Web3 cryptos have flown under the radar for quite some time now. And for good reason – the entire Web3 space hasn’t performed very well since late-2021, after the initial hype died down. Most projects collapsed, went silent, and their tokens were hit hard, with many losing 80%-95% of their value.

However, with the latest market spike, many Web3 cryptos are showing signs of life again. We’re seeing several smaller Web3 tokens post quadruple-digit returns, gearing up for significant breakouts. This presents an interesting opportunity. If you can identify the right projects early, substantial gains may be possible before the herd piles in.

This is still a risky place to invest. Indeed, these are speculative assets, many of which have no intrinsic value. So, don’t bet the house on it. However, the risk-return profile of many Web3 projects can be attractive if you take a targeted approach and spread your capital across a basket of emerging cryptos. Here are three to consider right now.

Gains Network (GNS-USD)

Gains Network (GNS-USD) provides investors iwth an intriguing value proposition – it’s developing gTrade. This decentralized leveraged trading platform aims to be liquidity-efficient and user-friendly, offering advantages over existing DeFi trading protocols.

Here’s what recently caught my attention with this project: Gains uses a uniquely-designed synthetic architecture that makes gTrade very capital-efficient. This allows Gains to offer low trading fees and a wide range of leverage options, up to 150x on cryptos and even 1000x on forex. The marketplace’s potential trading volume could balloon if we enter another crypto bull market. And if gTrade grabs a fraction of this volume with its competitive edge, the upside for GNS could be substantial.

Additionally, this project’s tokenomics support an active utility model within gTrade itself. Gains’ GNS tokens allow holders to capture platform revenues and participate in governance. The ecosystem also issues NFTs that offer reduced spreads, as well as other perks. This circular loop drives usage and fees back into the protocol. As volume picks up, the flywheel spins faster.

My bull case is that gTrade could see rapid user adoption as the leading decentralized margin trading platform. Thus, Gains, at a $141 million current market cap, could approach a valuation of more than $1 billion, if this bull market rally continues.

Bittensor (TAO-USD)

Bittensor (TAO-USD) is an AI marketplace that brings buyers and sellers together. It lets anyone monetize AI models through the network. The more valuable your model, the more tokenized rewards you earn.

We’re seeing surging interest in AI, especially around creators leveraging AI to build tools, content, etc. A blockchain model to distribute rewards tied to an open AI repository unlocks new opportunities.

In many ways, Bittensor charts a similar path to computing networks like Golem (GLM-USD) and iExec (RLC-USD), allowing anyone to monetize spare computing resources. However, Bittensor is tailored to AI workloads and models. As blockchain-based AI adoption increases, Bittensor has a shot at becoming a key AI player.

If Bittensor sees traction as a tokenized marketplace for artificial intelligence, this network’s $2 billion market cap could easily enter the $10 billion-plus range. It’s not a bad asymmetric bet for early exposure to a unique Web3 concept. But as usual, size this position accordingly for risk management purposes.

The Root Network (ROOT-USD)

Root Network (ROOT-USD) is an alternate layer-1 that aims to power seamless user experiences through novel substrate-based protocols.

While the top blockchains choke under a massive load of metaverse data, Root offers developers core runtimes like an NFT engine and asset bridges for building consumer-facing metaverse apps. This project optimizes the gas fee economy, allowing brands to onboard users smoothly.

Essentially, Root wants to be the substrate for open metaverse applications. That is, the highway that connects everything. This blockchain is purpose-built for the development of digital worlds, but is barely on investors’ collective radar right now with a small $85 million market cap.

That said, if Root gains traction as a hub bridging users and creators through enhanced interoperability, smoother UX, and native metaverse runtimes, adoption could explode. After all, the open metaverse wave is just getting started.

On Low-Capitalization and Low-Volume Cryptocurrencies: InvestorPlace does not regularly publish commentary about cryptocurrencies that have a market capitalization less than $100 million or trade with volume less than $100,000 each day. That’s because these “penny cryptos” are frequently the playground for scam artists and market manipulators. When we do publish commentary on a low-volume crypto that may be affected by our commentary, we ask that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
 Read More: How to Avoid Popular Cryptocurrency Scams

On the date of publication, Omor Ibne Ehsan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.