Overview of Decentralized Applications (DApps)

Sep 20, 2024

Notes on Decentralized Applications (DApps)

Introduction to DApps

  • DApps (Decentralized Applications) are similar to regular applications like Facebook, Instagram, etc.
  • Instead of reporting back to company servers, they interact with the blockchain.

Benefits of DApps

  1. Built on Smart Contract Networks
    • DApps can only be developed on networks that support smart contracts (e.g., Ethereum).
    • Bitcoin cannot utilize DApps as it is not designed for executing smart contracts.
  2. Open Source
    • The code for DApps is publicly available, allowing for transparency and trust.
    • Users can verify how the application works.
  3. Censorship Resistant
    • DApps are not controlled by governments or corporations.
    • Once a smart contract is executed, it cannot be stopped.
  4. Always Online
    • DApps run on a distributed network of computers, making them less susceptible to outages.
    • Unlike centralized apps that can be taken offline, DApps are more resilient.

Types of DApps

1. Financial DApps (DeFi)

  • Borrowing and Lending: e.g., Aave allows users to deposit tokens to earn interest and borrow against collateral.
  • Providing Liquidity: Investors can contribute tokens to liquidity pools, earning fees from trades.
  • Exchanges (DEXs): Decentralized exchanges allow users to trade tokens with low fees and no verification.

2. Game DApps

  • CryptoKitties: A game where users collect and breed virtual cats (NFTs); can be bought/sold.
  • Zed Run: A virtual horse racing game based on NFTs.
  • Blockchain Gambling: Various gambling games exist as DApps, including poker and slots.

3. Tracking Apps

  • Zapperfy: A tool for aggregating wallet information and tracking assets across different networks.

4. Marketplaces

  • CryptoKitties: Functions as both a game and marketplace for trading NFTs.
  • Wearable: A marketplace for buying/selling NFT art.
  • Bedali: Allows purchases using crypto, including anonymous gift card transactions.

5. Educational DApps

  • Development of a new platform with quizzes, videos, and articles that integrates with wallets for earning experience points.

Additional DApp Example

  • ENS (Ethereum Name Service): Translates long Ethereum addresses into readable names (e.g. whiteboardcrypto.eth).

Conclusion

  • The space for DApps is rapidly evolving with new applications being developed.
  • Blockchain developers are in high demand due to a shortage of skilled programmers in the field.
  • The potential for growth and innovation in this sector is significant.