The world of decentralized applications, or DApps, and their popularity are growing fast. In this article, we will review some of the best DApps in 2020.
The year 2020 was tough and hard for millions of people and many industries all around the world. However, the cryptocurrency market experienced a successful year. The Bitcoin price has surged dramatically, and many other cryptocurrencies have experienced a price increase. This volatility attracts many investors who are becoming interested in the decentralized world. For instance, the total locked volume of decentralized exchanges has risen from around $40 in December 2019 to more than $26 billion at the end of 2020. While many people use DeFi and DApps interchangeably, it should be noted that decentralized finance, also known as DeFi, is a decentralized application itself. DApps can be developed for various range of applications such as gaming, gambling, browsing, etc., and DeFi is a type of DApp that is developed for the main purpose of financial use cases.
Let’s briefly review DApps before we get to the popular DApps list. They are the same as current applications on our smartphones or PCs, with the major difference of not having a centralized server, data center, or entity. This feature brings many advantages to users, such as:
Being open-sourced: As explained above, DApps do not have a centralized server nor entity. Therefore, they are open source applications means that their source code is available to everyone for free. The users can also modify or redistribute an open-source code, enabling them to quickly fix DApps’ bugs or flaws. This capability will improve the platforms’ overall security.
Offering alternative incentives: In contrast to centralized applications, DApps users can gain profit by simply using them. DApps offer incentives in different forms, such as airdrops, yield, or other usage-based rewards. For example, “yield farming” allows investors to earn profits by using liquidity protocols.
Reliability: DApps are created by consensus mechanisms. It is a mechanism used in blockchain networks to achieve the necessary agreement on data values or the network’s state. This feature ensures the security of the network and makes it almost impossible to damage the network.
The first DApps in our list is a protocol for automated liquidity provision created on top of the Ethereum blockchain. It is open-source software for exchanging ERC-20 tokens on Ethereum that eliminates intermediaries, allowing for fast and efficient trading. In this protocol, decentralization, censorship resistance, and security are prioritized.
Although the majority of cryptocurrency investors use well-known trading platforms such as Binance or OKEx, Uniswap has many advantages over those centralized platforms due to its decentralized nature.
Asset ownership: The whole purpose of the decentralized internet is to eliminate the need for intermediary authorities, and enable true ownership for users. Similarly, the idea behind cryptocurrencies was to provide users with the true ownership of their digital assets without a need for bank or exchange offices to transfer or hold their assets. However, users are trading their cryptocurrencies through centralized exchanges, and their assets are in the custody of a third party. If users want to transfer their assets to hardware wallets, they have to pay a considerable amount of transaction fee.
On the other hand, decentralized Uniswap secures users with ownership of their assets. Therefore, users do not need for an intermediary to make their buying or selling demands, and as a result, they never lose control over their digital assets. This capability is secured by smart contracts that execute trades in a trustless manner.
Ease of use: As explained above, users do not need intermediaries for trading assets. In order to carry out an exchange, users have to choose the assets that a user wants to exchange and then click on the “connect wallet” and confirm the transaction. This is the whole procedure. After confirmation, the acquired assets are transferred to the buyer’s wallet without the need for any third-party platforms. Therefore, the assets are never under the control of an intermediary.
Advanced liquidity platform: As explained before, many DApps offers their users incentives in various forms. Uniswap also has this feature, and users can have active participation in the DApps liquidity pools. Users can receive a share of the platform’s trading margin by staking their coins in the pool.
2. InterPlanetary Search Engine
A decentralized world was the idea and utopia in the early stages of internet development. However, as the internet developed further, this utopia became more and more unachievable. Today, there are few giant techs that control and regulate data distribution over the internet network. For example, Google is the most powerful search engine that has a monopoly over the search engine sector worldwide, and it has compulsory terms and conditions that may lead to information leaks or advertising tracking.
InterPlanetary Search Engine (IPSE) is a revolutionary search engine built on the EOS blockchain. This search engine uses IPFS (InterPlanetary File System), a hypermedia distribution protocol that enables users to quickly access files on the IPFS network. This decentralized search engine ensures user data protection using its asymmetric encryption technology and requires the user’s approval for any ad tracking. Like many other DApps, IPSE offers incentives, can save and share data on the decentralized network, quickly search files, and get tokens as rewards.
Moreover, the shared contents on IPSE are end-to-end encrypted and are always traceable. In contrast to centralized search engines, IPSE does not follow the “bidding-based ranking” system, so search results are protected from moneyed players. Last but not least, a decentralized platform makes it nearly impossible for hackers to break into the system because it is practically impossible to attack all the nodes in the network simultaneously.
CryptoKitties is one of the first and most successful DApps. It is run on top of the Ethereum blockchain and was launched in 2017. The purpose of this DApp is pure entertainment, and its popularity greatly impacted the development of non-fungible tokens (NFT) and the Ethereum blockchain. Users can create or bread unique cats and then sell them at a profit. These adorable cats are non-fungible ERC-721 tokens called CryptoKitties.
In contrast to utility tokens, NFTs are unique digital assets, such as collectibles or game items, that are not interchangeable for another NFT. So, in CryptoKitties, every cat is unique in its appearance and behavior, and users have true ownership over their kitties.
Although CryptoKitties may sound like a game for juveniles, it is one of the most popular DApps ever since its launch in 2017. The reason for such great popularity might be the clever choice of an adorable creature, kitties, or the simplicity of the game. Whatever the reason is, the users love this DApp, and at its pinnacle, CryptoKitties accounted for about 10% of Ethereum daily transactions. It can be a great choice for new users in the decentralized world as it is fun and very simple to work with.
Rarible is a community-owned NFT marketplace where users can create, sell, or collect digital items secured with blockchain. The native governance token of this DApp is RARI that is designed to reward active users for their contributions to the platform as well as providing them with a voice on the platform’s future.
As NFTs are unique digital assets, the idea of having a market place for them is ordinary. In fact, there are other NFTs market places, such as OpenSea, but what makes Rarible different from its rivals is a feature called “minting”. This feature ensures more security for trading rare items as well as expanding Rarible’s platform usage.
The minting is the process of tokenizing your work and creating an NFT. This feature allows many users to tokenize their content and sell them for a profit. This will help content makers to easily make a profit and overcome problems such as copyright violation and plagiarism. For example, if an artist wishes to sell their created piece of art, like a book or a song, they can use this feature to make their art into an NFT, protecting it from forgery in the digital world. Moreover, this technology enables artists to provide potential buyers with a preview of their content. It will help the artists to promote their content and buyers to decide better and easier.
The developer team of the Rarible project has made the platform completely autonomous, enabling the platform to be run according to a community-governance-based model.
5. Axie Infinity
This DApp is a game platform similar to CryptoKitties. Players can create, raise, and collect fantasy creatures called Axies, but it is slightly different from CryptoKitties. This game is adventurous, so players can battle with other users or hunt for treasures. They can also team up their creatures with other users and experience a more dynamic and adventurous world. This decentralized game is built on top of the Ethereum blockchain.
The DApp’s popularity has increased significantly during the past year. It was the most-played game in the Ethereum blockchain, and its monthly active users are currently around 18,000.
This impressive growth in the DApp popularity and market has made the project’s team test new approaches in order to further expand the project. As a result, they have recently developed and launched the DApp’s own sidechain, Ronin. Ubisoft, the giant video game company, was the inaugural validator of Ronin.
This is a social DApp that is built on top of the Steem blockchain. It is similar to all social platforms that we use every day; users can create content and posts on any topic as well as adding photos, videos, or anything they desire. However, there is a major difference. While in centralized social platforms the respective company benefits from users’ contribution, Steemit rewards its users for the attention and contributions they make to the platform.
When a user posts content on the Steemit and it attracts other users’ attention by receiving “likes” from them, the user is rewarded for his/her contribution to the platform in the form of the blockchain’s tokens, i.e., Steem, Steem Dollars (SBD), Steem Power (SP).
Steem tokens are like other tokens and can be traded to other tokens or cryptocurrencies or be transferred to other accounts. Steem Dollars token has a stable value and has a one-to-one ratio to the US dollar. They can also be traded or transferred to other accounts.
On the other hand, Steem Power tokens are only assigned to the platform. They serve as a scale to measure the influencing level of a user within the Steem network. Users with more Steem Power tokens have more power to influence the value of contents they vote for.