what are dapps

What are dApps? Trends and challenges in dApp development.

What are dApps? Why do we have them? Which were the first dApps and which are the most popular dApps at the moment? What are the challenges when building dApps?

These are all the things that we recently covered in a webinar together with our friends and partners from Alice. 

In this article, we are going to cover the most important parts of the webinar and will link to the recording for those who want to know more. 

What are dApps? 

Decentralized applications or so-called dApps are usually quite simple. They run on a blockchain or some kind of a network protocol and usually leverage smart contracts. They allow peer to peer user interaction and provide incentives. Some of them provide incentives in the form of tokens and others in the form of reputation, while others do both. 

What are the benefits of dApps? 

We can outline 4 main benefits:

• dApps are distributed. This means that they’re hard to be shut down from a central point, at least while the underlying blockchain is operational.
• dApps are also censorship-resistant and this is due to the immutable nature of blockchain.
• dApps are also decentralized and this means that usually, they don’t hold custody of either the user’s funds or data.
• And ideally dApps are open source – there are dApps that are fully open source and there are some dApps that most of their platform is open source with small algorithms and parts that are not.

Of course, there are some dApps that do boast all these four features. Others will only boast two or three, but that’s how it goes. 

There were dApps way before the blockchain era

Many of you probably remember apps like LimeWire, BitTorrent, DC++. LimeWire and BitTorrent are great examples of peer to peer file sharing protocol. DC++ is also a peer to peer file sharing but in private networks. Looking back, this is quite fascinating because those were all kind of decentralized peer to peer applications. And we were way before talking about blockchain or smart contracts. 

Technologies for building dApps

Currently, we can build dApps on Ethereum, on EOS, and on some other blockchains. We’re going to mention the most used ones here.

But let’s first cover some stats (the source of all is State of the Dapps).

The total amount of dApps that were built since the launch of Ethereum, EOS, and all the other blockchains is 3.200 dApps. 80 to 90% of them are built on Ethereum. Daily active users on Ethereum currently are about 25.78k with about 79k transactions daily. Out of this 3.2k dApps the half are live, a thousand are abandoned or dead, and there are some in beta or work in progress in the prototype stage.

We’re going to dive deeper into the Ethereum dApps just because it’s the liveliest blockchain network now and we have the most activity going over there.

For more stats around transaction volumes, types and daily active users watch the recording of the webinar below:

Examples of great dApps

Next, let’s talk about some of the dApps that are actually doing a great job right now and provide a more interesting use case.

1. The first dApp is called Erasure Bay. It is built by the guys at NumerAI. It’s an information marketplace where you can request any information, set up a reward amount in DAI, and ask for a DAI stake.

2. Probably everyone has heard of Crypto Kitties. It was one of the first blockchain games out there and managed to make great use of non-fungible tokens or digital collectibles. It’s pretty straight forward. You can breed, buy, and sell cats on the Ethereum blockchain.

3. And the third is OpenSea. It’s a decentralized marketplace for digital assets or non-fungible tokens. People can trade crypto kitties, sports cards, game heroes, and others.

3 things to take into account when building dApps

All of these dApps are great but let’s talk about a few things that often get overlooked when people are building dApps. 

• Blockchains are still really, really complex, meaning that entrepreneurs and users have to understand and deal with transaction fees, wallets, etc.
• The importance of having really solid smart contracts is quite overlooked. When building stuff, here at LimeChain we believe that bulletproof contracts are a must, however, they’re definitely not easy to build.
• Account for longevity when choosing a blockchain. There’s a bunch of protocols out there and you have to ask yourselves which one is likely to be around 2, 3, or 5 years from now.

Tools to use when building a dApp

We’ve worked on about 65 blockchain projects over the last 3 years. Here we’ll share some of the tools that we use the most when building. 

• The first one is the Gnosis Multisig. It is basically the leading multisig wallet for fund storage, meaning that you can use the smart contracts for storing the funds of your company. For anybody that doesn’t know what Multisig means, it means that just moving funds would require more than one signature of a transaction. If there are three founders, you can agree on all 3 having to sign a particular transaction before it goes out.
• Secondly, we’ve been using
Abridged SDK. The guys from Abridged have built SDK for intuitive web3 onboarding and the best thing about it is a smart wallet with batch transactions and payments.
• Last, something that we use literally every day is
EtherLime. It’s a tool that we at LimeChain developed out of our own needs back in 2017. EtherLime allows for faster and easier development and deployment of smart contracts. Although we developed it for our own needs, its positive feedback from the Ethereum community constantly grows and it’s being used by Argent, Erasure, and Molecule among other projects.

Biggest challenges when building a dApp

Let’s check which are the biggest challenges when building dApps:

• The first one and probably the biggest one is onboarding users. Onboarding crypto native people or blockchain native people is easy and there are plenty of tools to leverage for this purpose. The biggest challenge is that we need to onboard the web2 community or the non-blockchain community in a seamless manner.
• Second thing, networks can get clogged every now and then. We are hoping this is going to change with Ethereum 2.0 which will change Ethereum consensus mechanism and hopefully make it more scalable.
• And last but not least, dApps are not yet mobile native. We have all these great dApps, most of them are still only available on the web. Few of them are available on mobile. The great news here is that we see making big steps in this direction.

If you are interested in knowing more about making mobile native blockchain dApps, check the second part of our webinar, where our friends and partners from Alice talk more and demonstrate on a live demo. 

If you are already familiar with how decentralized applications work and already have a great idea, we can help you build your own dApp.  We can also help with smart contact or wallet development, auditing, or consulting.


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Blog author Silvia


Silvia Ivanova
Head of Growth