What are Decentralized Apps (Dapps)?
Decentralized applications, or dapps, are a radical new way of building applications, using blockchain to do away with centralized middlemen.
It’s time to cut out the middleman. Why pay for a company to provide a ride-sharing service when you could use an app that connects drivers directly with riders and doesn’t take a cut? That’s the promise being offered by dapps, or decentralized apps.
What is a dapp (decentralized application)?
Dapps are decentralized apps. They are like normal apps, and offer similar functions, but the key difference is that they are run on a peer-to-peer network, such as a blockchain, using smart contracts.
As dapps are decentralized, they can’t be controlled by a single person or entity.
Dapps also often have the following features:
- 🖧 They are open-source and operate on their own without anyone entity controlling them.
- 🔍 Their data and records are public.
- 🟡 They use a cryptographic token to help keep their network secure.
While many in the blockchain and crypto community believe that dapps should have all of these features, as the industry has matured, there are dapps that use some, a combination of, or none of the above.
What are the benefits of dapps?
Dapps have several exciting aspects:
- Censorship-resistant - With no single point of failure, it’s very difficult for governments or powerful individuals to control the network.
- No downtime - Relying on a peer-to-peer system ensures that the dapps continue to work even if individual computers or parts of the network go down.
- Blockchain-based - As they are made using smart contracts, they can easily integrate cryptocurrencies into the basic functionalities of the dapp.
- Open-source - Open-source dapps encourage the widespread development of the dapp ecosystem and enable developers to build better dapps with more useful or interesting functions.
Did you know?
Dapps are decentralized apps. They are like normal apps, and offer similar functions,
but the key difference is that they are run on a peer-to-peer network, such as a blockchain.
What are the weaknesses of dapps?
While dapps promise to solve a lot of the problems faced by regular apps, there are also some disadvantages.
- Hacks - As many dapps are run on open-source smart contracts, hackers have the opportunity to review code and probe the networks looking for weaknesses. This has led to a spate of hacks on popular dapps.
- Usability - A lot of dapps have poor user interfaces, something that has drive many users away. You can read all our reviews on these services on our reviews page. However, this is something that’s improving as time goes on.
- Users - As with many Web 2.0 apps, the more users a dapp has, the more effective the network is at delivering those services. This is often referred to as the network effect. Dapps struggle from low user numbers, which can make them less interactive. It can also make them less secure, as a dapp’s security is often dependent on user numbers.
Some popular DApps
- 🦄 Uniswap - A decentralized exchange that enables users to swap tokens peer-to-peer rather than through a centralized intermediary.
- 💰 Compound - A DeFi lending protocol.
- 🎰 PoolTogether - A “no-loss” crypto lottery.
- 🎧 Audius - A decentralized music streaming platform.
- 🎮 Decentraland - A metaverse platform in which users can interact as avatars, and buy NFTs representing virtual objects or land.
- 🧜♂️ Gods Unchained - An NFT-powered card game.
- 💲 MakerDAO - A smart contract that enables users to interact with the Dai stablecoin system.
- 👀 LooksRare -An NFT marketplace that rewards users for participating.
The future of dapps
Dapps are still in their early stages. However, there are already thousands of dapps that offer myriad services, be it playing games, investing in DeFi, or trading NFTs.
By Q1 of 2022, there were almost 2.4 million daily active users of dapps. But there’s still a long way to go. Before dapps reach the mainstream, developers and the networks on which they build dapps have a long list of challenges to work through, including scalability, security, and UX.