The crypto space has introduced the world to a lot of interesting things including cryptocurrencies, blockchain, decentralized exchanges, DeFi, NFTs, and even DApps. While most people know about cryptocurrencies and blockchain; NFTs, DeFi, and DApps are the lesser-known crypto inventions.
Let’s take a closer look at look at DApps. What they are and why they’re important. We’ll also compare some of the popular DApps in the crypto space ETH, ADA, DOT, and SOL.
What Exactly is a DApp?
DApp stands for Decentralized Application and they are software applications that are built to run on a distributed network. As opposed to running on a centralized server like traditional everyday apps that people have on their phones, tablets, laptops, and desktops. The only major difference is that they operate on a decentralized network. In other words a blockchain.
Benefits of DApps
DApps stand out as crypto inventions that utilize the strength of blockchain and decentralization to provide many advantages over their traditional counterparts. Some of the advantages of DApps include;
Safety and Security
Decentralized applications are safer and more secure than traditional apps . This is because of decentralization and top-notch encryption. Decentralization eliminates traditional apps’ greatest weakness, a single point of failure.
Traditional apps are highly centralized. Centralization makes it easier for hackers to take advantage of system vulnerabilities and steal people’s data. Centralization is the main reason traditional apps face security beaches almost at a daily rate.
Besides decentralization, DApps also feature robust consensus mechanisms that make them resistant to malicious attacks. Immutability ensures no change can take place without all parties agreeing. DApps offer one of the best ways to secure data because of this.
Censorship is easy with centralized apps. Because traditional apps are centralized, there are people controlling and managing them who get to dictate a lot of things. Like how the apps should be used and who can have access to them and what data can be seen or shared.
Decentralized applications have no centralized dictator. The absence of an all-powerful and authoritarian corporation to govern the apps means they are completely resistant to censorship. Decentralization gives power back to the people. Users of DApps can get a say on how the apps can be used and their future developments.
Open-source means anyone can verify that a DApp does what it claims to do. This level of transparency gives people confidence and reassurance that a DApp will live up to its claims.
Open source also encourages faster and more secure development. Because the code is out there for everyone to see, more developers can chip in to help make it even more secure and efficient.
There’s a lot of Potential for DApps
Many people, businesses, and industries are seeing the growing potential of DApps and envisioning how they will reshape the business landscape.
Statistics show that in 2019, the DApps Market size was valued at $10.52 Billion. The market is expected to grow at a compound annual growth rate (CAGR) of 56.1% and reach a valuation of $368.25 Billion in 2027.
Ethereum continues to stand out as the go-to platform for DApp development, and for many reasons. Currently, the platform boasts more than 3,000 DApps with some popular ones grossing more than $1 million per year.
Ethereum Virtual Machine is one of the many reasons Ethereum continues to dominate the DApps market. EVM makes DApp development an easy process. It also suffers no downtime and is great for storing objects no one can modify.
The popularity of DApps has seen other networks crop up which gives developers the option to build on different platforms. Currently there are more than 15 DApp platforms in existence with more on the way.
The closest rivals to Ethereum include:
The popularity of DApps is expected to increase as more businesses and industries embrace blockchain technology. DApps are already being applied to industries including finance, entertainment, and gaming.
While there are no DApps currently in popular app stores like Android Play Store and Apple App store the future looks promising.
DeFi DApps are financial applications running on blockchain and offer owners of cryptocurrencies opportunities to carry out various financial transactions like lending, borrowing, saving, and investing. The apps offer what traditional financial systems offer but in a much better way.
Over the years DeFi DApps have become quite popular due to the many advantages they bring to the finance sector. One advantage of DeFi DApps is they make it easy for cryptocurrency holders to access financial instruments like credit and derivatives directly with their cryptocurrencies.
DApps in Entertainment
NFT marketplaces are offering artists and creators an avenue to benefit from their work without the need of third parties. NFTs like DeFi have become incredibly popular. NFT, which is short for Non-Fungible token, is a token that represents ownership of unique digital items.
NFTs can be items like art, music, collectibles, in-game items, audio, and video. The items live online and on a distributed ledger. Because of their unique properties, they cannot be exchanged for other things. Popular NFT Marketplace DApps include Rarible, Mintable, and OpenSea.
DApps in Gaming
The video game industry has benefited the most from DApps. DApps have revolutionized how games are played on computers and mobile phones.
NFTs and DeFi DApps have taken gaming to the next level. A game like Axie Infinity is giving players an opportunity to earn as they play. Players can earn SLPs which are in-game items that double as cryptocurrencies that can be bought and sold on a crypto exchange. Axies, real-estate, flowers, barrels, and flowers are other in-game items that can be sold as NFTs (Non-Fungible Tokens).
Other video games are giving participants opportunities to win their in-game cryptocurrencies. The cryptocurrencies can be won as rewards for achievements made in the game. The cryptocurrencies have “out of game” value, meaning they can be traded or exchanged for other cryptocurrencies like ETH and BTC.
Top Blockchains that Enable DApps
The popularity of DApps has given rise to several blockchains that enable their existence. Here are some of the top blockchains that enable DApps.
Launched in July 2015, Ethereum is still the go-to blockchain for DApp development. The network currently dominates DApp development, and for various reasons, which include highly skilled developers and the Ethereum Virtual Machine.
According to Stateofthedapps, there are currently 3,635 Dapps in existence. Of these 2,849 are on Ethereum. More than 80% of existing DApps are on the Ethereum platform.
The Ethereum Virtual Machine is a unique software system that allows developers to create smart contracts and DApps. Smart contracts are essential in creating DApps. EVM is designed to make it easy for developers to create and launch DApps. This is one of the many reasons many developers like Ethereum. EVM also doesn’t suffer from any downtime.
As of February 2021, according to the Crypto tracker app, over 3,000 decentralized apps are running on the Ethereum blockchain. Some top Ethereum Dapps include OpenSea, UniSwap, Rarible, Curve, Flexa, and SushiSwap.
Launched in 2017, Cardano is a proof of stake blockchain that recently joined the growing number of blockchains that enable DApps. The blockchain was created by one of the co-founders of Ethereum so it shares many similarities to Ethereum.
From its early days, Cardano was designed to support smart contract technology. Smart contract technology would enable the support of decentralized apps.
Cardano’s design to support smart contracts was intentional because the network’s main use case is to allow transactions in its native currency ADA and enable developers to build DApps powered by it.
On September 1st, 2021 Cardano launched smart contract functionality. A few days later MinSwap, Cardano’s first DApp was launched on the Alonzo testnet. Besides the excitement, the DApp came under heavy criticism for its functionality and trading limits from ETHhub founder Anthony Sassano.
Cardano is fairly young in the DApp space. The blockchain just recently launched smart contract functionality, with its upgrade expected on 12th September 2021. The first DApp on the network has already had its fair share of criticism. Going forward better and more DApps are to be expected.
Launched in May 2020, Polkadot is a Proof of Authority network that allows different blockchains to communicate with each other. It is termed the blockchain of blockchains.
The blockchain aims to connect different specialized blockchains into a single unified network. DApp developers looking to reach a wider audience from different blockchains have a way out with Polkadot.
It is worth noting that Polkadot was built by Parity, a company founded by Ethereum co-founder Dr. Gavin Wood and former Ethereum Foundation Head of Security Dr.Jutta Steiner.
Polkadot features several smart contract platforms for DApp development. Some of the smart contract platforms include Clover, an EVM-compatible DeFi service platform, PolkaFoundry, another EVM-compatible smart contract platform, Plasma Network, a multi-virtual machine smart contract platform, and Moonbeam among others.
Polkadot is proving a great place for DApp development. Some of the DApps on the Polkadot network include Ren, Mantra DAO, LocalCoinSwap, Polkastarter, and PolkaSwap.
Launched in April 2020, Solana is a Delegated Proof of Stake and Proof of History network that helps developers and institutions develop decentralized applications and marketplaces. Solana stands out as a faster blockchain, boasting 50,000 transactions per second with cheaper transaction fees, less than $0.1.
In addition to faster transaction speeds and lower fees, many people are attracted to Solana due to its high level of scalability and impressive security. One potential downside, it is not as decentralized as other DApp platforms but this could change as more developers adopt the platform.
According to Solana’s official website, on the Ecosystem tab, there are currently three DApps on the network, Aphid, MetaSafari, and Solcery, a decentralized games hub that allows users to create, publish and play blockchain games in one place.
Besides DApps, Solana features more than 80 apps that include SolDate, a decentralized dating platform, Phantasia, a fantasy sports platform, Jabber, a decentralized and secure messenger, and NFT Solar, a social NFT platform leveraging metaplex protocol.
Binance Smart Chain (BSC)
Launched in September 2020, Binance Smart Chain is a parallel blockchain to the Binance Chain, another blockchain project initiated by Binancein 2019.
Binance Chain and Binance Smart Chain are two different blockchains with different consensus mechanisms and functions. The Binance Chain was built to provide a marketplace for decentralized issuing and exchanging of digital assets while the Binance Smart Chain was built for DApp development using Smart contracts.
Besides their differences both blockchains use BNB tokens as their native tokens. Transactions fees are also paid in BNB tokens for both blockchains.
Binance Smart Chain allows cross-chain communication with the Binance Chain using Proof of Staked Authority (PoSA), which is a combination of Proof of Authority (PoA) and Delegated Proof of Stake (DPoS).
According to DappRadar, some of the top Binance Smart Chain Dapps include Cryptocanvas, CryptoBay, ApeSwap, CryptoBlades, Biswap, and PancakeSwap.
Ethereum, Cardano, Solana, Polkadot, and Binance Smart Chain are all great DApp development networks. Each has their advantages and disadvantages.
Ethereum stands out as the platform with the most DApps largely because it’s been around for the longest. Almost 80% of all DApps in existence are on the Ethereum network.
With Ethereum 2.0 on the way, things might just get even better for Ethereum. The major upgrade will see Ethereum switch from Proof of Work (PoW) consensus algorithm to Proof of Stake (PoS), which can help with scalability. The upgrade will also bring about greater security and sustainability of Ethereum.
But as of this writing, Ethereum continues to struggle with congestion and high fees, and developers continue to look for alternatives, Solana proves a one very good option.
Solana gained a lot of momentum in 2021 and it stands out as a blockchain offering fast transaction speeds and low fees. The network also boasts over 400 projects including various Decentralized Finance applications. Solana has a bright future according to many developers and investors.
Cardano provides a much cheaper platform for DApp development but based on its first DApp launch it has a ways to go.
MinSwap, Cardano’s first DApp was heavily criticized for being fundamentally flawed by Anthony Sassano, an Ethereum proponent. According to one of the screenshots posted by Sassano on Twitter, one MinSwap user encountered a transaction error while trying to swap tokens.
Ethereum has its shortcomings. But, many developers still prefer it to other DApp development platforms. Other DApp development platforms borrow a lot from Ethereum, which also helps sell it as the go-to platform for DApp development.