What Is A dApp?
A decentralized application (dApp) is an application built on a decentralized network that combines a smart contract and a frontend user interface. A regular app has backend code running on centralized servers. A "smart contract" is simply a program that runs on a blockchain network.
Here are a few videos to help visualize dApps:
Hopefully, those videos helped you see some real applications of blockchain. Many dApps are interoperable - meaning they can talk and interact with each other. As a result, dApps will evolve fast. dApps of today may look totally different than those 10 years from now.
Excited stuff. But, you may still be confused on exactly how a dApp works.
If you need a concise explanation on smart contracts, we got a tweet thread just for you...
That thread is a good primer on how smart contracts work. There are a lot of parallels between regular applications and decentralized applications. Let’s dive deeper!
Read out this article for a holistic explanation of dApps:
Now, you should have a pretty good understanding of dApps. They are what users will interact with on web3.
Let’s learn about what you can interact with! First, we will zoom out and get a lay of the land. Then, we will zoom in and see the most popular dApps in web3.
Current Web3 Industries
The Ingredients
“Web3” is a good all-encompassing term that captures:
Cryptocurrencies: digital gold, stablecoins, & tokens
Smart Contract Computing: Layer 1-2 platforms
Non-Fungible Tokens (NFTs): digital ID & property rights, behave like physical things, but with lower storage costs, programmability, and composability.
DeFi: behaves like the financial system, but without middlemen and with programmability and composability.
The Metaverse: the digital commons built in game-like environments
Community Governance (DAOs): decentralized autonomous organizations behave like LLCs, but with more flexibility, speed, and stakeholder ownership and control.
*At least, that is what web3 covers right now. The industry grows and changes FAST. Many of these applications are less than a year old! That means that you can be a part of the next big thing, despite being new to the space.
Learn more about recent developments & the current state of web3 here:
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Each of the above areas can take you down a deep rabbit hole. Go out and explore on your own! For now, we give a more holistic coverage with specific examples.
Use Your Wallet
You can use your wallet for a ton of stuff by connecting with dApps. For example, you can: pay someone, buy an NFT, swap a token, stake on a network, loan/borrow tokens, play games, use decentralized storage, & interact with DAOs.
Let’s start simple.
To test out your MetaMask wallet, we created a free walkthrough to mint the Illini Blockchain NFT! The first link is the walkthrough. The second link is the transaction history.
Not so scary, eh?
The user experience of using a dApp is the same as using a normal app. But, dApps are much more versatile. Let’s look at (& use) some current popular dApps.
Popular dApps
Uniswap
Uniswap is an exchange for people to exchange tokens. Different tokens have different functionality, so this is useful. It does this by using ERC-20 fungible tokens for exchange, Automated Market Makers (AMMs) to set exchange rates, & Liquidity Pools (LPs) to provide the money for loaning. You can earn interest by providing liquidity in Uniswap.
What we just said me be very confusing. Learn more here:
Uniswap is an essential dApp. Connect your wallet & give it a try!! Here is the link to use it:
Aave/Compound
Aave and Compound are Ethereum dApps that allow for easy borrowing and lending methods.
If you’d like to learn more about either of these lending platforms, we have resources for each below:
Check out Aave and Compound’s sites and attach your wallet to them. Familiarze yourself on the user interface and maybe even interact with the protocols :)
OpenSea
OpenSea is an NFT marketplace on the Ethereum network. It is the largest NFT marketplace in crypto.
To learn more, check out this article:
Go ahead and explore OpenSea using this link! Attach your wallet by clicking the button in the top right corner.
More dApp Examples:
Hope you had some fun exploring around...some exciting projects out there!! Now, let’s recap what we learned.
Recap
There is nothing particularly “distributed” about the dApps themselves. They’re normal websites. The “distributedness” refers to where the state and the logic/permissions for updating the state lives: on the blockchain instead of in a “centralized” database.
We learned what at dApp is and how it is used. We covered a holistic view of where web3 is right now. And, you got to interact with some of web3’s most popular dApps! LET’S GO!!!
It is clear that web3 has a lot of current applications & many future implications. But, it still has a lot of problems to solve and growing pains to endure.
We have spent a lot of time praising web3. Let’s take a quick reality check & talk about its current limitations & issues.