Trading in the Web3 era

Web3 is redefining how people approach trading. Instead of relying on banks or centralised exchanges, users now have the tools to manage their assets directly. With just a wallet and an internet connection, anyone can trade, access financial services and stay in full control of their funds.

This change brings new ways to engage with digital finance. It opens up markets, reduces costs and puts decision-making power back into the hands of individuals. Whether you're looking to earn, save or grow your investments, Web3 offers a flexible and transparent path forward.

• Web3 trading removes intermediaries, giving users direct control over their assets and transactions.

• Tools like non-custodial wallets, DEXs and governance tokens enable peer-to-peer trading and decentralised decision-making.

• The main benefits are flexibility, earning potential and global access, while key risks include scams, volatility and technical challenges.

• The shift to decentralised finance signals a long-term move towards more transparent, user-led financial systems.

What is Web3 trading?

Web3 trading represents a new approach to exchanging cryptocurrencies within a decentralised ecosystem. Unlike traditional trading, which relies on centralised platforms like exchanges and brokers, Web3 trading allows users to maintain full control over their assets without depending on intermediaries.

It functions as an autonomous ecosystem where transactions occur directly between users through smart contracts and decentralised applications (dApps). The absence of a central authority enables users to operate independently, retaining sovereignty over their funds and reducing risks associated with centralised systems.

Web3 trading is based on three key principles:

• Decentralisation: Power and control are distributed among all users, eliminating the need for centralised intermediaries.

• Permissionless access: Anyone can participate freely without requiring approvals or authorisations from external entities.

• User sovereignty: Each trader manages their assets through non-custodial wallets, ensuring full control without relying on third parties.

This shift marks a radical transformation in the financial system, steering the future towards a more secure, transparent, and decentralised model. The foundations of Web3 trading are straightforward, and the opportunity to operate autonomously and securely is rapidly becoming a tangible reality.

Web3 vs traditional trading: what’s the difference?

While traditional trading relies on third parties, rules from the top and trusting external actors, Web3 offers a system that’s open, transparent and user-led.

The biggest differences lie in four key areas:

• Custody: In Web3, you keep full control of your assets with a self-custody wallet – no banks or exchanges needed. In traditional trading, assets are held by others, which introduces risks such as mismanagement or frozen funds.

• Access: Decentralised platforms are open to everyone with an internet connection, without required sign-ups or local restrictions. Traditional markets often require verification and are limited by geography or regulation.

• Transparency: Every Web3 transaction is public on a blockchain and easy to verify. Centralised markets often work behind closed doors, where trust depends on the platform’s reputation.

• Trust: In traditional finance, trust is placed in institutions. In Web3, it’s in the code – automated smart contracts handle everything transparently and reliably.

While Web3 gives users more freedom and control, it also shifts more responsibility to each individual. Traders should be aware of:

• Volatility: Digital assets can change value quickly, increasing the risk of loss.

• Technical complexity: Understanding how to use wallets, smart contracts and blockchain technology takes some learning.

• Security risks: Blockchains are tamper-resistant, but smart contract bugs, phishing scams and user mistakes can still cause losses.

If you're ready to take your first steps into the world of Web3 trading, read our guide on “How to get started with Web3”.

Key tools for trading in the Web3 era

To trade in Web3, it's essential to know and use certain resources that allow users to operate autonomously within decentralised platforms. These tools facilitate access to a secure, transparent, and decentralised financial ecosystem. Here are the main ones:

• Self-custody wallets: A self-custody wallet, like the Bitpanda DeFi Wallet, enables direct management of digital assets (tokens, NFTs, stablecoins) without intermediaries, interacting with dApps, DEXs, and DeFi protocols, offering secure access to the Web3 ecosystem.

• Decentralised Exchanges (DEXs): DEXs allow direct transactions between users without a central order book. Through smart contracts and liquidity pools, they reduce intermediation costs and let users maintain complete control over their operations.

• Decentralised Autonomous Organisations (DAOs): DAOs enable decentralised platform management, where users make collective decisions without a central authority, contributing to platforms' evolution autonomously and transparently.

• Token-based governance: Token-based governance allows users to participate in managing Web3 platforms, earning voting rights based on the tokens held, influencing decisions like technical changes and strategies, eliminating the need for centralised authorities and promoting distributed management.

These tools form an ecosystem that challenges the centralised model, adopting open and modular solutions for a fully autonomous trading experience.

Advantages and risks of Web3 trading

Web3 trading offers multiple advantages, transforming traditional trading into a more dynamic and accessible experience. Among these are:

• Earning opportunities: Tools like staking, lending, and liquidity mining allow users to generate active income, creating new revenue opportunities from their capital.

• High flexibility: Users can operate quickly and in a personalised manner, adapting to market conditions and their own needs.

• Global inclusivity: Without access barriers, Web3 trading democratises financial markets, allowing anyone, anywhere, to participate without restrictions.

These advantages make Web3 trading a unique opportunity for those seeking an alternative and profitable approach to financial markets. Additionally, the system enables direct exchanges between users (Peer-to-Peer) and liquidity pools, promoting faster and more secure transactions in a decentralised context.

However, Web3 trading also presents some challenges and risks to consider. In particular:

• Scams: Inexperienced users might fall victim to fraudulent practices by malicious actors.

• Impermanent loss: When asset values change unfavourably in liquidity pools, users might incur unrecoverable losses.

• Smart contract bugs: Vulnerabilities in contract codes can compromise transaction security.

What types of assets can you trade in Web3?

In Web3 trading, an asset’s value is shaped by its tokenomics – the rules that define how it’s created, distributed and used within its ecosystem. Understanding tokenomics helps users make smarter, more strategic decisions.

Here are the most common types of tradable assets in Web3:

• Native tokens (e.g. ETH, SOL, AVAX): Used for paying network fees and as the main currency in blockchain ecosystems.

• Governance tokens: Let users vote on platform decisions, from protocol upgrades to funding changes in DAOs.

• Stablecoins: Designed to hold a steady value, they help protect against market swings and support safe, reliable transactions.

• NFTs (non-fungible tokens): Unique tokens that prove ownership of digital items like art or collectibles, creating new markets and trading opportunities.

Top Web3 trading strategies

Web3 trading strategies vary depending on your goals, risk appetite and experience. In a decentralised environment, where you control every move, there are several tools and approaches to choose from. Knowing how each strategy works and when to use it is key to trading confidently in this volatile ecosystem.

Swapping vs trading

There are two common ways to exchange digital Assets in Web3: swapping and trading. Both aim to help users profit or convert tokens, but they suit different levels of experience.

• Swapping: Swapping lets you exchange one crypto for another instantly using decentralised exchanges (DEXs) like Uniswap or PancakeSwap. It’s simple and ideal for beginners or anyone wanting quick conversions without handling complex orders or market analysis. However, keep in mind issues like slippage, the difference between the expected and actual transaction price, especially during low liquidity or high volatility.

With Bitpanda Swap, you can seamlessly swap any supported crypto asset for another within seconds, directly on the Bitpanda platform. It’s ideal for beginners and anyone looking for quick and effortless conversions, without dealing with order books or market timing. Just choose the assets, confirm the swap, and you're done.

• Trading: Trading is a more advanced approach. It involves using tools like technical analysis, price charts, market orders and risk management strategies to decide the best time to buy or sell. It allows for higher profit potential, but it’s time-intensive and riskier.

Yield farming and staking

Web3 also lets you earn from your assets passively, particularly through DeFi strategies like yield farming and staking. Both can generate returns but differ in risk and complexity.

• Yield farming: This means providing liquidity to DeFi protocols in exchange for rewards, often paid in bonus tokens. You deposit token pairs in liquidity pools that fuel decentralised services and earn a share of the trading fees or incentives. While returns can be high, so can the risks – mainly from impermanent loss, where token values shift unfavourably. Yield farming is best for those who understand DeFi and how protocols work.

• Staking: Staking involves locking up tokens (e.g. Ethereum, Cardano or Polkadot) to support a network’s operations, like transaction validation. In return, you receive periodic rewards, like passive interest. Compared to farming, staking is more stable and doesn’t involve pairing tokens or direct exposure to impermanent loss – making it ideal for users who want consistent returns with lower volatility.

Strategic planning and risk management

No matter your strategy, you should always trade with a plan:

• Set clear, realistic goals (target return, time frame, risk tolerance)

• Use risk management tools like stop-losses

• Diversify your holdings across multiple assets to limit exposure

• Check the reliability of platforms you use, like the Bitpanda DeFi Wallet, by reviewing audits, community feedback and trading volume

Trusting secure, verified DeFi protocols helps reduce risk and increase returns over time. This approach leads to a stronger, safer decentralised trading experience.

Bitpanda and the future of Web3 trading

Bitpanda is shaping the future of decentralised trading by focusing on accessibility, personal control and top-level security. With tools like the Bitpanda DeFi Wallet and Vision (VSN) token, Bitpanda makes Web3 accessible without sacrificing autonomy or safety.

Bitpanda DeFi Wallet

This self-custody wallet gives users full control of their digital assets. With access to over 3,000 cryptocurrencies for instant swaps and cross-chain functionality, it lets users interact directly with dApps, DEXs and DeFi protocols. The Discover section adds even more opportunities, making Web3 simple and secure for everyone, from beginners to experts.

Vision (VSN): Bitpanda’s native token

Vision (VSN) powers the Bitpanda Web3 ecosystem. It’s used to pay fees in the Vision Protocol and offers benefits like:

• Trading discounts up to 20%

• Staking with up to 10% APY

• Access to airdrops and Launchpad rewards

Thanks to decentralised governance, VSN holders can vote on key decisions via the Vision Web3 Foundation, directly influencing how the protocol evolves.

With user-first, intuitive tools, Bitpanda is redefining decentralised trading, helping users explore new investment opportunities while staying in full control of their assets. This is a key step towards a more transparent and decentralised financial future.

Conclusion

Web3 is changing how people interact with digital markets, giving users full control of their assets. With no middlemen, trading becomes more transparent, autonomous and secure.

This shift brings unique opportunities, but also demands awareness and responsibility. Succeeding in Web3 means understanding the tools, strategies and risks involved.

Explore more on Web3 with Bitpanda Academy

Want to dive deeper into Web3, how it’s shaping the internet, and what role Web3 wallets play in this new digital era? Explore more expert insights in the Bitpanda Academy and stay ahead of the next big shift in digital technology!