According to DappRadar’s Q1 2022 report, the decentralized app industry registered 2.38 million daily Unique Active Wallets connected to blockchain dapps on average. The number of users engaging in decentralized applications every day surged 396% year-over-year to 2.4 million.
These decentralized apps or dApps run on the blockchain in the form of smart contracts and represent a new era in the world of application development. Let’s see what makes dApps so special.
It’s all about the characteristics
Decentralized applications run on blockchains that support smart contracts. Compared to traditional apps, a dApp code is not stored on a company’s centralized server but is a part of the decentralized peer-to-peer network called the blockchain.
Decentralized apps that run on the peer-to-peer network don’t have a specific owner like traditional applications do. In fact, they are owned by everyone and stored on hundreds of computers running the blockchain.
dApps are built on open-source code, meaning developers can use any part of their code, edit or upgrade it and create new solutions.
They are censorship resistant — nobody can remove any part of them because they don’t like the idea or tone of it. They are controlled by the logic written into the smart contract, not an individual or a company.
Since dApps run on blockchain they never really stop functioning. While applications like Facebook can experience downtime due to bugs, power outages, or other factors, dApps continue to work in the backend even if their frontend experiences issues — in theory, hundreds of computers from all over the world would need to go down for a dApp to stop working completely.
Where can we use dApps?
dApps development is still in its early stages. They are mainly used in DeFi platforms, but we can also find them in arts, gaming, technology, insurance, education, and other sectors.
Decentralized finances or DeFi offer financial services, where investors can borrow or lend tokens, provide liquidity, or swap their crypto assets without any intermediary. All of these platforms or individual services are actually decentralized applications. Crypto wallets are dApps too. They are all modular and compatible with other chains that support smart contracts, giving developers infinite possibilities for creating new DeFi solutions.
Some of the most popular DeFi dApps worth mentioning are Uniswap, PancakeSwap, 1inch Network, and others.
Gaming dApps rank high in popularity as well. They are interconnected to DeFi services as they often incorporate a certain aspect of earn-to-play incentives. Researches show that decentralized applications or gaming applications contributed to more than half of the blockchain industry’s activity at the beginning of this year.
According to DappRadar, some of the most trending gaming dApps are Alien Worlds, Splinterlands, Axie Infinity. The list is long and very interesting.
What are the downsides
Since dApps run on smart contracts, any potential bug cannot simply be modified. Instead of editing the current version, a new smart contract must be deployed to correct the identified issues.
Decentralized applications have some scalability issues as well as they require significant computations to provide the required level of security, integrity, transparency, and reliability. These can overload a network, causing network congestion.
While traditional apps have elaborate user-friendly interfaces, dApps are still trying to achieve a level of user experience that could rival current popular and established applications. To achieve these levels, they sometimes use frontend services that may store keys or other sensitive information on a centralized server, which in turn makes them centralized in part. While this contributes to the overall user experience, it eliminates many advantages of the blockchain.
Looking into the future
dApps might be hard to spot on a list of other centralized apps. But behind the scenes, they have some special qualities because they inherit all of Ethereum’s superpowers. The development of decentralized applications has merely begun and the possibilities that the decentralized future brings are truly endless. Developers of dApps are already one of the most sought occupations across the globe because not many individuals possess a profound knowledge of the blockchain technology. One thing is for sure, the GoCrypto team will be closely following the advancements in dApps, as we strongly believe that the future lies in decentralization.
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