Decentralized Applications Explained – What are dApps?

If you’ve worked with blockchain, odds are that you’ve heard of dApps. Decentralized applications, which are more commonly known as “dApps”, are essentially applications for Web3. As returning Moralis users will know, Web3 is the emerging version of the web that relies on decentralization and blockchain technology. Seeing as smart contract-driven decentralized applications are at the very core of Web3, it is worth answering the questions “what are dApps?”.

Even though dApps and Web3 are nearly universally seen as the future of applications and the Internet, there are challenges. Specifically, traditional dApp development takes time, resources, expertise, and money. Specifically, this is where Moralis comes in. Moralis provides a backend infrastructure that effortlessly bridges the gap between Web3 functionality and the ease of Web2 development. This is why Moralis is known as the premier blockchain middleware – taking care of everything that happens between the dApp and the blockchain.

To drive the adoption of dApps, platforms like Moralis dApps enable developers to build dApps quickly and easily. Read on to find out why dApps will soon permeate every corner of our online lives. You’ll learn what dApps are, how they compare with Apps, and where developers congregate to build them!   

What are dApps?

So, let us start with the basics – what are dApps? Essentially, dApps are normal applications that come complete with blockchain and Web3 functionality. If you’ve heard about dApps, DeFi, blockchain or crypto, all of this relates to the massively growing interest in dApps. Developers and startup teams build decentralized applications, on distributed, peer-to-peer (P2P) blockchain networks. They use many of the same computer languages as Web2 apps and can often perform the same functions. However, because dApps can run on blockchain-based P2P networks, no one person has central control of the dApp. Additionally, the code for dApps is open source, shareable, and stackable, leading the way for more developers to begin building. 

Decentralized applications are oftentimes token-based, meaning they use a cryptographic token issued off a blockchain for all transactions made using the dApp. For each dApp, any transactions that occur while using it are publicly available on a blockchain explorer, providing a transparent internal economy. To further explain what a dApp is, it’s helpful to view them in comparison to Web2 apps, which we all use every day.

dApps vs Apps

It’s hard to overstate the original importance of Web2 applications, or “apps”. Web2 applications brought the Internet into the cloud, and was an integral part of the social media revolution. However, whereas Web2 apps brought the Internet from Web1’s static state, into the dynamic web we know today, Web3 apps (or dApps for short) promises to do even more. Web3 applications, or dApps, connect us to blockchain networks, giving them the following characteristics:

  • Connected to the financial infrastructure for digital assets and tokens
  • Decentralized, with computing power spread across many “nodes”
  • Able to provide immutable, transparent systems of accounting and transactions
  • Rely on smart contracts to “automate” their functtions 
  • Censorship-resistant applications

Review these bullet points carefully, as Web2 apps simply do not provide the amazing features that blockchains enable. The dApps going live today still connect people from all over the world in real-time for all sorts of reasons. But they also have a native economy that breaks away from the many problems of traditional finance and business today.

As they are an important pathway to Web3, dApps are emblematic of the next massive technological leap. To get an idea of the different types of Web2 apps and their dApp counterparts, check out the chart below which provides some examples:

dApps explained

Now that you have a good idea about the differences between Apps and dApps, let’s dig a little deeper into decentralized applications.

Find out why 5000+ blockchain projects are building dApps using Moralis!

The backend code for dApps runs on decentralized peer-to-peer (P2P) networks, unlike centralized servers. Moreover, they provide safety from censorship, as well as protection from hacks. However, where they shine is through their ability to have an internal token economy. A dApp can use tokens for many reasons, including:

  • As a platform token used for all transactions
  • For incentivization for user growth, adoption, and marketing initiatives
  • As a governance token, allowing users to vote on proposals to improve the dApp
  • For security tokens that trade on the open crypto markets

Web2 applications easily connect to the traditional banking infrastructure, which settles once a day and includes multiple third parties. Web2 dApps use the tokenized blockchain system, which settles instantly 24/7 without the need to trust any third parties.

Developers who are building dApps do not have to build their own backend. That is because they have access to Infrastructure as a Service (IaaS) platforms like Moralis, which offers countless dApp building tools. 

Now that you understand the premise of dApps, let’s take a look at the blockchain networks where developers are building.

Decentralized applications on Ethereum 

Ethereum is a blockchain with its Ether token, and is the most popular platform for building dApps. In fact, for many, Ethereum dApps are nearly synonymous with the concept of dApps. Developers can create and deploy dApps on the Ethereum platform and even issue an Ethereum-based token for use in their applications. These dApps live on the Ethereum blockchain and use the ETH token (ether) as “gas” to fuel the transactions.

An integral part of Ethereum, known as the Ethereum Virtual Machine (EVM), is widely distributed across many nodes (computers). Ethereum enables developers to create and run smart contracts over a decentralized network to bring life to their dApps. 

What is a Smart Contract?

A smart contract is a type of contract that is made up of computer code and operates on a blockchain according to its predetermined programming. Developers generally build smart contracts using the main programming language for Ethereum, Solidity. Instead of being a contractual agreement that is enforced by two parties and various intermediaries, smart contracts are self-enforcing and don’t need a 3rd party. 

Once a smart contract deploys, it is not possible to change it. So it is essential to put a lot of thought into its creation, have the ability to test it out before going live, and have access to reputable smart contract auditors. Because the control of smart contracts comes from code and not any individual or corporation, smart contracts enable developers to build decentralized applications. 

 

Ethereum’s platform for building dApps provides the world with open access to a new token-based financial system that is transparent, non-discriminatory, and available 24/7 to anyone with an Internet device.

Visit Moralis to start building Ethereum dApps for Web3 quickly and easily!

Examples of Ethereum dApps

Multiple industries are seeing rapid development in Ethereum dApps. Many of them, but not all, are finance-related. Here’s a shortlist of industry types, each with an example:

  • Lending/Borrowing – Aave
  • Token swaps/Liquidity providing – Uniswap
  • Trading – Loopring
  • Prediction markets – Augur
  • Investments – Tokensets
  • Payments – Tornado Cash
  • Crowdfunding – Gitcoin
  • Insurance – Nexus Mutual

While there are more than a dozen other blockchain platforms for building dApps, most have been built on Ethereum at this point. But other blockchains are emerging to add additional, viable building blocks for decentralized applications.

Which Blockchain has the most dApps?

There are a growing number of blockchains for developers to use in building dApps. This is why Moralis is built to be cross-chain compatible from the ground up. Moralis features full support for connecting to Ethereum nodes, along with a long list of other networks’ nodes. According to the following statistic from State of the dApps, Ethereum has seen more dApp building than all its competitors combined (outside of BSC) at the moment of writing.

As with all things crypto, the pace of dApp innovation grows with every passing day. Perhaps most notably, Moralis is supercharging the development of Web3 apps and dApps. In this section, we’ll review some of the new and up-and-coming blockchain platforms for building dApps. 

Binance Smart Chain (BSC)

BSC is another blockchain platform for building decentralized applications. Since they are a cross-chain project, many Ethereum dApps (and some from other blockchains) may “bridge” to BSC for additional functionalities and interoperability. 

When developers create BSC dApps they enjoy high performance, lower costs, and cross-chain compatibility with other blockchain networks. Generally, building on BSC is becoming popular due to the high gas fees and network congestion when using the Ethereum Network. These problems end up being inhibitive to builders as well as their users and investors. A slow network and costly network fees can put a damper on decentralized apps, especially those that involve many transactions. 

Ethereum 2.0 is now under development to theoretically solve these issues. Meanwhile, Binance Smart Chain is growing as a viable alternative. They are currently advertising their platform’s penchant for “game-fi” applications:

Polygon 

Formerly known as MATIC, Polygon is a dApp building platform that focuses on Ethereum-compatible blockchain networks. Like BSC, Polygon is a multi-chain protocol that tries to solve the same problems BSC was solving – high fees and slow transactions. But Polygon is Ethereum centered, creating a framework for building Ethereum dApps while enabling their interoperability with other blockchain networks. 

Some of the features available for developers on Polygon with Moralis include:

  • 1-click deployment using preset blockchain networks
  • A deep library of customizable, extensible modules for creating custom networks
  • Ability to exchange information with Ethereum and other blockchains
  • Specialized security modules called, “security as a service”
  • Quick and cheap transactions

By offering these building capabilities. Polygon provides a platform offering scalability and security. More than that, Polygon is dedicated to creating a Web2 interface that is more familiar and easy to navigate than other Web3 protocols. 

Developers building dApps on Polygon should know that Moralis is compatible with Polygon, as well as other blockchain networks. As the emerging “WordPress for Web3”, Moralis ensures that developers enjoy the best of both worlds: 

  1. Moralis matches the speed of innovation and adaptability in the fast-moving Web3 industry.
  2. They also keep the user experience for developers a more familiar Web2-like experience.

Summary – What are dApps and their benefits?

From a developer’s standpoint, building dApps gives them the power to bring the Internet to the next level. The transformation from Web2 to a more secure, efficient, and fair Web3 is inevitable.  Blockchain-based startups are becoming mainstream and digital assets are revealing themselves as the next generation of value. Blockchain developers benefit by having the ability to bring better, stronger applications to a global base of users. The dApps they build improve on Web2, as they bring the following enhancements to web development:

  • Censorship resistance means that since there’s no centralized point of failure, it is much more difficult for a government or any other group to control the underlying network. 
  • Server downtime ceases to be a problem, as blockchain networks run continuously in a P2P way. One server or even multiple servers can be down, but the blockchain still runs in real-time. When those downed nodes come back, they are instantly updated with the real-time version of the blockchain ledger.
  • Having access to blockchain-based smart contracts allows developers to connect to the massive cryptocurrency industry by incorporating token functionality into their dApps. Web3 applications connect to digital asset markets and multiple blockchains for a modern, interoperable financial system.
  • Because of the open-source nature of blockchain technology, developers don’t have to reinvent the wheel. They can use any other open-source code or smart contract in their architecture.

Using dApp building tools like those offered for free by Moralis makes the process quick and easy. Not surprisingly, the Web3 blockchain movement is picking up speed. Be sure to join the movement before it goes mainstream! Becoming a dApp developer with Moralis today is like becoming a developer in the 1990s, or mobile app developer 15 years ago! If you use Moralis, your opportunities are virtually endless. Get started today!

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