What is a dApp? Everything You Need to Know About dApps and Real Market Examples
Here’s how dApps are constructed, built and utilized on the market. Learn about the technology behind dApps and look through a few of the most notable examples.
The latest breakthrough technological advances have made it possible for developers to create new kinds of products. One that is especially promising is the introduction of decentralized applications (dApp), which are heavily reliant on blockchains and crypto.
At its core, each dApp combines a smart contract (a backend) and a frontend user interface. dApps are built by utilizing fully transparent codes governed by autonomy, and a specific consensus algorithm to back up their value (e.g. Proof-of-Stake or Proof-of-Work).
Most applications we use in our day-to-day life are centralized. This means that everything contained and posted on the app, including its database, is owned and controlled by a single — centralized — entity. Some of the centralized apps examples are Instagram, Facebook, Twitter, etc. dApps are fundamentally different in their structure.
N.B. Check out Getblock’s guide on how to build a dApp
As mentioned above, dApps are centered around blockchains with smart contract support. A smart contract is essentially a self-executing program stored on a blockchain, which contains an agreement between the seller and the buyer in the form of a specific code. Blockchains, which offer smart contract support, provide efficient and censorship-resistant solutions for dApp developers.
Now that we have established the foundation for what dApps are, let’s take a quick look at some of the most notable examples. According to data provided by [State Of The dApps], there are currently 4,073 dApps available, and the number is growing at a rapid speed.
As there are many different categories of dApps, DeFi (Decentralized Finance) is arguably among the top three. Being an alternative to regular financial institutions, e.g. banks, DeFi protocols focus on delivering full transparency to users. Moreover, these types of projects are non-custodial, meaning the server does not own or control any of the stored assets. DeFi applications are built on blockchains, such as Ethereum, Binance, Cosmos, etc.
Aave, yEarn, and Compound are some of the examples of DeFi projects that allow users to borrow and lend cryptocurrency. By utilizing these types of apps users do not have to refer to a mediator in order to, let’s say, calculate interest rates and lend tokens.
DeFi includes decentralized exchanges (or DEXs), which offer fully transparent P2P exchanges. DEXs allow users to instantly convert crypto, access trading pairs and so much more. Besides, they work internationally, are highly secured and anonymous.
One of the first crypto exchanges launched back in November 2018, UniSwap is an Ethereum-based DEX. 2020’s PancakeSwap is built on the BNB Chain (Check out GetBlock’s guide on how to use PancakeSwap here). Some other examples include Kyber Network, 0x, SushiSwap, QuickSwap, etc.
GameFi (or Play-to-Earn) is the type of protocol that integrates blockchain technology and DeFi. Essentially, all players get the chance to make a profit by battling with other gamers and/or completing assignments. GameFi also heavily relies on utilizing NFTs, given that in-game assets are sold and exchanged in the form of a non-fungible token in most cases. For some games it is also possible to earn passive income by letting other players borrow your assets, or by staking. Axie Infinity, The Sandbox, Cryptokitties, Zed Run are only a few of the big names in the GameFi field.
With the rise of various blockchain projects, users have found themselves in need of a place to showcase and utilize their creations. Marketplaces are not only popular with NFTs, but they also help attract new investors, therefore paving the ground for further mass adoption. According to dappradar.com, some of the most popular dApp marketplaces include Magic Eden, OpenSea, AtomicMarket, Axie Marketplace, etc.