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Natsune Oki on What is DAPP & how they are different from apps

When we spoke about what Web 3 is, we already covered basic ideas about what different words mean including dApp. In that blog post, let’s talk about what it is in a more detailed manner.

What is dApp?

dApp is a short form for decentralized application. As the word suggests, dApps are not owned by a single company or a person. dApps run on blockchain networks like Ethereum with a code called smart contract that provides logic for the function of the app. On a blockchain network like Ethereum, codes inside of these smart contracts are viewable by anyone ( like open API ), this is not the case for traditional apps where codes belong to their owner company and are normally classified as private information, that any developer builds new services on already existing smart contract that were written by someone else.

Some of the features of dApps include:

  1. Smart contract automation: Smart contracts contain coded protocol that they strictly follow so there is no need for humans to intervene. For example, a developer can tell an NFT exchange dApp that uses a smart contract, to only release an NFT if a buyer pays the seller.

  2. Code is viewable by the public: No one company can be in control of data in a given dApp, or what rules users must follow in the dApp. To make it more easy to understand with traditional apps, Facebook has access to our data and the company can use this data, or TikTok has a community guideline setup according to their standards. With dApps neither of the previous statements are true. Data is owned by users, and rules are not set by one single “hosting” company.

  3. dApps do not have to respond to the government or a single large corporation: If a smart contract is coded to execute a certain action, it executes it regardless of who is in the effect. A smart contract doesn’t choose who lives under its rules. To make this easier to understand, large social media companies may have to ban or censor certain people based on their political views or opinions as a result of political conflicts, with dApps, since there is no one central authority, this would not happen - unless it’s written to do so in the code.

  4. dApps never go to sleep: traditional apps typically need some time for maintenance, or they could also accidentally go down, or the app could be shut down if the government for any reason goes to the company who runs it to tell them to do so. dApps however, never go offline. Since the system doesn’t rely on one single entity, - rather they are run across hundreds of computers all across the world by blockchain miners, it can not be shut down.

How are dApps different from traditional apps?

  • Financial transaction capability: dApps doesn’t need third party apps like PayPal or banking apps to make payments happen between one user to another. dApps can hold cryptocurrency from payer and send a payment to the receiver following logic written in the smart contracts.

  • Communication capability: dApps that are built on the same network such as Ethereum, communicate with each other more smoothly than transitional apps do. There is a higher level of synergy and collaboration ability so that developers can build off of each other.

  • Blockchain faces scalability issues, meaning that dApps that use blockchain, may face problems processing large numbers of transactions at once. However, solutions are being built around this issue ongoingly.

  • Apps are free dApps are not. Traditional apps are normally free to use. On the other hand, end-users need to pay a small amount of fee for their transactions to be recorded in the blockchain called a gas fee - since mining and recording data takes massive amounts of computing power.

What are dApps used for?

dApps are often used for gaming apps and financial service apps. Here are two websites I found that track 'hot dApps' by ranking. ( )

One example dApps in gaming would be Decentraland

Decentraland is a virtual reality platform powered by the Ethereum blockchain. Users can create, experience, and monetize content and applications

Another example from a finance app can be AAVE

Aave protocol is a decentralized, open-source, and non-custodial money market protocol. Depositors earn interest by providing liquidity to lending pools, while borrowers can obtain loans by tapping into these pools in both an overcollateralized or undercollateralized fashion. Aave protocol is unique in that it tokenizes deposits as tokens that accrue interest in real-time. It also features access to highly innovative flash loans, which let developers borrow instantly and easily; no collateral is needed. With 16 different assets, 5 of which are stablecoins, Aave protocol is the most diverse lending pool in the Ethereum ecosystem.

So in short, this platform allows people to lend their crypto assets and earn interest.

Today we talked about what dApps are and how they are different from the traditional apps, and finally some example dApps. Do you have any additional question? Let me know in the comments!


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