A cursory look at the charts will show that Ethereum (ETH) and contender Binance Smart Chain (BSC) have taken over the space of distributed apps. Ethereum, by its early arrival, helped several ICO projects develop and expand their products. BSC arrived on the scene late, but it was tailor-made to serve the needs of an already established dApp and DeFi ecosystem.
The two biggest platforms with the most active dApps currently are showing BSC quickly displacing Ethereum. Using a dApp that requires ETH for any computation means being exposed to unpredictable gas fees.
BSC, on the other hand, is fast because it only uses 21 validators to broadcast transactions. This is much faster and easier than reaching 4,021 widely distributed Ethereum nodes. Using 21 nodes also prevents impersonation and attacks, but like similar delegated proof-of-stake networks BSC may fall dependent on a handful of leaders, similar to delegated networks such as TRON or NEO.
For now, the flaws of these two networks may be overlooked as dApps compete to join them and start creating value. But as time passes, more alternative opportunities may appear, and the dApp market may move to other blockchains ready for new production.
The distributed app (dApp) market exceeded an estimated size of $10.52B in 2019, with significant growth expected year-on-year. The first quarter of 2021 saw record usage of dApps driven by crypto collectibles (NFTs), DeFi, and decentralized trading.
In the past year, the dApp market also expanded to include multiple platforms, where previously only a few products ran on the Ethereum network. Since then, two types of platform tokens emerged - ones that built their product while still using Ethereum, and others that started a new blockchain and swapped tokens.
DApps already host several clear-cut categories, including on-chain gambling, crypto games, collectibles, gamified finance, and various token-based minting schemes. Some dApps are short-lived and rely on a few days of hype, while others establish themselves as permanent hubs of crypto activity.
SKALE Network opens up a more intuitive approach to dApp building. While most of the platforms are open to developers, some are more technically demanding, only reaching those teams with an in-depth prior knowledge of blockchain development.
SKALE recognizes that Ethereum is still the most developed dApp environment with significant value already locked in. But Ethereum is slow to build native side chains, so SKALE has taken the approach of building its own version of the technology. SKALE brings multichain solutions to Ethereum, with full-running functionality outpacing Polkadot, which is still in the pre-launch stage.
Building on SKALE allows for the creation of Solidity smart contracts, though with a fraction of the cost compared to mainnet ETH gas fees. SKALE is built to support tens of thousands of decentralized blockchains, where most of the computation is performed. Network orchestration and agreement are finalized through smart contracts running directly on the Ethereum mainnet.
Each SKALE chain is fully decentralized on multiple nodes and secured with the resources of the entire network. Subnodes on each chain are regularly rotated thanks to the pooled security mechanism.
Each chain uses an efficient and mathematically provable Proof of Stake consensus algorithm and is dApp-specific, configurable, modular, and integrated with the entire Ethereum ecosystem.
Polygon (MATIC), rebranded from Matic, is also hitting its stride. Polygon is already used by several DeFi pools to save on Ethereum fees. Polygon got a boost from the Aave DeFi protocol, as well as AaveGotchi, the gamified NFT version.
Polygon is still a newly added dApp protocol, which shows the power of sidechain technology. Using the MATIC token and the new network, dApp users can save on fees and enjoy increased transaction speeds. For most DeFi protocols, speed is essential for successful trades, avoiding hours-long wait times or expensive transactions that ultimately fail.
ZKSync is another new Layer 2 solution that uses ZK-Rollups, a technique that complements Optimistic Rollups. In ZK Rollups, the main contract exists and works on the Ethereum mainnet. However, additional side activities are happening in a zero-knowledge environment and are only finally settled through the main smart contract.
ZKSync already works with Curve Finance, one of the staples in the dApp space. Instead of using validators and wasting resources, the project has implemented a mathematical verification of activities, thus achieving fast and secure records on dApp activity before the final ETH mainnet settlement.
Arbitrum, a project being developed by Offchain Labs, will soon add to the L2 solutions available to dApp developers. Arbitrum is also working on a way to achieve fast and secure off-chain transactions, which are also compatible with the Ethereum Virtual Machine.
The Arbitrum Sequencer launched its testnet version on May 14 and will soon open its mainnet to dApp developers. Offchain Labs continues working on all branches of ETH scaling, including rollups, side chains with validators, and channels; a solution for a smart contract with a smaller and more predictable number of participants.
In 2021, the dApp space also contains some of the blockchains that first appeared as ICOs in 2017. Projects like IOST and Ontology (ONT) are popular with Asian dApp users.
However, the most promising trends sit with the new batch of startups that are on the verge of successfully scaling ETH and achieving bridges between assets. These projects leverage the already robust user base of ETH apps and may benefit from the additional native scaling that will arrive with the building of ETH 2.0.
Building a dApp opens up multiple opportunities for success and monetization. However, not all startups have a highly skilled team to build reliable smart contracts. The multitude of platforms may also pose some hard choices regarding speed, popularity, and programming languages.
Currently, multiple tools are available for any type of development, from the more general to network-specific dApps.
In short, building for the blockchain has been simplified and brought closer for both business teams and developers, as dApps start to pick up speed after years of tweaking and relatively low activity.