What Is a Dapp? Crash Course on When & How to Build One in 2022

By Nick Epson on August 12, 2022

Blockchain and all that comes with Web3 territory is an exciting and confusing territory.

Because the world is moving in this direction, it’s helpful for businesses to see the big picture to understand how (and if) tech like decentralized apps (dApps) will impact them.

Here, we’re going to cover some of the basics to provide insight on dApps to attempt to paint a picture of what the future of the Internet might look like.

What are Dapps?

The simplest way to explain a Dapp is that it is a digital product like an app or website that makes use of blockchain in some fashion.

what is a dapp

Although every app will have different endpoints, a blockchain component will link at least a couple of processes similar to the Zakaah Dapp architecture pictured above. | Source: ResearchGate

If you understand the basics of most app design architecture then you understand that most digital products, including websites, are typically decentralized in nature – the client (i.e., app) sends and receives data between different systems, databases, and third-party vendors.

However, a Dapp is more decentralized than a traditional digital product as it will have at least one blockchain serving a role similar to a database which is much more distributed than traditional models. They can either run independently or in conjunction with web technologies and mobile frameworks.

Calling these products “more decentralized apps” would be more accurate (but it sounds ridiculous) so Dapp is the umbrella term we get to essentially describe an app that uses cryptocurrency and/or NFTs such as in play-to-earn ecosystems.

Where do Dapps come from?

When a business owner or product manager and a blockchain love each other very much and want to start a family… that’s lovely. But like most relationships, rushing into something isn’t in anyone’s best interest.

what is a dapp

Except for divorces here can be a lot more costly. | Source: Falkenpost on Pixabay

Like any other development endeavor, market and product research along with business strategy development will determine if a blockchain is viable solution for a product.

Most businesses that are effectively using blockchain to deliver a Dapp have done so by first dialing in on their core deliverables before assessing different blockchains (right now, Ethereum or Polygon tend to be the most popular) to understand their specific consensus mechanisms and find the best fit.

At Blue Label Labs, we would figure this out during our initial Design Sprint process – if it’s an ideal fit, we would explore blockchain options for a project but we won’t (nor do we recommend) using blockchain just to do it.

While there aren’t a lot of oops-I-chose-the-wrong-blockchain stories circulating just yet, rest assured that there will be – you don’t want this to be your business.

When should you build a Dapp?

During strategy sessions, businesses uncover what qualities will make a blockchain stand out as well as where to use and not use blockchain elements.

what is a dapp

Not everything needs to use blockchain. | Source: geralt on Pixabay

Right now, most businesses use blockchain for one or more of a few general purposes. Some of these include:

Security and durability. 

Once something is written to a blockchain, it can be very difficult to impossible to remove, depending on the framework. 

This is where both the ledger function and immutable code come together to produce smart contracts which can securely store information indefinitely. This is useful for a variety of applications like storing receipts to authenticate a product with its owner which could be useful for product warranties.

The economic element. 

Creating or tying in a cryptocurrency will transform your relationship with users into something more complex as this means managing an economy.

Though the market is objectively tumultuous, those that stabilize can provide a growing ecosystem for users. This holds true for commerce-focused sites as well as those more geared toward entertainment.

You want to offer something finite and unique. 

Building on the security and durability element is the ability to offer finite digital objects in the form of NFTs.

what is a dapp

Good on them for offering an NFT with real value.

As we discussed throughout the blog in the link, NFTs can be used for much more than selling low-utility digital art for absurd gains. An NFT could also be used for the likes of an item in a game or as a digital counterpart to a physical collectible which can also serve as a tool like we see with Kings of Leon NFT Yourself album.

How Dapps are built

A Dapp will share many of the same paradigms you see in apps and on the web today.

Much of the process is still the same – you still need UX and UI designers to help create the look and layout of the frontend. It still needs to be researched, tested, and receive the same treatment as any other digital product.

In blockchain, data is constantly verified by networks to prevent shenanigans which is why it’s ideal for finance (a la cryptocurrency) and many other industries. | Source: Intellipaat

However, there are some key differences when it comes to utilizing blockchain so it varies in a case-by-case scenario. Most often, a blockchain service will replace certain databases like those built with MySQL, Firebase, and other solutions.

Unlike a traditional database, blockchain provides more capabilities than just structured data storage as we see with most databases.

Some services will also use the blockchain to store and call on usable code which means that certain processes that would typically be found in the front or backend of the app will instead come from the blockchain.

Of course, this is just a birds eye view of an involved, complex process! 

For more detailed information, keep an eye on eye blog for upcoming content such as this recent piece from our blog on securing smart contracts through visibility modifiers.

Examples of Dapps today

We’ve touched on metaverses like The Sandbox in the past that you could say are specific types of Dapps. Like mobile apps, a Dapp can be just about anything.

Let’s look at a few examples on the market today.

MakerDAO

As a self-described “unbiased currency” and leading stablecoin – essentially, this Dapp is what enables the generation of Dai, a cryptocurrency that’s main goal is not to wildly fluctuate like most other assets.

what is a dapp

Plus, “Buy Dai,” has a nice ring to it. | Source: MakerDAO

One great thing this platform demonstrates is that there are fewer whimsical ways to offer crypto. This model can be helpful if you’re looking to offer an entertainment product but want to avoid the volatility that comes with most play-to-earn models.

OpenSea

Though OpenSea seems like just a channel for spending on the aforementioned, low-utility images, remember that the application for NFTs is diverse, just like all the different kinds of files in circulation.

what is a dapp

Soon, NFTs will become much more valuable once they’re better supported. | Source: OpenSea

The kinds of NFTs you’ll find on OpenSea are already somewhat diverse as some like Stickmen Toys sell “utility-enables, audio-visual NFTs” that do much more than a static image.

In time, we’ll likely see greater variety as OpenSea grows to support more than mainly Ethereum-based assets.

Axie Infinity

When we’ve discussed the Axie Infinity platform in the past, the main focus was on the Axie characters that exist as NFTs which users trade and utilize for gaming sections.

It’s all Ethereum based and uses a unique crypto token, the Smooth Love Potion (SLP), that can be used to purchase items from the platform and other users as well as traded on supported exchanges like Binance.

Currently, Axie Infinity is among the easiest platforms to use for those looking to get acquainted with blockchain and see firsthand some of what it can do.

We know how to build with blockchain

Finding and using the best blockchain is a challenge we’re equipped to handle between our experiences working with solutions like Ethereum, Polygon, and more.

Like anything else, strategy is key when working with blockchain – to learn more or to get help with your blockchain idea, get in touch today.

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