Simplifying Decentralization with DApps

Decentralization has been a unique aspect of blockchain technology and has acted as a driving force behind its substantial success and adoption. Decentralization means having no central authority. In the blockchain, it refers to having no single point of failure or no central authority to control the network. It enables a decentralized network wherein every node is of importance and there is transparency at all levels. This concept has been one of the key factors in the current Web3 wave where primarily, decentralized finance and decentralized applications are driving the ecosystem.

According to daily dApp statistics, there are 3500+ dApps across all spheres with an average daily active users base of 116K+ and daily transactions amounting close to 2.03M today.

From finance to gaming, dApps have found their use in a variety of industries due to their security and transparency.

But even with these phenomenal numbers, the dApp space is not the most user-friendly yet. And when compared to mobile applications, they fall short. There are over 2 million mobile apps available for download on Google Play Store while 1.8 million are on Apple App Store, with mobile apps downloads reaching  218 billion in 2020, according to App Annie's annual 'State of Mobile' industry report.

But why do we need dApps in the first place?

DApps over typical Apps

A dApp is an open-source application that is built on a decentralized peer-to-peer network or a public blockchain that combines a smart contract and a frontend user interface. The logic behind dApps is dependent on the rules of the smart contract and the backend of the application is not controlled by a central authority; rather it is managed by a decentralized network.

The appearance and functions of dApp are similar to mobile applications. But there are certain differences that make dApps more desirable-

• Trustless Mechanism – DApps have their backend managed by a blockchain and thus, the data is stored in a trustless mechanism that is immutable, secure, and owned by the users themselves
• Verifiable & transparent – DApps must be open-source which provides a level of transparency that typical apps cannot. Every user can examine the code and learn how the application functions.
• Run-on smart contracts – Smart contracts are immutable pieces of code with certain functions and capabilities for all to see but none to alter. Once agreed upon by the parties involved, the smart contracts have to be adhered to. Since they are transparent, every user knows what they are signing up for which is rarely the case with other centralized applications.
• Native incentive models – Dapps have in-built crypto-economic models that incentivize participants to contribute to the protocol meaningfully. These can include governance, providing resources, building new features, etc. This enables the Dapp to be truly decentralized as anyone can now participate in the operations & functioning of the Dapp.

Given the above features, they can find their use-case in various industries, for example as a way of establishing secure payment systems, facilitating efficient supply chain management, preventing data duplication in healthcare systems, etc.

But why not 'dApps over typical apps' yet?

The blockchain space has been working towards mass adoption with a focus on including non-tech-savvy users. DApps have provided some relief but they are still not as ubiquitous as mobile applications (yet!).

The key factor in the mass adoption of mobile applications has been the quick development of user-friendly applications that are now the norm. Considering the number of users that can be reached via smartphones, dApps have a thriving market to tap into by improving its UI/UX.

Given the current dApps status, they are fairly famous in the tech community but still have not been able to tap into the non-tech community at large. There have been many factors contributing to it:

• DApps are hard to use as they require a high level of crypto proficiency, starting from the need to create a wallet that holds blockchain specific tokens, which alone isolates a chunk of the target audience
• DApps, as is the case with many typical applications, might need updates or debug. But due to their community governance-based decision making, even small updates might need the whole community which can delay decisions.
• DApps are comparatively slow as they can process only 10 -15 transactions per second and with an overload of unconfirmed transactions, the network can get easily congested.
• Mobile applications are typically free of cost but that is not the case with decentralized applications, wherein the users have to pay a small fee for using them. This small fee is oftentimes not 'small' or insignificant when the network is congested.

How is the dApps space evolving to solve these problems?

Major dApps are rolling out updates that show dApps working towards being user-friendly. For example, the latest UniSwap v2 update allows token flexibility, discourages price manipulations, and allows easy token withdrawals in different payment methods. Furthermore, there are players in the industry that ensure dApps user adoption by eliminating gas fees, providing API and SDKs that remove complexities, enabling instant transactions, like  Biconomy.

DApps can transform the way traditional systems work through the integration of blockchain technology and easy user access. This is just the tip of what dApps can achieve with focused developments and advancements. Given that blockchain technology is rapidly finding use in different sectors already, dApps might become the norm soon.