It’s official: whether you think we are living in the dumbest timeline, or you are enjoying how things are being shaken up, we are certainly living in the strangest timeline.
What a difference a few weeks can make, and who knows what the next few weeks will bring. Global tariffs were suddenly thrust upon markets everywhere (not even penguin-filled islands were safe), and the numbers were brutal for many. From the US perspective, these tariffs were an overall reflection on the perceived imbalance of trade between it and other countries, and the amount of tariff each country received was an attempt to “balance” that deficit and regain some of the money lost through unfair trade practices.
While most economic experts, country leaders, and much of the population were very confused on both the reasoning and the execution of the plan, the fact remains that these tariffs are real, and they really do impact much of our daily lives. If you haven’t noticed, we live in a tight-knit, global trade community. If you buy something, there is an extremely high chance that either the product or at least some of its components comes from somewhere else. And no matter where you live, that item is now more expensive. With the US launching its tariff first-strike, other countries globally immediately struck back. The war has begun, and who knows when it will end.
At the last minute, the US paused its tariffs on most countries for 90 days. This might seem like a reprieve, but given the whiplash nature of the Trump administration’s strategy, this means almost nothing and tariffs could be back on tomorrow (or later today for that matter). Some countries who issued retaliatory tariffs have acknowledged the pause, but have not paused their own, citing essentially this same sentiment. And then there is the matter of China and the US, representing the two largest economies in the global market, and no pause at all in the tariffs between the two. On the contrary, there seems to now be an escalating arms race to see which country can hit 200%, 500% or 1,000% tariffs first.
With all this mess, it’s hard to find an area that hasn’t been devastated by these decisions. Whether it’s stocks, bonds, currency, or even capital, all of these have been hit hard by the last few months, and even if everything were reversed today, the damage is done, and this level of uncertainty (and uncertainty is a poison pill for the markets) is with us to stay for the long term. But is everywhere caught in the blast wave?
Web3’s Safe Havens of Productivity
It might seem that there is no escape from the tariff turmoil, but if we look a bit closer, the Web3 community is purposefully separate and apart from traditional markets. It’s always been clear about its strength as a different animal, giving value in ways that traditional markets can’t, and being affected differently than the stock tickers at the bottoms of news screens. While this has created struggles for Web3 during times of bear markets (especially when other markets were stable), we are now seeing that this can also be a major strength. The world is burning, but Web3 is acting as the fallout shelter, protected from the ordinary swings of the market.
So how does Web3 insulate itself from market swings, and why is this a good thing? If you think about Web3, you see that it is in many ways a parallel economy to the traditional financial and economic system. Physical companies have stocks that make up markets, and they sell goods/services that are shipped across the globe. How different countries regulate, consume, and tax these things makes a big difference (as we see right now). With Web3, however, the economy transcends your typical borders, and the cryptocurrencies traded aren’t directly affected by things like tariffs in the same way that traditional items are. Because some of the taxing and other elements come into play as items are turned into fiat, and because it depends on the country where the Web3 platform is based, the economy of crypto can be separated from the traditional effects we see. For those in the business, this is a huge opportunity to weather out the storm in their Web3 safe havens and bunkers.
Staking as a Strategy
Holding cryptocurrency is a basic strategy, and holding RWAs can also be helpful to insulate spikes and dips in the traditional markets. However, staking is as popular as ever within the Web3 community, and it has matured a great deal since the “Wild West” days of massive gains and equally massive risks. Staking, like any financial action, carries with it a certain amount of risk and uncertainty, but that continues to drop as the Web3 community grows and platforms mature.
As a key example, one of the most successful staking platforms in Web3, P2P.org, has created an entire industry out of Staking-as-a-Business service. P2P.org is a leading Solana validator with more than 4 million in staked SOL, and it uses this weight to provide stable staking services for businesses and institutions looking to strengthen their portfolios, whether those portfolios are solely crypto-based or if P2P.org staking is part of a diverse Web3 and traditional portfolio. The service is now stable enough to offer general estimates on the returns you can expect, with their guide to staking SOL showing how a return of 7% is entirely possible.
Given the market craters taking place on the traditional side, just being able to hold onto the original value of assets is desperately attractive. Being able to do that while aiming for a full 7% return? In these times, this is unheard of and demonstrates a deeper and more strategic value of our growing Web3 ecosystem.
Looking Ahead
While mass adoption is still a goal on the horizon, this latest round of market insanity (and the promise of more to come) shows just how much we need Web3 in our lives. In addition to the many, many use cases that leverage blockchain in ways we simply can’t achieve any other way, the very existence of parallel markets like Web3 will become a more and more critical element to the portfolios of industries, businesses, and individuals. As the next wave of unpredictable storms gather on the horizon, it is comforting to know where to seek shelter.
Photo by Brian McGowan on Unsplash
