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Decentralized Applications: What is a dApp?

Updated: May 23, 2023, 11:09 AM


A decentralized application (dApp) is a software application that runs on a blockchain network. Unlike traditional web applications, which are controlled by a central authority, dApps are decentralized, meaning a network of users controls them.

A dApp consists of three components: a smart contract, a user interface, and a backend. The smart contract sets the rules governing network interactions. The user interface is the face of the dApp, and allows interaction with the smart contract. The backend code is the core infrastructure storing and retrieving data from the blockchain.

dApps use cases go from digital asset management to gaming, social media, and supply chain management. Some famous examples of dApps in the crypto industry are decentralized exchanges like “PancakeSwap,” marketplaces like “OpenSea,” and decentralized autonomous organizations (DAOs) like “MetFi.”

What are the benefits of a decentralized app?

Decentralization offers many advantages over a traditional centralized network. For one, it makes dApps more resistant to censorship and tampering.

Because dApps are not controlled by any single entity, it is much more difficult for any person or group to shut them down or manipulate them. Additionally, dApps are often more transparent and open, as all transactions and data are recorded on the blockchain and are visible to everyone.

Ever heard about DeFi? 

One of the most popular use cases for dApps is in the world of finance. Decentralized finance (DeFi) platforms, or open finance, are a new class of dApps designed to provide financial services without a central authority.

These platforms allow users to borrow, lend, and digital trade assets without the need for banks or other financial institutions as intermediaries. This can help to democratize access to financial services and make them more accessible to people around the world.

How do dApps work?

Let us go through some of the mentioned decentralized Apps above to answer this question.


Pancakeswap is a decentralized exchange that runs on the Binance Smart Chain (BSC) and allows users to trade cryptocurrencies trustless, decentralized. Instead of relying on a centralized intermediary, PancakeSwap uses smart contracts on the BSC blockchain to facilitate user trades.

DEX makes swapping easier as it uses one of its key features: a liquidity pool system. This allows users to provide liquidity to the exchange by depositing their assets into a pool, which is then used to execute trades. In return, liquidity providers receive a portion of the trading fees generated on the platform. The platform also has a unique way of governance with its token CAKE, which allows holders to vote on platform proposals and earn rewards through staking.


This decentralized marketplace is for buying, selling, and discovering non-fungible tokens (NFTs). It allows users to list, bid on, and purchase unique digital items such as collectible art, game items, and other virtual assets. OpenSea is an application built on the Ethereum blockchain, which allows for actual ownership and control of NFTs by their buyers. It also has the feature of creating and managing your marketplace. It has become one of the most popular and widely used platforms for buying and selling NFTs.


A DAO, or Decentralized Autonomous Organization, is a digital organization that operates on a blockchain network such as BSC. MetFi is decentralized, meaning it is not controlled by any single authority or centralized entity and is run by its members through a set of rules encoded in smart contracts.

It operates on a blockchain-based platform and uses MFI tokens representing ownership and voting power. They can be used for various purposes, such as decentralized fundraising, community governance, and purchasing MetFi NFTs to access high yields (100-1000% APY) and staking benefits.

DAOs have the potential to provide a transparent, secure, and efficient way for communities to organize, govern and make decisions.

Which risks do I have to consider when I use decentralized apps? 


One of the biggest risks is the potential for hacking. Because dApps run on decentralized platforms, they are more vulnerable to hacking attacks. Additionally, dApps are often open-source, so identifying and fixing vulnerabilities in open-source code can be more difficult. Unlike centralized apps, once you are hacked, there is no way to recover.

Scam and regulation

Because dApps are not regulated by any central authority, identifying and shutting fraudulent projects can be more challenging. Additionally, because dApps are often built on new and untested technologies, it can be more difficult to understand the risks involved in investing in them. Additionally, dApps are often built on new and untested technologies. Understanding the risks involved in investing in them can be more challenging.

Liquidity and volatility

A further important aspect that should be considered when it comes to dApp is the issue of liquidity. Many dApps, especially those not widely adopted, might have a shallow trading volume, making it difficult for users to buy or sell their app assets.

Too much of unknown territory or a great chance?

Overall, dApps have a lot of potential to revolutionize various industries, from finance to gaming. Offering a level of decentralization and transparency that traditional centralized systems cannot deliver. However, it’s essential to know the risks and research before investing in any dApp.

A dApp represents a new class of software applications built on decentralized networks rather than centralized servers. Additionally, it’s essential to stay informed about the regulatory landscape and laws and regulations surrounding how dApps operate, as they are still evolving. Still, they have the potential to revolutionize various industries and create new revenue streams for game developers and democratize access to financial services.

Why are dApps not used as traditional applications and programs yet?

An important aspect to consider when it comes to dApps is the issue of scalability. Because dApps run on decentralized networks, they often need help with scalability issues that can slow down transactions and make it difficult for dApp to handle many users. This is a common issue faced by many blockchain-based dApps and is an area that is currently being researched and developed by many teams in the blockchain space. Many dApps need more user-friendly interfaces, which is another issue to date.

How bright is the future of a dApp?

Despite these challenges, dApps have a lot of potential for the future. As the technology and infrastructure improve, dApps will likely become more user-friendly. Also, as more people become familiar with blockchain technology and its potential uses, more dApps will probably be developed and adopted.

Do smart contracts secure them?

First of all, what is a smart contract?

Smart contracts are digital contracts that are stored on a blockchain network. They contain the rules and logic governing a decentralized application’s behavior (dApp). A smart contract is self-executing, meaning it automatically performs the actions specified in the contract when certain conditions are met. They are also transparent and unchangeable, as all transactions and data are recorded on the blockchain and are visible to everyone.

Are dApps backboned by these?

Yes! Actually, it’s pretty important to consider the issue of smart contract security risks. Smart contracts are the backbone of dApps, and they contain the rules and logic that govern the behavior of the dApp. If a smart contract is not written correctly or audited, it can have vulnerabilities that hackers can exploit.

Who is in charge of the rules and regulations in this decentralized environment?

A decentralized network of users runs DApps, and it’s essential to have a system for making decisions and resolving disputes. This can be challenging as there is no central authority to make decisions, and it can be difficult to reach a consensus among the users, which creates an issue of governance.


In conclusion, a dApp is a new and exciting technology with much potential for the future. Thanks to smart contracts, they offer a level of decentralization and transparency that traditional centralized systems can’t match.

However, it’s essential to be aware of the risks and challenges that dApps face, such as scalability, user-friendliness, liquidity, smart contract security, and governance. It’s essential to stay informed about the latest developments in the dApp space, the regulatory environment, and the laws surrounding them as they are still evolving and to do your due diligence before investing in any dApp.

Despite these challenges, dApps have the potential to revolutionize various industries and create new opportunities for developers, investors, and users alike. With the right approach, dApps can become more scalable, user-friendly, and secure, making them more accessible and adopted by the mainstream. It’s essential to know the risks and possibilities and make informed decisions regarding dApps.

With the right approach, dApps can become an integral part of our daily lives and make how we interact with technology and conduct business more efficient and transparent.