I. What is Dapps?
Decentralized application or otherwise known as Dapp is a decentralized decentralized application, Dapp is created by blockchain technology and smart contracts. Unlike other conventional centralized applications, Dapp has opened a new era for security, connecting users and providers directly without the presence of 3rd party intermediaries and Dapps. is still controlled and sponsored by the user.
Front-end code and user interface can be written in any language that can execute smart contract commands. Code runs on a decentralized peer-to-peer network like Ethereum, and records of application activity are stored on the blockchain.
Now, let’s apply the concept of “decentralization” to blockchain applications. Dapps are open source applications that can do almost anything a regular app can. All user activities will be recorded on the blockchain.
II. Features of Dapp
The common feature of DApps is decentralization. As a result, no one has any influence over the user’s actions on these projects. Decentralized applications in cryptocurrency are also frequently open source, allowing the community to build new projects using the code of previous decentralized programs.
Additionally, that Blockchain platform needs a Smart Contract in order to allow developers to create decentralized applications. Contrary to popular misconception, only Blockchains that allow Smart Contracts may support this application. No other Blockchains can develop an ecosystem with hundreds of applications.
Terra is a prime example; up until 2021, Terra was nothing more than a blockchain for payments. However, the Terra ecosystem has grown significantly in 2021 as Terra began supporting Smart Contracts at the end of 2020.
The third characteristic is that decentralized applications frequently go through similar development processes, such as concept formation, whitepaper publication, token production, token distribution, etc.
III. Dapp is divided into how many types?
Private blockchain or built on blockchain, Dapp is divided into 3 types:
- Type 1: In this type, the decentralized Dapp application will own its own blockchain.
- Type 2: this is a decentralized application that uses the blockchain of a class 1 decentralized application. Type 2 Dapp will implement the protocols and issue tokens to perform the function of the application.
- Type 3: Like a Class 2 Dapp, a Class 3 decentralized application will use the protocol of a Type 2 blockchain. This application will also perform its necessary functions based on the protocols and tokens.
Dapp into 7 categories including: Exchange, Wallet, Betting Apps, Game, Finance, Social Network and some other areas. For example, a few DAPPs are thriving.
1. Exchange:
- Uniswaps: Uniswap is a decentralized exchange built on Ethereum that allows users to swap ERC20 coins/tokens on the Ethereum network quickly.
- Pancakeswaps: PancakeSwap is a decentralized exchange (DEX) developed on the Binance Smart Chain (BSC) platform. This exchange helps to liquidate BSC tokens, as well as staking services, liquidity mining, LP migration.
- Astroport: Astroport is a decentralized exchange according to the automatic market-making mechanism (AMM) on the Terra ecosystem. The project is seen as a more complete version of Terraswap – a predecessor AMM built on Terra.
2. Wallet:
- Trust wallet: Trust Wallet is the official non-custodial wallet of Binance exchange, one of the largest cryptocurrency exchanges in the world. Trust Wallet allows users to trade cryptocurrencies directly on the platform while remaining in complete control of their assets.
- Metamask: Metamask is a non-custodial wallet, originally used to interact with the Ethereum blockchain. Currently, Metamask wallet can integrate many different blockchains. Includes App wallet version for Mobile and application extension on Chrome, also known as Extension extension.
3. Finance:
- AAVE: Aave is a non-custodial decentralized liquidity market protocol where users can participate as depositors or borrowers. Depositors provide liquidity to the market to earn passive income, while borrowers can borrow in an over-collateralized or unsecured fashion.
- Anchor protocol: Anchor creates a marketplace between their stablecoin lenders and stablecoin borrowers, based on collateral. To borrow stablecoins, borrowers lock Bonded Assets (bAssets) as collateral and borrow stablecoins under the LTV rate determined by the protocol.
- Beefy finance: Beefy Finance is a Yield Optimizer platform that allows you to Stake or Farming with the most optimal profit, by using an algorithm to compare the interest rates of Vaults in different Liquidity Pools of the company. decentralized exchanges under the AMM mechanism.
4. Games:
- Radio caca: Radio Caca is an NFT Marketplaces platform built on top of the Binance Smart Chain platform. This project is likened to a vehicle to support the DeFi decentralized financial market to serve the virtual reality universe project The USM Metaverse.
- League of Kingdoms: League Of Kingdoms is a multiplayer strategy game project. The game was developed around the war to build the emirates and aim for world domination. The project will be developed on the Ethereum network and aims to achieve the goal of game development into a separate ecosystem.
- UFO gaming: UFO Gaming is a GameFi project developed on the Ethereum platform with various P2E games designed in a multi-chain ecosystem. Coming to UFO Gaming, you will be entering a closed ecosystem called “Dark Metaverse”. By leveraging the full power of blockchain, UFO Gaming promises to open up a new and reliable financial system for participants.
5. Social networks:
- AIOZ: Aioz Network is a Blockchain-based Content Delivery Network (CDN) that is about to revolutionize the entertainment industry. Use Blockchain for better content distribution through decentralization. Distributed Content Delivery Network (dCDN) uses nodes to store, stream, and transfer data instead of traditional data centers operating on a P2P model.
- Someesocial: SoMeeSocial is a decentralized social network that allows interaction of many social networks such as Facebook, Twitter, Steemit. If Yield Farming has Yield Aggreator, then Social Media Platform will also have Social Media Aggregator.
- Grape protocol: Grape Protocol is a Web3 Social Network application platform built on Solana. Grape Protocol is inspired by Bitcointalk and models decentralization by giving governance to the community through the GRAPE token. Grape Protocol provides a toolkit for users to create hidden chat groups on Discord for sharing information about crypto and the entire Solana ecosystem.
IV. Difference between apps and Dapp
1. Centralized Application (App)
App is an acronym in English for the word Application and the Vietnamese meaning means an application or specifically a certain software utility.
In fact, every device, whether it’s a smartphone or a laptop, to be able to work at its best, to function optimally, it is necessary to install applications on the device to be able to recover. service for different needs.
For example, Zalo application uses mobile apps for voice messaging and online chat, or Microsoft Word, Microsoft, Excel, Facebook, Telegram, Twitter, etc. banks and financial institutions use centralized applications to allows customers to have online access to their personal accounts and those are the applications that we often use every day and these applications are the apps.
3. Decentralized Application (Dapp)
Nowadays, many of us rely heavily on our favorite mobile apps. While using them, we trust that our personal data is safe with our suppliers. In fact, a large portion of online businesses offer their services for free to their users. In return, users (silently or formally) agree to sell their data or portions of it for a profit to advertisers.
For example, “free” email providers. Advertisers are allowed to access your inbox and generate revenue through targeted advertisements to you while you read your emails. Although this practice is common, it has been criticized, causing an outcry from internationally up to the highest political levels. Such was the case during the Cambridge Analytica data scandal of 2018, when user data was widely collected from the user profiles of the world’s largest social network and sold for political advertising purposes.
Of course, everything is limited by the laws of each country. But in the world of blockchain platforms things are different. All activities are decided by the community. In fact, the community will operate the blockchain through the mass participation of groups. Having the right to vote to provide development for the platform, all organizations and individuals have the right to participate.
So the birth of ethereum in 2015 and ICOs are the premise to pave the way for Dapps with great potential and solve the problems mentioned above.
V. Pros and cons of Dapp
1. Advantages
Dapps must be completely Open Source and self-managed. No single organization can control most tokens. All changes to the Dapp must be made with the unanimous consent of the community.
All Dapp data and records must be encrypted and stored on the public Blockchain to prevent a Single Point of Failure (SPOF)
Dapp must use cryptocurrencies as payment method, and users can use these tokens in exchange for Dapp services. All those who provide value contribution (Example: miners) can get Tokens as rewards.
The generation of these Tokens must be collected through a cryptographic algorithm such as Proof of Work or Proof of Stake.
2. Disadvantages
Can be hacked: Running on open source smart contracts is an advantage but also an opportunity for hackers to find security holes to attack. In fact, there has been a series of hacks on popular Dapps.
DApps basically carry two pretty big risks. As with other networks, they can also be hacked. In addition, they depend on the consensus of the network operating agents. This became apparent in the so-called “DAO hack.”
A DAO (Decentralized Autonomous Organization) is a DApp that was launched on the Ethereum blockchain in 2016 and functions like an investor-led fund, albeit decentralized. Every fund’s rules and actions are encoded into its smart contracts. After the first ICO in 2016, the DAO raised $168 million in Ether.
Unfortunately, it fell prey to a smart contract attack after hackers discovered a significant weakness in its code, allowing hackers to steal $50 million (3.6 million Ether). . As you probably know, once smart contracts work, it’s almost impossible to change them in any way, that’s why this bug is so severe.
Usability issues: A lot of Dapps have poor user interfaces and are difficult to use, but this is improving over time.
Difficulty making necessary code modifications: The challenge of making code modifications is another limitation of dApps. Once deployed, a dApp will likely need ongoing changes to improve or fix bugs or security risks.
CONCLUSION
The future potential of Dapps is enormous, and they are directly tied to cryptocurrency initiatives, according to a classification of Dapps by Metalion Ventures that includes information on how they operate and their benefits and drawbacks. There are still many issues that developers and the platforms they utilize must address, including scalability, security, and user experience. In order to advance decentralized apps, we think the existing issues will be solved in the future.
Thank you for reading, and don’t forget to follow Metalion Ventures on social media!
