Decentralized apps are pieces of software that interact with the blockchain. The role of blockchain is that it keeps track of the status of all the participants. The user interface of decentralized apps is similar to that of any mobile application or website.
The fundamental logic of a decentralized application is represented by smart contracts. Smart contracts work as blockchain building blocks that receive information from externally available sensors/events. Moreover, they assist the blockchain in managing the status of every participant.
Decentralized apps do not have to run on top of a blockchain network. Tor, Popcorn Time, BitTorrent, and BitMessage are examples of decentralized apps that operate on a P2P network but not on a blockchain — which is a kind of P2P network in and of itself.
The Distinctive Benefits of Blockchain dApps
Blockchain dApps are naturally immune to DDoS assaults and other kinds of conventional network attacks due to the dispersed structure of the networks on which they are hosted; making decentralized banking (Defi) possible. The underlying blockchain’s strong fault tolerance, particularly when contrasted to centralized hosting providers, can also fight off the bulk of assaults from internal network members.
Moreover, a majority of the dApps are simpler to troubleshoot and update since they are open-source. When problems emerge in the code of an open-source, decentralized software project, groups of dApp developers may “swarm” the problem together without requiring management permission. As a result, dApps development is often considerably quicker than conventional software release cycles. Open-source development platforms, such as GitHub, are critical to the success of many dApps, and such technologies also allow users to predict when new updates will be released.
Censorship resistance is the most significant benefit of dApps over centralized apps in terms of pure user experience. Users of correctly built social media dApps will never have to worry about their accounts being banned or temporarily suspended for breaching selectively enforced community rules.
Users are assured that no central body will be able to “control” their involvement in the blockchain by seizing assets, as in the case of DeFi dApps. As a result, it’s no wonder that dApps of all sizes have started to thrive in areas with autocratic governments.
The Downsides of Blockchain dApps
The quality of a dApp’s user experience is only as good as the underlying blockchain’s security, scalability, and decentralization. As more people flock to the Ethereum blockchain, transaction costs have skyrocketed well above anyone’s expectations. It is relatively unusual for a Uniswap transaction charge to surpass the amount of underlying value exchanged.
Furthermore, the degree of security provided by innovative contract programming languages varies greatly. For example, several dApps built using Solidity, the Ethereum ecosystem’s native smart contract language, have been the successful subject of high-profile hacking efforts. In other instances, hackers have returned stolen money and have merely utilized network assaults to demonstrate the need to improve Ethereum’s emphasis on security. In some other cases, hacking victims did not fare as well.
The Current State of Blockchain dApps
While Blochian dApps have not yet reached the public, their quantity and popularity are increasing. There are hundreds of apps in use and development right now, with some of the more popular ones being monitored by sites like dappradar.com. Dapp categories ranging from NFTs to DeFi have registered tens of thousands to hundreds of thousands of users. Adoption is likely to rise over time as the use cases for dApps expand, and interest in these blockchain solutions grows.
Top Blockchain dApps to check out
Brave is trying to flip the internet advertising paradigm on its head by putting people in control. It is a web browser having almost 9 million active users. According to Gartner’s Cool Vendors in Blockchain Applications research, the app provides another level of worth in the world of advertising where “customer attention” is used to establish in comparison to unverifiable views/clicks on a website.
PancakeSwap is a decentralized exchange that runs on the BSC and has various additional features that allow you to earn and win tokens. It’s quick and inexpensive, and anybody can use it. Of course, there are also pancakes and rabbits.
The Trust Wallet DApp Browser allows consumers to engage in the PancakeSwap ecosystem smoothly and safely with only a few app clicks. Because Trust Wallet supports PancakeSwap natively, you can store all of your Binance Smart Chain assets, including CAKE, in your Trust Wallet after you’ve “harvested” your tokens. Furthermore, you may immediately change your CAKE tokens into other BEP20 assets on Trust Wallet if you so choose.
MakerDAO is a cryptocurrency lending platform that has its digital currency, Dai. Using this dApp, users can easily borrow and lend via a decentralized application, with no intermediary getting a cut of the profits. In addition, users like Uniswap do not need to register or provide KYC.
Dai is a stablecoin currency, which is one of the reasons investors prefer MakerDAO. This implies that its value is kept stable by being linked to the US dollar. In a crypto world where the importance of currencies like Bitcoin may change dramatically, this is a victory. Furthermore, since Dai is not linked to any particular country, no governments or banks influence the platform’s spending, lending, or borrowing.
Uniswap was founded in the United States in 2018. Uniswap’s primary purpose is the trading of Ethereum and other ERC-20 digital currency tokens. Uniswap also has a pool function. Users deposit tokens into a smart contract, which provides liquidity, and get pool tokens in exchange. Uniswap is famous for various reasons, including cheap trading costs, a self-custodial approach (users maintain complete custody of their money), and a diverse selection of tokens accessible for trade.
Autofarm is a major DeFi yield aggregator on BSC, HECO, and Polygon, with three products in its ecosystem: Vaults (yield optimizer), AutoSwap (DEX Aggregator), and farmfolio. The yield optimizer implements the most optimum methods at the lowest cost to maximize users’ yields. Furthermore, AutoSwap performs optimizations to route users’ swap transactions for users to obtain the best price and swap rates. Finally, farmfolio is a smart portfolio manager and tracker that assists customers in managing assets across many DeFi farming operations.=
The AUTO token is the platform’s native token, with a maximum supply of 80,000 and no presale or pre-farm period. Tokenomics is deflationary, and AUTO holders will profit from fees from cross-chain vaults and DEX aggregators and the token being utilized for governance. Distribution will cease around October 2021.
Idex, an initiative of Aurora, a company that has created several blockchain dApps (especially for financial services), is a decentralized exchange. In May, Aurora CEO Alex Wearn told Craig Cobb’s Trader Cobb Crypto Podcast that the exchange went online in October and saw fast growth in January. It allows you to exchange ether for ERC-20 tokens.
Idex, on the other hand, employs a “publicly verifiable” ethereum smart contract, according to Wearn. However, in its present state, Idex is not entirely decentralized. The centralized server of Idex is utilized at many stages of the operation, including queuing transactions in the order book. The white paper mentions a “fully decentralized version” of the network that is in the works.
Bancor is another Ethereum dapp that is being used widely at this time.
Bancor happens to be a market maker enabling users to trade ether and an increasing number of ERC-20 tokens. However, it does not match buyers and sellers like a conventional exchange. On the other hand, Bancor’s protocol seeks to offer liquidity across various ethereum-based assets through “smart tokens,” which, according to Bancor, provide a “built-in liquidity mechanism” via smart contracts.
Bancor raised a huge sum of $150 million in an ICO last year by selling the initial smart tokens, BNT.
LocalEthereum is another ethereum dapp which users are appreciating at the moment.
LocalEthereum enables ether transactions between people. Interestingly, this is quite similar to the way LocalBitcoins did for bitcoin.
LocalEthereum works using a smart escrow contract. Such a contract locks up the seller’s ether till the time the seller confirms that they’ve received the money from the buyer. The transfer can be via cash, transfer through bank or any other mode.
In the case of a disagreement, the smart contract names a judge (for now, only LocalEthereum, but perhaps eventually other reputable parties). The arbitrator may award the ether to one of those two parties, but not to anybody else, including themselves.
While Ethereum has made it (relatively) simple to generate new tokens, the Kyber network intends to make them valuable and accessible. It allows consumers and companies to accept payments in a wide variety of tokens, even unusual ones, since it instantly and effortlessly transforms the buyer’s choice token into the seller’s preferred currency.
This has the potential to make it simple for people, other blockchain dApps, merchants, payment gateways, and decentralized funds to accept hundreds of different currencies, which may aid in the growth of the Ethereum network. Kyber, like Bancor, promises ‘instant liquidity.’ Still, it does it by paying commissions to users who contribute their idle coins to a liquidity pool rather than establishing ‘Smart Tokens’ that self-regulate.
0x (pronounced ‘zero-ex’) is open-source software built on smart contracts that allows anyone to create their own decentralized exchange. It plans to help other dApps and Ethereum projects that may benefit from such a service. It contains the ZRX Ethereum token, which developers developing on top of 0x may use to levy a transaction fee for their services.
For the most part, transactions are performed ‘off-chain,’ which means that they are resolved by smart contracts and only processed on the Ethereum blockchain when it is time for them to be paid. This, like IDEX, allows 0x to execute transactions faster than certain other decentralized exchanges.
Decentralized Apps in the Future
Although Bitcoin is often considered the original dApp, Ethereum has subsequently emerged as the main growth engine of the dApp ecosystem. This is due in significant part to its smart contracts, network impact, and user base. As the decentralized finance (DeFi) industry develops its use cases and acceptance, dApps provide an essential on-ramp to new audiences by deploying user interfaces that mimic traditional web apps while leveraging blockchain’s unique capabilities. In this manner, dApps are extending the functionality of the internet via blockchain in a variety of ways.
Regardless of the underlying blockchain in use, interest in dApps is rising quickly – and the movement is only getting started. As blockchain technology advances, banking, gaming, online marketplaces, and social networking will likely all become blockchain-based dApps.
The present ecosystem of blockchain dApps is undoubtedly in its early stages, but there are many reasons why many consumers choose these apps for incumbents in different industries. Getting ahead of current trends and providing consumers with a censorship-resistant platform protected by blockchain technology may undoubtedly help boost brand loyalty and take market share away from rivals who are too late to adapt.