1. Mine Helium (HNT) by Providing Wireless Coverage
Helium is a special purpose blockchain that tokenizes wireless data (e.g. 5G data or its lesser-known sibling “LoRaWAN” used by smart devices). The native cryptocurrency of Helium is “HNT” which is required to pay for data transfer through Helium and which can be mined by anyone with a Helium compatible data hotspot device.
Mining is very simple: it consists of simply running a hotspot device that pulls a small amount of electricity. However, while anyone can purchase a hotspot device and mine, the amount you earn from mining depends upon how much data is relayed through your device, which in turn depends upon both how much data demand there is in your local area as well as how much helium hotspot competition there is in your local area.
You can check the specific level and location of Helium network competition in your local area using this Helium coverage map. To help you start mining, there are several companies selling Helium compatible hotspot devices. A list of miners available as well as additional information on how to mine is available on the official Helium mining info page. The cost differs by miner model, but most models are between $450 and $1000.
2. Roblox for Blockchain Games
Blockchains allow game developers to create in-game assets which can be bought, sold, exchanged, and traded amongst different players and used in any game at the same time. At the same time, blockchains allow game developers to retain as much control of and commission revenue from game asset transactions as they wish.
In essence, blockchains provide gamers with a universal marketplace for buying, selling, trading, betting against, and borrowing game assets across all games, and they provide developers with ultimate flexibility on monetizing game economies and raising money to develop new games.
However, despite these advantages, few blockchain games have actually been developed. One reason for this is that developing blockchain games requires technical skills (blockchain software developer skills) that most game developers today don’t have. And this provides an opportunity: Do for blockchain games what Roblox did for internet games.
Roblex made building an online game so easy that non-experts could make games good enough that millions of people would play. It also provided a single platform where a user could access a multiverse of connected games, but the multiverse is restricted to only Roblox platform games.
Blockchain provides the perfect opportunity for launching a Roblox competitor. Build a platform that allows people to build blockchain games without needing to know any details of how blockchains work. Make it as easy to build a blockchain game as it is to build a Roblox game.
A startup of this type would benefit from two large secular tailwinds: blockchain and video games. The total addressable market is large and rapidly growing, and yet competition in terms of tools that help people build blockchain games is very minimal.
3. Tokenize Street Vendor Permits
Blockchains are naturally suited to store records for property titles, certificates, credentials, licenses, and permits. Governments are the largest producers of such records, making the tokenization of such government records an extremely valuable opportunity. However, implementation in this area requires working with slow and difficult government bureaucracies.
Street vendor permits are low hanging fruit in this regard: they are issued by cities rather than states or federal agencies and so the bureaucracies you’d need to partner with are as small and simple as possible.
You could start a business by partnering with a single city (e.g. Miami or some other city with a mayor enthusiastic about crypto), and then once your token system is proven in that city, expand to others.
The revenue model would be to take fees from the issuance of permits.
4. Tokenize Business Licenses
Business licenses are another group of low hanging fruit for government record tokenization as they are most commonly issued by individual counties.
Start by partnering with a single crypto-friendly county such as Miami-Dade and move their business licenses on chain. Ethereum or Avalanche would probably be the best blockchains to represent business licenses on.
5. Avalanche Validator
Avalanche is a blockchain supporting smart contracts like Ethereum, but it is much faster and cheaper to use than Ethereum. Avalanche uses a proof-of-stake security model, so it relies on validators in the same way that Bitcoin relies on miners.
To run an Avalanche validator node, you will need a computer (nothing too fancy), a reliable internet connection, and a minimum of 2000 AVAX (the native cryptocurrency of the Avalanche blockchain). At the time of writing, AVAX is trading at $109.50 which means the 2000 AVAX minimum equates to $219,000. You can check the current cost of AVAX here.
Avalanche validators can earn up to 11% APY from staking rewards. You can find additional information about how to become an Avalanche validator in the official Avalanche Validator Documentation.
6. Crypto Freelance Writing Agency
The constantly growing demand for more content marketing blog posts is a driver that is growing the freelance writing industry at an impressive pace year after year. Top writers on Fiverr.com rake in over $350,000 a year writing online content such as blog posts and ebooks for businesses. However, the opportunity gets even more interesting when you bring crypto into the picture.
How many people could tell you what a blockchain domain is or what it can be used for? How many people could tell you key differences between lending on Aave and Compound? Or the difference between Uniswap governance and Sushiswap governance? The answer is very few. The explosion of crypto into the mainstream means businesses are suddenly demanding significantly more crypto content than the few people with substantive understanding of crypto are able to provide.
The market opportunity is then to provide freelance crypto writing services. You could try to create a marketplace business to fulfill this need, but that would mean you have all the same difficulty as any existing freelance marketplace in sourcing qualified writers but only keep a small fraction of the revenue generated. Instead, I believe the optimal business model to take advantage of this opportunity would be a freelance writing agency.
Recruiting writers for the agency will still be difficult, but you can start by doing writing yourself (possibly through Fiverr initially to build your brand), and as you are able to find and recruit more qualified writers, you can build your agency and retain more profit than in a marketplace business model. In addition, building your business as an agency has the benefit of being able to ramp up faster than a marketplace model since you can dedicate more time to finding writers to immediately take advantage of the excess demand that will likely exist for at least the next 1-3 years.
7. Crypto Compliance Consulting Agency
Hedge funds, banks, fintech companies, and a variety of crypto startups all have significant regulatory and legal compliance requirements related to the use of cryptocurrencies and blockchains in their businesses.
Taxes, securities laws, commodities laws, banking laws, anti-money laundering laws, insurance laws, consumer protection laws (e.g. for startups using on-chain identities to issue uncollateralized on-chain debt using some sort of on-chain credit score) — there are a huge number of categories where crypto compliance is necessary for these businesses, yet the supply of lawyers, accountants, and consultants with knowledge of crypto is very small.
The opportunity to create a firm that provides crypto & blockchain compliance consulting services to businesses is huge and rapidly growing as more companies use crypto in some way and as regulators add more rules. You don’t need to be a lawyer or accountant to start this type of business, but you should have detailed knowledge of at least one area of crypto regulation.
8. A CFTC-approved Options Trading DEX
On-chain asset exchanges like Uniswap have exploded in popularity over the past two years, but exchanges for options have not. Part of the reason for this is technical difficulty, but the larger reason is regulation. In order for an options trading DEX (decentralized exchange) to be legally accessible by U.S. citizens, the DEX must be compliant with the CEA (Commodities Exchange Act) and CFTC (Commodities Futures Trading Commission) regulations.
Starting a properly licensed and regulated options trading DEX in the U.S. would definitely be difficult, but it would also be hugely popular and would serve as the only legal decentralized competitor to centralized crypto options exchanges such as FTX US Derivatives (previously named LedgerX).
9. DeFi Long-Term Fixed-Rate Loans
DeFi lending platforms such as Compound and Aave have demonstrated that on-chain lending can be done. However, neither these platforms nor any of the other popular DeFi lending platforms are really useful for anything other than trading leverage since the interest rates are too volatile.
A startup business opportunity is to create a DeFi protocol that offers long-term (e.g. 5-30 year) fixed rate loans. You could start by offering loans overcollateralized by crypto, and then eventually expand to undercollateralized or even uncollateralized loans when a robust on-chain personal identity system is developed. Another possible future expansion of this business could be using tokenized assets such as real estate titles as collateral once such assets are tokenized in the future.
10. Tokenize Vehicle Titles
Partner with a forward-looking crypto-friendly state such as Wyoming to tokenize vehicle titles. You could potentially start with something like boat titles which are less critical than road vehicle titles, and then eventually expand to tokenize road vehicle titles as well. Once the system is proven in one state, expanding to partner with other states should be easier.
Monetization could be done via title creation and transfer fees. In addition, this idea could be combined with the last idea by enabling people to take out long-term fixed-rate vehicle loans that are secured by the vehicle title in the same way as current vehicle financing companies structure loans.
11. Escrow
Escrow is one of the most straightforward applications of smart contract blockchains, but it relies on some sort of property title such as a real estate title or vehicle title first being tokenized. A good business strategy could be to tokenize vehicle titles as described in the previous idea and then add a blockchain escrow service to your business.
12. EdTech: Tokenize educational diplomas, degrees, certificates
Create an ed-tech (educational technology) company that helps colleges, universities, high schools, and other degree, diploma, and certificate-issuing organizations to tokenize degrees, diplomas, certificates, and transcripts on-chain.
The value proposition to credential-issuing institutions is reduced administrative overhead in sending proof of credentials for their students to credential-requesting organizations (e.g. a college requesting high school transcripts and proof of diploma or an employer requesting university transcripts).
The value proposition to credential-requesting organizations is standardization and reliable security of the credential receipt process (e.g. employers will have reduced risk of employment fraud with workers lying about parts of their resume).
The value proposition to credentialed alumni of credential-issuing institutions is that the alumni have access to a fast, reliable, standardized method to prove any of their credentials to anyone.
NOTE: The tokenization of diplomas and degrees would be relatively straightforward, but the tokenization of transcripts would need privacy features.
13. TheGraph Indexer
“The Graph“ is a partially decentralized protocol designed to make certain information about blockchains like Ethereum more searchable and accessible. The main idea of the Graph protocol is to make smart contract and blockchain information accessible via GraphQL (a query language analogous to but more powerful than SQL) APIs. In “the Graph” protocol jargon, such an API is called a “subgraph”.
Developers create subgraphs and then deploy them to the Graph Network (currently operated in a somewhat centralized manner by the company developing the Graph). Once a subgraph is deployed, anyone can become an indexer for that subgraph. An indexer must store and/or otherwise make the data needed by the subgraph (i.e. the API) available on demand. In return for this service, indexers earn query fees by users of the subgraph as well as GRT token rewards from the Graph Network.
To maximize your earnings as an indexer, you’ll want to identify up-and-coming sugraphs that have the potential to be used a lot by developers creating future web3 apps. You’ll then need to index these as efficiently as possible.
You can find additional information about Graph protocol indexing here.
14. TheGraph Curator
Another way to earn from the Graph protocol is to serve as a subgraph “curator”. A curator is essentially an investor in subgraphs: they find subgraphs with promising growth prospects and then stake GRT tokens through the Graph Network on the success of those subgraphs. The staked GRT tokens then entitle the curator to a percentage of all future query fees generated by a curated subgraph, with the exact percentage determined by how early on the curator invests in the subgraph (early investors in a subgraph get larger percentages of query fees than later investors for the same amount of staked GRT).
Because of the non-constant “bonding curve” relating query fee percentages to amount of GRT already staked on a subgraph, you can end up with either more or less GRT in the future if you decide to unstake from a particular subgraph. You can find more information about how Graph protocol curating works in the official documentation.
15. Crypto Law Firm
The crypto industry intersects tax law, securities law, commodities law, banking law, anti-money laundering laws, and consumer protection laws. The intersections are complex and still developing so that there is significantly more demand for legal advice from crypto startups and traditional companies entering the crypto industry than there is supply of legal services from lawyers familiar with digital asset / crypto / blockchain law.
This provides a great opportunity for lawyers and students going into law to establish themselves as experts in a new and rapidly growing industry with huge potential and little competition. The best place to start a crypto-centric law firm would probably be an area like south Florida which is attracting a lot of crypto startups in addition to being highly populated.
16. Blockchain Development Agency
There are a lot of businesses trying to enter the crypto industry, but relatively few good blockchain software developers. This means there is a large opportunity for someone with both blockchain expertise and software developer skills to start an agency that does contract work building smart contracts and doing other blockchain software development.
You could start by doing freelance blockchain software development on a platform like Fiverr and then eventually leverage your reputation into a brand that can be trusted outside of Fiverr.
Alternatively, could you start your business without ever using a freelance marketplace like Fiverr by instead cold messaging lots of people and businesses until you can get a first client who needs to develop a relatively simple decentralized application.
17. Chainlink Node Operator
Chainlink is a protocol where node operators make off-chain data available on-chain for networks like Ethereum, BSC mainnet, Avalanche mainnet, Arbitrum mainnet, and more. Node operators are rewarded with LINK at a variable rate determined by negotiation between the chainlink node operator and one or more sponsoring entities requesting the data source provided by the node operator.
The official intro guide to running a Chainlink node is available here. For an overview of LINK tokenomics and the role Chainlink plays in the crypto ecosystem, check out this twitter thread. Also, if you want to provide data to the Chainlink network, check out market.link.
18. Tokenize Hunting & Fishing Licenses
Hunting licenses and fishing licenses are usually issued at the state level. Work with a crypto-friendly state such as Wyoming, Nevada, Montana, Texas, or Florida to tokenize licenses at the state level.
One major value proposition for license holders could be directly encoding temporal and geospatial restrictions on various types of hunting and fishing directly into the permit smart contracts rather than having licenses that must be interpreted through a hierarchy of regulatory brochures for specific hunting areas as is the case in Florida, for example.
19. Cardano Validator (aka Stake Pool Operator)
Cardano is a smart contract platform that competes with Ethereum, Polkadot, and Avalanche. Cardano is a proof-of-stake blockchain that relies on validators (also called nodes, node operators, staking pools, or stake pool operators) to secure the blockchains.
Validators on Cardano can stake ADA (the native cryptocurrency of Cardano) from two sources: validator-owned funds and delegated funds. The rate of reward earned on the staked funds depends upon how much ADA is validator-owned as well as on the performance (up-time, accuracy, etc) of the validator.
You can find official information about how to set up and operate a staking pool here.
20. On-Chain Stock Exchange with Tokenized Stocks
A business idea that has very high potential but also very high regulatory and legal burden is to start an on-chain stock exchange (or more accurately, an “alternative trading system”). “Alternative Trading System” is a legal term for a business that appears to normal people as a stock exchange but which is more flexibly regulated than legally designated “National Stock Exchanges”.
The goal would be to create a competitor to companies like NASDAQ and the NYSE. The NASDAQ succeeded in competing with the much older NYSE by using more granular stock pricing with decimals using computers. This granularity, together with the use of electronic trading systems, attracted companies to list with NASDAQ by reducing the complexity and cost of initial and ongoing listing requirements as compared against the NYSE.
To make an on-chain stock exchange attractive to companies looking to list publicly, you would need to incentivize them with easier and/or cheaper listing systems.
One way you could incentivize companies to list with you is to help them save on corporate governance costs by using programmable on-chain governance solutions.
Another way to incentivize them is by providing access to “smart securities”. For example, many merger securities (custom types of securities contracts sometimes offered when a company participates in a merger) are complex if-then-else condition trees that are written up by lawyers and then must be tracked and managed in a mostly manual fashion. However, these types of contracts are extremely amenable to being instead represented with smart contracts where all the if-else conditions and time conditions can be represented and automatically executed by computer, thereby reducing the cost to companies of managing these types of securities.
A third way you might be able to incentivize companies to list is by helping them reduce the accounting and auditing compliance costs associated with being a public company. You could potentially accomplish such cost reduction by performing certain company treasury operations on-chain.
To execute on this idea, you would definitely need a founding team member with strong expertise in securities law.
21. Crypto Investment Fund
There are many notions of “efficient market” that could be debated, but one clear instance of an inefficient market is when options trades occur at prices spanning up and down a 40% range multiple times in a day while the underlying asset barely moves. Another clear instance of an inefficient market is when high-value arbitrage opportunities exist for hours at a time before anyone takes advantage of them. Both of these things happen in crypto markets and exemplify why full-time crypto trading and investing can be extremely profitable if you have the temperament and ability to immerse yourself in technical and market research.
If you enjoy playing the research and trading game, then a great type of business that allows you to maximally leverage these skills is a private investment fund (i.e. a hedge fund) that trades crypto. Exposure to crypto is difficult for investors to get in mainstream markets, which means demand for private crypto investments is high. In addition, the crypto space is changing rapidly and has few experts, which means the competition within the private crypto investment fund space is relatively low.
The basic business structure of a fund is actually two entities: a management company (typically an LLC = limited liability company) and a “fund” company (typically an LP = limited partnership). Fund investors buy shares of the fund company and then your management company serves as general partner of the fund partnership company and earns fees based on fund performance.
22. Smart Contract / Dapp Security Analysis SaaS Tool
In 2020 and 2021, multi-million and even multi-hundred-million dollar smart contract hacks and exploits have been common occurrences. The problem is twofold: the immutability of the blockchain means smart contract bugs cannot be fixed after launch, and the transparency of the blockchain means the code of a smart contract is entirely visible to every potential attacker.
Developing software in that kind of paradigm, especially when the software is securing billions of dollars, must be done with significantly more caution than the software development processes used by most developers currently. To accommodate this high-stakes development paradigm, sophisticated security testing tools are necessary. Currently, there are a few tools and companies in this area, but they are insufficient, especially as smart contracts are used in more and more complex applications.
Smart contract security tools and services are an important and growing need that you could build a company around. If you have a background in an area such as formal verification (a subset of computer science), this type of business may be ideal for you.
23. Tokenize Authenticity Records for Purebred Dogs
Tokenize and track authenticity records for purebred dogs. People really value verifiability in this space, yet there is no government bureaucracy that must be satisfied as is the case with tokenization of government records. You could even track lineage and ancestry trees on-chain!
With the popularity of blockchain games such as crypto kitties, you might even consider “gamifying” the purebred record business and essentially making into a hybrid real-virtual game where people can search for and find other dogs, request meetups to breed with them, etc. (It might be a crazy idea, but it is in the spirit of “metaverse” hype which is attracting lots of attention and funding currently).
24. Ethereum 2.0 Validator
Setting up an ethereum 2.0 validator node is pretty simple. Essentially, you setup a dedicated computer, download and install the ethereum client software for ethereum 2.0, and then you stake your ethereum and let the software run.
To run your own validator, you’ll need to have at least the minimum staking amount of 32 ETH (at the time of publishing, that equates to $141,600 with an ETH price of $4425).
25. B2B company that helps B2C companies setup crypto reward systems
Create a business that helps consumer-facing businesses create crypto reward systems for their customers. For example, your business might help a wine company put QR codes on wine bottles where customers can scan QR codes to get NFTs that they collect to eventually exchange for more valuable NFTs. It may sound odd, but the wine example is very similar to the business model used by Blue Chip Stamps (one of the cash-flowing golden geese of Berkshire Hathaway). In essence, your business could help other businesses create Blue Chip Stamp type revenue streams in their businesses.
26. BandChain Data Provider
BandChain is a competitor of Chainlink. Like Chainlink, it relies on data provider nodes to supply the data on-chain, and these data providers earn rewards. You can find official information about data providers here and you can read a simple introduction to earning here.
If you do decide to start a crypto business, you’ll need to find a crypto-friendly bank that offers business accounts as not all banks are willing to deal with crypto companies. For that reason, I’ve put together a list of the best crypto business bank account options so that you can get up and running with your new business faster.