What is a DApp (Decentralized Application)?

You might hear of decentralized applications or DApp used to create social media, finance, gaming, or web browsing apps. They work similarly to usual applications, and their interface is the same as the regular ones. But the difference is that a single server does not control DApps. With this, it will be harder for anyone to restrict access and control decentralized applications.

Here’s everything you need to know about DApps.

An Introduction to DApps

In its most basic sense, a DApp is any computer application that operates through a network of computer nodes. They are digital programs that run using blockchain or P2P computer networks. The name itself means that no single authority controls the application. Being decentralized, DApps are free from a single command interference, making them more resistant to censorship and corruption.

To understand it further, think of Twitter. It operates on a computer system owned by an organization that fully controls its functions. Although one or more users can enjoy the application, it is still controlled by one group. Meanwhile, applications like BitTorrent or Popcorn Time run on computers as part of a P2P network where multiple users consume and feed content.

But not all decentralized applications work on web browsers because some sites might need a customized code to open a certain application.

All changes happening in DApps are applied depending on the users’ consensus. A codebase is needed for the users to evaluate and come up with a decision. Decentralized blocks hold the data and are validated first.

How do decentralized applications work?

Similarly to traditional applications, a DApp uses front-end code in rendering a web page. But when it comes to the back-end code, DApps may be different, and this code makes them free from control. A smart contract protected in a blockchain supports a DApp, and Ethereum is the most used blockchain that runs smart contracts.

The blockchain in which a smart contract operates compiles data records in blocks and spreads them across different locations. The blocks then undergo cryptographic validation.

Aside from supporting DApps, smart contracts mediate the transactions. They are just a small part of a DApp as they only consist of back-end code. However, building a complete product may require combining several contracts and using third-party systems to create the front-end.

The Benefits of Decentralized Applications

Blockchain technology has spread across the Internet, and its industry value has grown sharply in recent years. Businesses should look closer at this technology to see how they can use it to their advantage.

Here are the main benefits offered by DApps:

1. A decentralized application is open-source. Developments in the application’s ecosystem can therefore happen faster and with more transparency.
2. DApps can protect user privacy because users are not required to submit personal information to use them.
3. There are no downtime limitations for users because DApps run on P2P networks.

What makes DApps special is that there is no central or single point of failure. Nodes are independent: a single failing node does not affect the other ones in the system.

Popular DApp Platforms

Aside from Ethereum, there are many other options for DApp platforms available, like Polkadot, Telos, and Polygon.

First, Polkadot was created by one of Ethereum’s co-founders, Gavin Wood. It is a platform for building several DApps, making it more convenient to link with decentralized services and institutions. It aims to address scalability, a long-standing challenge for blockchain technology, by connecting private and public networks.

Another example is Telos, a third-generation platform. It does not charge transaction fees, which keeps applications fast and scalable. It is used in social media, DeFi, and gaming, and offers advanced on-chain voting features.

Polygon is another option that lets developers spend less on Ethereum fees. It is used by many DeFi protocols and uses powerful sidechain technology, so users can enjoy faster and cheaper transactions for their trades.

Examples of Successful DApps

With the rise of decentralized applications, many of them are now considered successful. Some of the best-known examples are below.

Uniswap

Uniswap is one of the largest decentralized exchanges built on Ethereum, processing billions of dollars in monthly trading volume. The platform has continued to evolve, with newer versions reducing trading costs and adding flexibility for liquidity providers.

Bancor

Bancor is one of the earliest decentralized exchange protocols, allowing users to trade cryptocurrencies and earn rewards on their holdings without going through a centralized exchange or registering for an account. It offers features such as single-sided staking and impermanent loss protection.

OpenSea

OpenSea was launched in 2017 and helped bring NFT trading to a mainstream audience. It was first built on Ethereum and later added Polygon for cheaper transactions. While newer marketplaces have since taken market share, OpenSea remains one of the most established places to browse and trade NFTs.