant overseas platforms for investment to avoid placing funds in a regulatory gray area.


*Disclaimer: Investing involves risks; please participate in Web3 under legal and compliant conditions.