There has been a visible change in the blockchain landscape with the introduction of decentralized applications (dApps), which have brought a new paradigm for software development.
Generally, dApps run on decentralized networks, which gives users an edge for transparency, security, and autonomy.
We will look into the world of these applications, exploring their evolution and importance to the broader blockchain ecosystem, while also focusing on the most popular dApp platforms.
What Are Decentralized Applications?
DApps are open-source software programs that operate on blockchain networks. Unlike traditional applications controlled by central authorities, dApps empower users by eliminating intermediaries and ensuring transparency.
Decentralized applications utilize blockchain technology’s security, transparency, and immutability, allowing them to afford privacy, ownership, and control over their data and digital assets.
As blockchain technology gains traction, dApps are a groundbreaking aspect, as they benefit blockchain networks in different ways, including;
- Enhanced Security: Decentralized applications make use of the cryptographic capabilities of blockchain technology, ensuring that there is security and resilience against tampering. Furthermore, dApps often eliminate vulnerable single points of failure, removing opportunities for potential malicious attacks.
- Increased Privacy and User Control: DApps are created to safeguard user privacy while avoiding centralized storage systems which can be susceptible to breaches. They usually give users total control of their data, with discretion on what information to share and with whom.
- Eliminating Intermediaries and Reduced Costs: By avoiding intermediaries like banks and brokers, dApps allow direct peer-to-peer interactions, reducing transaction costs and paving the way for a more seamless process.
- Enhanced Transparency and Immutability: Operating on transparent and immutable blockchains, dApps ensure the integrity of recorded data, avoiding cases of tampering or alteration post-validation. Therefore, they create trust with their users and accountability within organizational frameworks. This makes them an optimal choice for building applications while paving the way for verifiable records or indisputable authenticity.
- Increased Interoperability and Seamless Integration: Designed for interoperability, dApps can easily integrate with compatible applications and services, which ensures that some levels of collaborative ecosystems are conducive to innovation. As such, data can be easily shared, and diverse apps can be utilized.
Platform Analysis
Overall, the dApp revolution began with Ethereum, which introduced smart contracts. The platform then amassed a lot of success, paving the way for other platforms, each having a different array of features and use cases.
Ethereum
As one of the pioneering dApp platforms, Ethereum is known for its robust smart contract capabilities and wide developer community.
During the initial creation of the Ethereum network, it utilized the complex Proof-of-Work but is transitioning to Proof-of-Stake with Ethereum 2.0. Ethereum’s primary language for smart contracts is Solidity, which resembles JavaScript. Additionally, developers can use Vyper, a Python-like language.
Ethereum has held for a long time since the network supports complex computations and decentralized finance (DeFi) applications. Additionally, its Turing-complete smart contracts allow developers to create adaptable applications.
There are over 3000 dApps that reside on Ethereum, and a wide range of use cases exist. However, the most familiar include DeFi protocols like Uniswap, lending platforms like Aave, and non-fungible token (NFT) marketplaces. The platform has risen daily, boasting a robust and active developer community.
As dApps differ in the platform, the user interface for all of them varies. Some offer seamless interactions, while others may require improvements.
Challenges of Ethereum as a dApp Platform
Even though Ethereum has been at the forefront of dApp development, it still trails due to some major reasons;
- Market Saturation: The platform has over 3,000 dApps competing for attention. As such, new projects within the Ethereum community encounter stiff competition.
- Scalability, Speed, Security, Interoperability, and Decentralization: The race towards mainstream scalability for Ethereum still has some shortcomings, including security, interoperability, and decentralization.
- Gas Fees and Crypto Price Volatility: DApp transactions are accompanied by gas fees, impacting user experience, while the fluctuating prices of associated cryptocurrencies affect adoption rates.
- Smart Contract Complexity: The shortage of experienced blockchain professionals, together with the minutiae related to the navigation of smart contracts, is still a problem for some users, as they get complications from existing technological limitations.
- Lack of Sector Regulation: There still needs some structure in regulating crypto assets and DApps. Therefore, there is some uncertainty during development.
- User Experience: DApp functionalities may bring up some challenges, especially with users more familiar with traditional apps. Most of the time, this may lead to confusion and resistance to adoption, especially with individuals outside the crypto community.
Binance Smart Chain (BSC)
Binance’s blockchain (BSC) platform provides compatibility with Ethereum tools and a lower cost structure, making it attractive for developers.
BSC uses Delegated Proof of Stake (DPoS), which involves a smaller set of validators chosen by token holders to confirm transactions. The platform is compatible with Ethereum, which allows you, as a developer, to use Solidity for smart contracts.
Additionally, BSC prioritizes fast transactions and low fees, aiming to complement Ethereum by providing an alternative for DeFi and dApps.One of these features is its developer community, which has been growing rapidly thanks to Binance’s support and resources.
BSC hosts various dApps, including PancakeSwap (a decentralized exchange), BakerySwap, and more, characterized by a user-friendly interface.
Challenges of BSC as a dApp Platform
Let’s explore some of the key issues associated with dApp development on BSC:
- Centralization Concerns: BSC is backed by Binance, a centralized cryptocurrency exchange. Some developers worry that BSC’s governance and decision-making processes may be influenced by Binance, compromising its decentralization. Unlike Ethereum, where the community drives decisions, BSC’s centralization raises questions about censorship resistance and control.
- Controversial DApps: Anonymous developers have created controversial dApps on BSC to test its decentralization. These dApps tackle sensitive topics like the 1989 Tiananmen Square protests and liken yield farming to slavery.
- Scalability and Speed: BSC offers faster transaction speeds and lower fees than Ethereum. However, as more dApps migrate to BSC, scalability becomes crucial.
- Quality Assurance and Testing: BSC’s popularity attracts legitimate and malicious projects. Developers must thoroughly test their dApps to ensure functionality, security, and reliability.
- Liquidity and Market Adoption: BSC’s liquidity benefits from Binance’s backing. Automated market makers (AMMs) can tap into Binance’s liquidity pool, but this reliance on a centralized entity raises concerns.
Tron
Tron network aims to build a decentralized internet and offers a high throughput and low transaction fees, making it suitable for entertainment and gaming dApps. Tron also uses Delegated Proof of Stake (DPoS), which utilizes elected super representatives to validate transactions.
The platform is mainly created to build peer-to-peer decentralized media networks worldwide. The smart contracts built on the Tron network are coded with Solidity language. Tron focuses on entertainment, gaming, and content sharing.
Notable Tron dApps include BitTorrent, JustSwap (a DeFi exchange), and TronBet (a gaming platform). Furthermore, these dApps vary in user experience, with some emphasizing ease of use.
Challenges of Tron as a dApp Platform
However, the Tron network still has some issues when it comes to the development of dApps, including;
- Scalability and Throughput: While Tron boasts high throughput and low transaction fees, it faces scalability challenges as more dApps join the network.
- Resource Consumption: DApps using excessive computing resources can overload the Tron network, leading to delays in payment processing and impeding overall performance.
- Centralization Concerns: Tron’s Delegated Proof of Stake (DPoS) consensus mechanism involves elected super representatives. Some argue that this centralizes decision-making power.
- Community Perception: Tron’s acquisition of BitTorrent and its founder Justin Sun’s controversial reputation have influenced community sentiment.
- DApp Adoption and User Base: Tron hosts various dApps, but user adoption varies. Developers must create compelling use cases to attract and retain users.
Cosmos
Cosmos is an outstanding blockchain platform ecosystem crafted to tackle the major issues that current blockchain networks face. From its inception in 2019, the network has strived to introduce a distinctive methodology towards blockchain advancement, emphasizing scalability, interoperability, and adaptability.
Cosmos uses Tendermint BFT (Byzantine Fault Tolerance) as a consensus mechanism, ensuring fast finality and consensus among validators. For its programming language, Cosmos SDK provides a Go-based framework for building custom blockchains. Developers can use Go, Rust, or other languages to create application-specific decentralized applications.
The Cosmos community emphasizes interoperability and collaboration. Developers interested in cross-chain solutions find Cosmos appealing. Some of the major dApps on the platform include Celestia, Terra, and Akash.
The user experience varies based on the specific appchain. Some dApps prioritize security and decentralization over user-friendliness.
Challenges of Cosmos as a Decentralized Application Platform
Cosmos, like any platform, also faces challenges, including:
- Scalability Holdups: While Cosmos aims for scalability, increased adoption may lead to congestion.
- Centralization Concerns: Some argue that Cosmos’ Delegated Proof of Stake (DPoS) mechanism centralizes decision-making.
Tezos
Tezos development represents an open-source endeavor to construct digital assets and applications supported by a worldwide community comprising validators, researchers, and developers.
The major focus is creating Tezos-based digital assets and applications emphasizing smart contract security, fostering open participation, and ensuring long-term adaptability through upgradability.
Tezos uses Liquid Proof of Stake (LPoS). LPoS allows token holders to participate in consensus by delegating their tokens to validators.
The platform also uses the Michelson programming language, a domain-specific language for formal verification. Formal verification ensures the correctness and security of smart contracts.
Tezos uses a self-amendment approach to raise itself without splitting the network into two blockchain networks. Due to self-amendment, high process execution, and coordination, costs for protocol rises are reduced, and innovations in the future can also be activated seamlessly.
Challenges of Tezos as a Decentralized Application Platform
Even with the many advantages of building on Tezos, the platform also has some shortcomings, including;
- Centralization Concerns: Tezos uses Liquid Proof of Stake (LPoS), which involves validators. Some argue that this centralizes decision-making.
- Smart Contract Security: Tezos smart contracts are written in Michelson, a domain-specific language. Ensuring robust security practices during development is crucial.
Final Thoughts
Decentralized applications (dApps) operate on blockchain networks, offering transparency, security, and autonomy. Unlike traditional apps, dApps empower users by eliminating intermediaries and ensuring data privacy.
The decentralized applications industry has witnessed significant growth and positive trends. In 2021, the number of wallets interacting with dApps reached new heights, and trading volumes surged—notably, three main categories—Games, NFTs, and DeFi—experienced substantial progress.
With over $23 billion in trades, NFTs disrupted digital art and collectibles. Blockchain-based games, led by Axie Infinity, attracted attention and investment, especially in emerging economies. The future holds continued momentum for dApps, driven by enhanced security, user privacy, and reduced reliance on intermediaries.
As blockchain technology evolves, dApps shape the future of decentralized systems.