Staking and Liquid Staking:

Staking is a common entry point, allowing users to lock up their crypto to help secure a network (e.g., Ethereum) and earn rewards. Liquid staking protocols provide users with a derivative token (like stETH or rSOL) that still earns staking yield but can also be used in other DeFi applications, offering flexibility and potentially compounding returns.

DeFi Lending and Borrowing:

Platforms like Aave and Compound allow users to lend their idle assets to borrowers via smart contracts and earn interest. This transforms a passive holding into a source of income and provides an on-ramp to other DeFi activities.

Liquidity Provision (LP) and Yield Farming:

Users can deposit a pair of assets into a liquidity pool on a decentralized exchange (DEX) like Uniswap to facilitate trading and earn a share of the transaction fees. Yield farming involves strategically moving funds between different protocols to chase the highest returns, which is a more active approach for experienced users.

Automated Strategy/Robo-Advisors: To simplify complex yield farming, some new protocols offer automated strategies that dynamically allocate user funds to the most profitable opportunities across various platforms. These tools use oracles to find the best yields and manage positions, reducing the need for constant, manual management.

Stablecoins Integration:

Stablecoins (e.g., USDC, DAI) offer stability and a trusted medium for transactions, helping onboard users who are wary of volatility. Their integration into familiar payment systems can facilitate engagement without requiring deep technical knowledge.

Structured Products & Crypto Indexes:

These products spread capital across multiple assets or strategies, offering diversification and a way to generate returns without the need for active management.

Token Rewards and Airdrops:

Projects incentivize participation by distributing their native tokens to holders or early users who perform simple tasks like trading or providing liquidity. These can encourage long-term holding and community engagement. 

Overcoming Barriers

Improved User Experience:

Projects are focusing on creating user interfaces that look and feel like familiar Web2 products to lower the barrier to entry.

Education and Onboarding:

Providing clear, comprehensive educational content, tutorials, and FAQs helps break down complex Web3 concepts and build user confidence.

Risk Mitigation:

Highlighting security audits of smart contracts, promoting diversification, and explaining risks like impermanent loss and liquidation are crucial for user safety and trust.

Regulatory Clarity:

Building strong relationships with regulators and implementing robust compliance frameworks can build trust with users and institutions, fostering a more stable environment for adoption.

Lower Fees/Faster Transactions: