DApps in blockchain have made it possible to create distributed business models on a blockchain. Decentralized apps (DApps) are unique applications found only on certain decentralized blockchain networks. Decentralized applications have specific characteristics, and developers need to follow certain practices to develop blockchain DApps. Several decentralized apps have made a name for themselves, however, there are a few limitations too.
What are decentralized apps?
DApps in blockchain are quite similar to a web or mobile app. Their front-end is like that of centralized apps, however, their back-end consists of smart contracts. Most decentralized applications are built on the Ethereum network, a popular decentralized blockchain.
Smart contracts: What they are
A smart contract is a piece of code that contains “If-Then-Else” statements. Smart contracts have open-source code. They transfer cryptographic assets based on predefined conditions. Smart contracts are autonomous.
They are stored on a decentralized blockchain, and they have their own blockchain addresses. Smart contracts are immutable. You can’t modify a smart contract after you deploy it.
The execution result of a smart contract is stored on a decentralized blockchain. Their execution is irreversible.
Key characteristics of DApps
DApps have the following key characteristics:
- You can develop their front-end using technologies used for developing traditional web applications or mobile applications. Therefore, you can develop the user interface of a web-based DApp using Angular or similar front-end technologies. You can use Java or Kotlin for developing user interfaces of Android-based DApps. Similarly, you can use Swift or Objective-C for an iOS-based DApp.
- DApps have open-source code.
- A DApp must run on an underlying blockchain network. Such a blockchain network must be a decentralized network.
- The back-end of a DApp must consist of smart contracts that run on decentralized blockchain networks.
- You need the majority consensus of the users of a DApp before you can make any change to it.
- DApps process transactions using a decentralized blockchain.
- Decentralized apps use a decentralized blockchain for data storage, and they use cryptographic standards for this.
- DApp must have cryptographic tokens. Decentralized application developers must use established cryptographic standards to create these cryptographic tokens.
- No one user of a DApp can have the majority of the cryptographic tokens.
The Ethereum blockchain development platform: A popular platform to create DApps
There are a few blockchain development platforms to create DApps, however, the vast majority of DApp developers use the Ethereum blockchain development platform. The reasons are as follows:
Ethereum is as secure as Bitcoin, the most famous blockchain network. It uses a peer-to-peer (P2P) network where every user has equal access. No central authority manages Ethereum, and no centralized entity can compromise the network.
Ethereum transactions are protected by security features like digital signatures, cryptographic hash functions, data encryption, and the “Proof of Work” (POW) consensus mechanism. Hackers find it cost-prohibitive to tamper with data on the Ethereum blockchain.
2. Development tools
The Ethereum blockchain development ecosystem provides useful development tools. The following are a few examples:
- EVM (Ethereum Virtual Machine), the runtime environment to execute smart contracts and DApps;
- Ethereum crypto token standards like ERC-20 and ERC-721 for creating cryptographic tokens;
- Programming languages like Solidity and Vyper for smart contract development;
- Remix, an IDE for smart contract development;
- MetaMask, a software wallet used for Ethereum blockchain development;
- The Truffle Suite of Ethereum development tools;
- Ropsten, a test network to test smart contracts.
3. Ethereum development guides
The Ethereum project team provides extensive Ethereum development tutorials. Other industry experts and experienced developers also provide many Ethereum development guides.
Examples of DApps
As a glance through DappRadar demonstrates, there are many DApps. The following are a few areas where DApps have already made their mark:
Blockchain-based games involving NFTs (Non-Fungible Tokens)
Several DApp games have become popular. Many of them enable players to collect and trade digital assets. These digital assets could be trading cards or characters in the game.
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The Ethereum platform offers an effective way to tokenize unique entities. Developers create NFTs to tokenize unique digital assets. NFTs are cryptographic tokens, however, they are different from Bitcoin or Ether. NFTs are unique and indivisible. That makes them ideal for tokenizing unique digital assets. CryptoKitties and Axie Infinity are two well-known DApp games involving NFTs.
Decentralized credit services that help borrowers get loans easily
Traditional banks and financial institutions have complex processes to approve loans, therefore, many people can’t get loans from there. DApps like Aave use distributed ledger technologies to bring lenders and borrowers together.
This Ethereum-based DApp makes the lending process simpler. Deserving borrowers can get loans, whereas lenders earn interests. Decentralized crypto lending platforms are examples of the DeFi (Decentralized Finance) apps.
DEXs (Decentralized Exchanges) for crypto-traders
DEXs are DApps, and they are DeFi apps too. Centralized crypto exchanges are well-known. They go against decentralization though, and decentralization is a key promise of blockchain. Hackers routinely target the centralized networks of these crypto exchanges.
A DEX (Decentralized Exchange) is a DApp that enables users to directly interact with other crypto traders. They can trade without intermediaries. Uniswap is a well-known DEX.
You can develop DApps using the TRON protocol, which uses the “Proof of Stake” consensus mechanism. EOS is another option. However, Ethereum is the most popular blockchain network for developing DApps. The Ethereum blockchain platform offers excellent DApp development tools.
CryptoKitties was the first DApp game built on the Ethereum blockchain platform. It was launched in November 2017. The game involves trading digital kittens, which are non-fungible tokens (NFTs). CryptoKitties became viral quickly, and it even caused network congestion.
The most popular Ethereum DApps are Axie Infinity, Uniswap, Uniswap V3, ShibaSwap, and OpenSea. Axie Infinity is an NFT-based game. Uniswap, Uniswap V3, and ShibaSwap are DeFi apps. OpenSea is an NFT marketplace.