According to the State of the DApps, there are currently more than 3,000 DApps – or Decentralized Apps – active on the Ethereum blockchain. Although DeFi is popular with approx 375 DApps, Gaming and Gambling rank higher, each boasting around 535 and 416 DApps respectively.
As most of our readers will know, DApps differ from regular mobile and web-based apps because they aim to hand users more control over the data the apps manage. Dapps take a decentralized approach to data management, theoretically putting control back in the hands of the user with the help of blockchain technology. While Ethereum is not the only smart contract platform, used to build and operate DApps, it is the world’s second-largest cryptocurrency by market capitalization (after bitcoin) and the first platform to facilitate the creation of DApps.
Ethereum DApps have become so popular that the increased congestion has pushed transaction fees on the network higher than ever. This is because of DApp users competing to get their transactions processed faster by miners.
Top DApps you should know about
Uniswap: Uniswap is a decentralized exchange (DEX) and currently the most popular one. The exchange has played an important role over the last year in popularizing DeFi and DeFi-tokens. One unique aspect of Uniswap is that it utilizes an automated market maker (AMM) system for facilitating trading, meaning the underlying liquidity pools that manage the actual coin-swapping are run by smart contracts as opposed to a traditional order book system.
When trading on a Centralized Exchange (CeX), such as AAX, the market price for an asset is determined by supply and demand. In order to buy and sell, a trader must find someone on the opposite side of the order book to provide liquidity to complete a transaction. With AMM-based exchanges like Uniswap, a pricing algorithm determines the market price of each asset. Investors provide liquidity which is pooled together and used to execute all trades at set market prices.
Chainlink: Chainlink (LINK) is an oracle platform, able to connect smart contracts with real-time data from the outside world such as weather information, stock prices or other data. A smart contract uses that data to execute pre-defined instructions. For example, payout an insurance claim in the event of an earthquake. Chainlink has been around for a few years now, but only after partnering with Google in 2019 did the project see significant growth.
WBTC: Wrapped Bitcoin is a token on Ethereum that is backed 1:1 by bitcoin. The goal is to bring bitcoin’s liquidity to Ethereum. It has grown in popularity partly because users can earn interest on the bitcoin they lock up on Ethereum.
Decentraland: A decentralized virtual reality game, where users own virtual plots of land and can build structures such as theme parks and casinos that can be monetized.
A Digital Revolution
Of course, the above selection is just to provide a general idea of the space. There are many, many more interesting DApps. For insightful data, both State of the DApps as well as DeFi Pulse are worth checking out.
The crypto space is not just about ‘creating money’, as some may think. Surely, tokens are subject to speculation and are plugged into a larger ecosystem where users may trade, look for arbitrage opportunities, engage in lending and borrowing, auctioning, provide liquidity, and so forth. For many, this is the primary motivation to enter the space and invest.
It is important to realize, however, that what’s currently taking place on blockchains such as Ethereum, Cardano, Polkadot, Binance Smart Chain, Ripple and EOS is more than just creating new markets. Smart contracts platforms have the potential to radically change the way we, as a society, interact on the Internet, manage our wealth, cast our votes, communicate and build identity.
Some might say this is what was always intended with the Internet. Others call it Web 3.0.