Create a Decentralized Application in 5 Steps

A DApp, short for Decentralized Application, is an application that runs on a decentralized network, typically a blockchain. Unlike traditional applications hosted on centralized servers, DApps leverage the decentralized nature of blockchain technology to offer various advantages such as transparency, security, and trustlessness.

Features of Dapp

• Decentralization: DApps are developed on distributed blockchain systems, where data and application logic are dispersed among a number of nodes. By doing away with a central authority or middleman, decentralization increases transparency, lowers the possibility of censorship, and removes single points of failure.
• Open Source: DApps are frequently open source, enabling the community to freely view and audit the code. The fact that anybody may review, contribute to, and suggest improvements to the codebase, encourages transparency, collaboration, and creativity.
• Smart Contracts: Smart contracts, which self-execute and have the conditions of the agreement written directly into the code, are used by DApps. On the blockchain, smart contracts make it possible to execute complicated logic, enforce corporate rules, and automate distrustless transactions.
• Tokenization: Tokens are frequently used by DApps to symbolize wealth, ownership, or access privileges inside the application. Tokens can be built as custom tokens using smart contracts or as native tokens to the blockchain platform. Within the DApp ecosystem, tokenization provides incentives, rewards, and economic models.
• Consensus Mechanisms: DApps rely on consensus techniques to accomplish network-wide agreement and transaction validation. Proof of work (PoW), delegated proof of stake (DPoS), and other well-known consensus procedures are examples. Security, scalability, and energy efficiency are impacted by the consensus technique utilized.
• Immutability and Auditability: DApps use blockchain’s immutability to make sure that once data is recorded, it cannot be changed or tampered with. This permits verifiable and transparent record-keeping and gives a trustworthy audit trail.
• Off-Chain Storage: While the blockchain stores critical data and smart contracts, some dapps utilize off-chain storage solutions to store larger files, such as media or user-generated content. These off-chain storage systems may include decentralized storage platforms like IPFS (InterPlanetary File System) or traditional centralized cloud storage providers.
• Peer-to-Peer Networking: In some dapp architectures, peer-to-peer (P2P) networking protocols are employed for direct communication between users, bypassing the need for centralized servers. P2P networking can enable decentralized messaging, file sharing, and real-time interactions within the dapp.

Pros of Dapps

• Decentralization: Dapps are built on decentralized networks like blockchain, which means they are not controlled by a single central authority. This eliminates the need for intermediaries and central servers, making them resistant to censorship and single points of failure.
• Transparency: Dapps typically operate on transparent and auditable blockchain networks, allowing anyone to view the code and transaction history. This transparency promotes trust and accountability within the application.
• Security: Blockchain technology provides robust security mechanisms such as cryptographic encryption and consensus algorithms, making dapps inherently secure against fraud, tampering, and hacking attempts.
• Data Privacy: Dapps can offer enhanced privacy by giving users control over their data. Since dapps store data on a decentralized network, users can have greater ownership and control over their personal information.
• Token Economy: Many dapps utilize tokens or cryptocurrencies as a medium of exchange within the application. This can create a token economy where users can be rewarded for their contributions or can access specific features by using tokens. Token economies can incentivize user engagement and foster a sense of community.

Cons of Dapps

• Scalability: One of the challenges faced by dapps is scalability. Blockchain networks can have limitations in terms of transaction throughput and processing speed. As a result, dapps may experience slower performance compared to centralized applications, especially during periods of high network congestion.
• User Experience: Dapps often require users to interact with cryptocurrency wallets, manage private keys, and navigate complex interfaces. This can create a barrier to entry for non-technical users and result in a less intuitive user experience compared to traditional applications.
• Governance Challenges: Decentralized applications typically involve decentralized governance mechanisms, where decision-making is distributed among network participants. While this promotes decentralization, it can also lead to challenges in achieving consensus and making efficient decisions for the application’s development and evolution.
• Limited Functionality: Dapps may have limited functionality compared to their centralized counterparts. The decentralized nature of dapps can impose certain constraints, such as storage limitations and computational restrictions, which may affect the range of features and capabilities they can offer.
• Regulatory Uncertainty: Dapps often operate in a regulatory grey area, as they may not fit neatly into existing legal frameworks. This can create uncertainty regarding compliance requirements and legal implications, both for the developers of dapps and the users.

Examples of Dapp

1. Uniswap

Uniswap is a decentralized exchange protocol built on the Ethereum blockchain. It enables users to trade Ethereum-based tokens directly from their wallets without the need for intermediaries or order books. Uniswap utilizes automated liquidity pools and employs an algorithmic market-making mechanism.

Key features include:

• Token Swapping: Users can easily swap between different ERC-20 tokens.
• Liquidity Provision: Users can contribute their tokens to liquidity pools and earn fees in return.
• No Order Books: Uniswap relies on an automated pricing mechanism to determine token exchange rates.
• Decentralized Governance: The protocol is governed by UNI token holders who can propose and vote on changes to the platform.

2. CryptoKitties

CryptoKitties is a collectible and breeding game built on the Ethereum blockchain. It allows users to buy, sell, and breed unique digital cats represented as non-fungible tokens (NFTs).

Key features include:

• NFT Collectibles: Each CryptoKitty is a unique, non-interchangeable digital asset with its own attributes and characteristics.
• Breeding Mechanics: Users can breed their CryptoKitties to create new, genetically unique offspring with inherited traits.
• Ownership and Trading: Users have full ownership and control over their CryptoKitties, allowing them to buy, sell, and trade them with others.
• Community Marketplace: CryptoKitties operates a decentralized marketplace where users can discover, buy, and sell their collectible cats.

3. MakerDAO

MakerDAO is a decentralized lending and stablecoin protocol running on the Ethereum blockchain. It allows users to generate a stable cryptocurrency called DAI by collateralizing their Ethereum assets.

Key features include:

• Collateralized Loans: Users can lock up their Ethereum as collateral to generate DAI stablecoins.
• Stability Mechanism: A system of smart contracts automatically adjusts the supply of DAI to maintain its peg to the US dollar.
• Decentralized Governance: Users who hold MKR tokens have voting rights to make decisions on protocol parameters and upgrades.
• Open Market: The DAI stablecoin can be used for various purposes, such as trading, remittances, and decentralized applications.

4. Augur

Augur is a decentralized prediction market platform running on the Ethereum blockchain. It allows users to create and participate in prediction markets on various real-world events.

Key features include:

• Market Creation: Users can create prediction markets for a wide range of topics, such as sports, politics, and finance.
• Trading Shares: Participants can buy and sell shares in prediction markets, reflecting their beliefs about the outcome of the event.
• Outcome Reporting: Augur relies on a decentralized Oracle system where users report on the outcome of events to resolve markets.
• Incentivized Reporting: Users who provide accurate reports are rewarded, while inaccurate reporters lose their reputation and potentially face financial penalties.

5. Brave Browser

Brave Browser is a privacy-focused web browser that incorporates blockchain technology. It allows users to browse the internet while blocking intrusive ads and trackers. It also includes a built-in cryptocurrency wallet and a reward system for users and content creators.

Key features include:

• Ad Blocking: Brave Browser automatically blocks unwanted ads and trackers, enhancing user privacy and browsing speed.
• Basic Attention Token (BAT): Brave integrates the BAT token, which users can earn by opting into privacy-respecting ads or by contributing directly to content creators.
• Brave Rewards: Users can distribute BAT tokens as tips to their favorite websites and content creators.
• Secure Browsing: Brave prioritizes user privacy and security by default, aiming to create a more transparent and fair digital advertising ecosystem.

Architecture of Dapp

A decentralized application, or dapp, often has a number of important parts and layers. Here is a thorough description of the architecture:

1. Blockchain Layer

The blockchain layer, which offers the decentralized infrastructure for the application, is at the heart of a dapp’s architecture. A distributed ledger called the blockchain is used to record and verify transactions and the performance of smart contracts. Ethereum, EOS, and TRON are the three most popular blockchain platforms for dapp development.

2. Smart Contracts

The business logic and guidelines of the dapp are specified by smart contracts, which are self-executing programmes stored on the blockchain. Typically, they are created using blockchain platform-specific programming languages, such as Ethereum’s Solidity. The foundation of the dapp is made up of smart contracts, which uphold trust and encourage user-app interaction.

3. Consensus Mechanism

The blockchain’s consensus process governs how transactions and modifications are approved and verified. In dapp architectures, Proof of Work (PoW), Proof of Stake (PoS), and Delegated Proof of Stake (DPoS) are often used consensus procedures. The blockchain network’s integrity and security are guaranteed by the consensus mechanism.

4. User Interface (UI) Layer

The front end of the dapp, or user interface layer, is where users can interact with the program. It might be a desktop program, a mobile app, or a web interface. Through APIs or specialized libraries like Web3.js, the UI layer can interface with the blockchain layer and allow users to execute actions and view data stored on the blockchain.

5. Middleware Layer

Between the user interface layer and the blockchain layer, the middleware layer serves as a link. It is made up of many parts that make communication and data processing easier. In dapp architectures, common middleware elements include:

1. Blockchain API: It provides an interface to interact with the blockchain, enabling read and write operations, querying smart contract data, and submitting transactions.
2. Identity and Access Management: This component manages user authentication, access control, and privacy features, ensuring secure user interactions with the dapp.
3. Oracles: Oracles are external data sources that supply off-chain information to smart contracts, allowing dapps to interact with real-world data and events.

Tech Stack for Building a Dapp

Building a dapp, or decentralized application, requires a combination of technologies and tools. Here’s an in-depth overview of the tech stack commonly used for dapp development:

1. Blockchain Platforms

The choice of blockchain platform depends on the specific requirements of the dapp. Ethereum is widely preferred for dapp development due to its robust ecosystem, smart contract support, and large developer community. Other platforms like EOS, TRON, and Binance Smart Chain also offer dapp development capabilities.

2. Smart Contract Development

Smart contracts define the business logic of the dapp and are typically written in platform-specific programming languages. Solidity is the most popular language for Ethereum, while other platforms may have their own languages like EOSIO’s C++ or TRON’s Solidity-compatible language. Development frameworks like Truffle or Hardhat facilitate smart contract compilation, testing, and deployment.

3. User Interface (UI) Development

The dapp’s user interface layer can be developed using web technologies, mobile frameworks, or desktop application frameworks. Some commonly used options include:

• Web Development: HTML, CSS, and JavaScript frameworks like React, Angular, or Vue.js are popular for web-based dapps. Libraries such as Web3.js or ethers.js enable blockchain communication.
• Mobile Development: Cross-platform frameworks like React Native or Flutter facilitate the development of mobile dapps. Mobile-specific libraries or frameworks enable interaction with the blockchain.
• Desktop Development: Electron, a framework utilizing web technologies, allows the creation of cross-platform desktop apps.

4. Middleware and APIs

Middleware components and APIs enable communication between the dapp’s UI and the blockchain layer. Common tools and libraries include:

• Web3.js: A JavaScript library for Ethereum interaction and smart contract communication.
• ethers.js: Another JavaScript library providing a clean API for Ethereum interaction, including deployment, calling, and event handling of smart contracts.
• IPFS: The InterPlanetary File System, a decentralized storage protocol, enables off-chain file storage and retrieval.
• Oracles: Chainlink, Band Protocol, or custom-built oracles provide access to external data sources, enabling dapps to interact with real-world information.

5. Development Tools and Testing

Development tools and testing frameworks ensure code quality and security. Common tools include:

• Truffle: An Ethereum development framework simplifying smart contract compilation, deployment, and testing.
• Ganache: A personal Ethereum blockchain for local development and smart contract testing.
• Hardhat: A flexible development environment and testing framework for Ethereum smart contracts.
• Solhint/Solium: Linters for Solidity that identify code issues and enforce best practices.

6. Backend Infrastructure

Additional backend infrastructure may be required based on dapp requirements. This can involve traditional server-side technologies or decentralized backend solutions:

• Traditional Backend: Node.js, Python, Ruby, or other backend frameworks can be used if centralized server-side processing or data storage is required.
• Decentralized Backend: Decentralized solutions like IPFS for storage or OrbitDB for databases provide distributed data storage and retrieval capabilities

7. Token Standards and Development

If the dapp incorporates its native token or cryptocurrency, adherence to specific token standards is necessary. For example, ERC-20 is commonly used for fungible tokens on Ethereum, while ERC-721 is prevalent for non-fungible tokens (NFTs).

Steps to Create a DApp

Below are the steps to create a dapp:

1. Define the Problem and Solution

Identify the problem your DApp aims to solve and determine how blockchain technology and decentralization can provide a unique solution. For example, let’s consider a supply chain management DApp. The problem could be inefficient tracking and verification of products. The answer would involve creating a transparent and immutable ledger for tracking product movement.

2. Choose the Blockchain Platform

Select a suitable blockchain platform that aligns with your DApp requirements. Some blockchain platform examples:

• Ethereum: Use the Ethereum blockchain to create smart contracts and leverage its broad community support and ecosystem.
• Hyperledger Fabric: Utilize Hyperledger Fabric, an enterprise-grade blockchain platform, for permissioned networks and privacy-focused supply chain solutions.
• Polkadot: Explore Polkadot for interoperable and scalable blockchain solutions, enabling communication between multiple blockchains

3. Design and Develop Smart Contracts

Create and construct the smart contracts that are required for your DApp. Depending on the blockchain platform selected, a variety of programming languages can be used to create smart contracts:

• Ethereum: Use Solidity, the most popular language for Ethereum smart contracts.
• Hyperledger Fabric: Develop chain code (smart contracts) using Go, JavaScript, or other supported languages.
• Polkadot: Leverage Substrate, a framework for building blockchain platforms, and its supported languages like Rust or C++.

4. Develop Front-End and Back-End Components

Create the user interface (UI) and user experience (UX) design for your DApp’s front end. You can use different tech stacks for front-end and back-end development:

Front-end:

• Web-based DApp: Use HTML, CSS, and JavaScript frameworks like React, Angular, or Vue.js.
• Mobile DApp: Develop native applications using Swift for iOS or Kotlin for Android, or consider cross-platform frameworks like React Native or Flutter.

Back-end:

• Ethereum: Interact with Ethereum nodes and smart contracts using web3.js or ethers.js libraries.
• Hyperledger Fabric: Develop server-side components using programming languages like Node.js or Go, and utilize Hyperledger Fabric SDKs.
• Polkadot: Leverage the Substrate framework and its supported back-end languages like Rust, JavaScript, or C++.

5. Test and Deploy

Test your DApp thoroughly to make sure it operates as intended and can handle a variety of situations. Test the front-end interactions, smart contracts, and general system behavior. Deploy your smart contracts to the selected blockchain platform after testing is finished. Launch your DApp at this point to make it accessible to users.

Remember that your specific requirements, scalability requirements, team knowledge, and resource availability may affect the technology stack you choose. It’s crucial to investigate and assess the top frameworks and tools for your DApp development based on the blockchain platform you’ve chosen.

How Much Does it Cost to Build DApp?

As a beginner, the cost of building a dapp can vary depending on the complexity of the application and the resources you have available. If you’re learning and developing the dapp yourself, the main costs will be your time and learning resources rather than hiring a development team. However, there may still be some expenses to consider. Here are a few cost considerations for beginners:

1. Development Tools: You might need to use certain development tools and software, some of which may have associated costs. However, there are many free and open-source tools available that can be used for dapp development.
2. Test Networks: When developing and testing your dapp, you may need to interact with test networks provided by the blockchain platform you’re using. While these test networks are usually free, you should be aware of potential transaction costs and limitations specific to each platform.
3. Cloud Services and Hosting: If you choose to deploy your dapp on the blockchain or utilize cloud services for development or testing purposes, there may be associated costs. However, there are often free tiers or affordable options available for developers starting out.
4. Community and Networking: Engaging with the blockchain development community, attending meetups, or participating in conferences and events might incur some costs for membership fees, event tickets, or travel expenses. However, these costs are not mandatory and can be managed based on your preferences and budget.