Decentralized applications (DApps) are a new form of mobile or computer application that function in a decentralized way, use smart contracts for transactions/computations, and run on blockchain technology.
DApps are similar to computer and phone apps developed on Windows, iOS, or on Android. So it’s easiest to think of them as Web3/blockchain versions of these traditional types of applications.
DApps signify an essential development in the blockchain and Web3 space because they seek to solve issues related to Web2 such as platform risk (censorship), data security, and ownership over personal identification information.
Moreover, because DApps run on the blockchain, they offer greater levels of interoperability with intra-blockchain ecosystem apps and other blockchains via bridges. So they have certain advantages over traditional apps in being interoperable across platforms and hardware.
DApps can apply to all sorts of industries, markets, and use cases such as gaming, DeFi, and NFT marketplaces.
At the moment, the majority of DApps are developed on the Ethereum blockchain and are primarily made for gaming, financial, and NFT trading purposes. Below is a list of the top 15 DApps ranked by userbase according to__DappRadar__.
As you can see, many of the DApps are in the gaming, DeFi, and NFT segments. In particular, notable names such as Alien Worlds, PancakeSwap, Splinterlands, Magic Eden, Axie Infinity, and OpenSea.
However, because there’s a centralization of DApp development in these three categories, it means it’s still early days as creators haven’t yet begun making apps that can compete with traditional apps in productivity, banking, communication, social media, lifestyle, and entertainment segments.
Creating world-famous DApps that have tremendous disruptive usability takes time. For example, Microsoft Office, Adobe, and other software and games didn’t get created in months, but rather years.
Nonetheless, it’s still early and the industry is constantly witnessing the creation of fantastic new Web3 apps.
DApps are pieces of software that communicate with the blockchain. DApp interfaces look similar to what websites and mobile apps look like today. However, what’s different is at the core logic of a DApp is smart contracts. Smart contracts work at the backend of a DApp, and the backend is what represents the entire business logic and hence is the most important factor in determining the DApp’s true decentralization.
DApps are different from Web2 apps because they’re built on the blockchain and utilize smart contracts for certain functions and computations. Web2 apps are stored and processed through centralized companies and servers. Hence, DApps are a brand new creation necessary for bringing out the next iteration of the internet – Web3.
Web3 is the next evolution of the internet, and DApps with smart contract capabilities that can function smoothly on the blockchain is necessary to make that next internet leap happen. However, there have been some setbacks in this process.
For example, the Ethereum blockchain despite being the catalyst that brought about mass DApp development still doesn’t fully host DApps on-chain. This is due to the blockchain trilemma and the vast amounts of data that this endeavor would demand. In particular, every node would have to keep a copy of this data, thus making it impossible to have the entire network of nodes storing all this data.
Also, because data stacks up quickly it clogs the network and results in booming gas fees, which hamper any kind of serious scalability.
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So what does this mean? Is it problematic? This means that despite the talk of blockchain decentralization, there are still failure points and weaknesses to the DApp development model using blockchains. This is because these DApps still don’t fully use the blockchain for the entire app, front-end versus back-end on or off-chain.
Although DApps are blockchain-based applications, they have not fully developed to being perfectly decentralized and on-chain. This is because of the limitations to the blockchain trilemma such as being able to have the processing power, speed, scalability, security, and decentralization. As a result, many blockchain DApps are not fully on-chain, with many developers choosing to route certain functions, code, UX, front-end, and back-end to third-party providers off-chain.
So is there a solution to the off-chain DApp situation? Yes, developing DApps on a blockchain tech stack that hosts and runs the code and smart contracts on-chain like the Internet Computer.
The Internet Computer provides this infrastructure for developers and creators to build DApps all on-chain. Below is an example of the Internet Computer’s network architecture that allows DApps to be hosted on-chain.
What makes the Internet Computer’s network able to run applications all on-chain is smart contract canisters. As you can see in the image above, smart contract canisters are at the top of the tech stack, built on the ICP protocol with all the data and information stored in independent data centers worldwide.
Internet Computer canisters are able to do things that normal blockchains cannot such as store vast amounts of data, communicate with each other in a speedy way, and connect to a protocol and data centers directly. Canisters are thus extremely scalable and able to do transactions in multiple thousands per second.
So what this means in practice is that the Internet Computer hosts a DApp’s front-end and back-end both on-chain. The back end is the smart contracts and data storage, and the front end is the UI and web pages.
Many DApps such as OpenSea and Metamask use traditional HTTPS URL, but the Internet Computer does the front-end website also using smart contract canisters. So in the end, an Internet Computer DApp website will look like this
Moreover, on the Internet Computer, unlike OpenSea, the NFT metadata will be held in on-chain storage and not routed off the blockchain.
For these two reasons i.e., having DApps run their functions all on-chain is why the Internet Computer is the superior blockchain.