The Market for Decentralized Apps
A decentralized application (decentralized app or distributed application), also known as a dapp, is an application that runs on a computer P2P network (rather than a single computer or server). A dapp’s code is open source, or the core part of the data interaction is done by open source smart contracts deployed on the blockchain. It usually comes with incentives powered by tokens and is not controlled by a single entity. Thanks to the nature of the blockchain, a decentralized application’s data is open, transparent and cannot be tampered with.
Around the end of 2017, decentralized applications had begun to be adopted by the market, with the emergence of non-fungible tokens. These tokens make the creation and trading of scarce and unique digital assets possible, as demonstrated by CryptoKitties. As developers explored the possibilities offered by smart contracts and decentralized applications, more than 2,000 decentralized applications were developed on Ethereum, EOS, TRON and Steem by the first quarter of 2019. In 2018, 1,423 dapps resulted in a total transaction volume of over $6.5 billion – with each dapp generating an average transaction volume of over $4.5 million. Comparatively, in the first year of Apple’s App Store, 65,000 mobile apps were created. These generated around $4.2 billion revenue in total, averaging only $65,000 per app. Decentralized applications are still in the early stages of development but they have initially proven their value, and have created a large and fast-growing new economy.
Since 2018 many large teams and publicly listed companies have started to invest in researching and developing decentralized applications – especially in the fields of gaming and social networking. Mass creation and adoption of decentralized applications is coming.
Decentralized Apps Use Cases
The revolutionary dapps described below show the practical potential of decentralized technology beyond cryptocurrencies.
Decentralized Exchanges (DEX)
IDEX is a real-time, high-throughput, semi-decentralized exchange based on Ethereum smart contracts. IDEX consists of smart contracts, trading engines and trading arbitrators. The trading engine and trading arbitrators ensure that transactions can be matched quickly. The user’s private key 3 must be used to authorize all transactions. Smart contracts guarantee the security of both the user’s property and the transaction process itself.
Crypto Collectibles / Gaming Assets
CryptoKitties are digital, collectible cats built on the Ethereum blockchain. They can be bought and sold using Ether and bred to create new cats. Each CryptoKitty owns its own unique, immutable genes and visual appearance. CryptoKitties is a practical use case for digital scarcity and digital collectibles. It pioneered the use of ERC-721, a protocol which is the standard for transactions and ownership of non-fungible assets on the blockchain. In this case, the transparency and proof of data ownership on the blockchain ensured each kitty’s ownership and scarcity.
Decentralized Social Media
Steemit is an incentivized, blockchain-based social media platform. It combines traditional social media with a community that rewards contributors of valuable content with cryptocurrencies. There is no overall authority on Steemit: everyone has ownership of their published content, and the value is determined by the entire social network. Currently, Steemit users reject the centralized content-filtering policies of platforms like Facebook and Twitter. Decentralized social media enables freedom of speech in the truest sense.
Decentralized Betting / Lottery
Etheroll is a smart contract based gambling platform which is proven to be fair. The randomness of each roll can be verified and secured by encryption.
Dapp.com’s Mission and Vision
Blockchain adoption is accelerating at pace, and public awareness is increasing. Factor in the misuse of big data and personal data breaches, and we have a world that is ready for technology that puts users in control. At the same time, government agencies and enterprises in many countries and regions have begun investing a lot of resources in bringing traditional industries onto the blockchain.
The possibilities that dapps offer to change the world we live in are endless and exciting. Within the context of this massive shift, Dapp.com aims to be the go-to destination for dapps. We provide tools and trusted information for developers and users who want to explore the potential of blockchain and decentralized technology.
We are building an ecosystem formed by various product lines, which removes the obstacles to dapp adoption. Dapp.com empower users to discover, use and analyze decentralized apps in the easiest way possible.
1. Difficult to Access
According to open market data, at least 50 public blockchains currently focus on different usage scenarios and feature different scalability performance, which are rapidly incubating dapps and expanding their ecosystem. This has resulted in more than 50 display and distribution channels for dapps in the market, which causes a terrible user experience and wastes resources. In addition, due to each blockchain’s fragmented ecosystem, different user groups do not understand and do not have the source to obtain information for other blockchains.
The promotion of decentralized apps has also been highly affected by different policies and restrictions applied to blockchains by various mainstream channels. Users can only obtain incomplete information through scattered channels.
2. Poor User Experience
According to our Q1 2019 Dapp Market Report, less than 2% of the Ethereum’s 1.15 million users had used dapps. The key reason is that dapps have offered a very poor user experience to date: users need to install wallet tools, import wallets, register their wallets (including remembering information including mnemonics, private keys, etc.) and obtain native tokens for that specific blockchain (e.g.
ETH gas fees are needed to use Ethereum-based dapps).
Such a complex process requires different tools and skill sets for each blockchain, which means that users who use multiple dapps from different blockchains will need to go through the learning process again and again. This has been a serious barrier to the mass adoption of decentralized applications.
3. A Fragmented and Non-Homogenous Market
Because developing and releasing decentralized applications does not require any authorization, there have been a large number of scam and poor-quality applications in the market, causing many users to suffer losses. Fortunately, every decentralized app’s actions and transactions are recorded on the chain, which allows us to check the real user situation through the on-chain data store.
However, this does require a lot of work: collecting, processing and visualization the data. And the data that may involve fraud and suspect trading has to be filtered. To achieve a mature market, we need to help users to discover high-quality applications through trusted, objective data and valuable user-generated content.Dapp WhitePaper