DeFipedia Blog

Our DeFi experts demystify and explain decentralized finance, how it works, and how to capitalize on its growth potential.
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Dapps7 Best Risk-Free Decentralized Exchanges in 2023The rise of DeFi (decentralized finance) over the last few years has been incredible. Emerging in 2018, the DeFi space is currently worth around $50 billion, which shows its astronomic increase in popularity. Namely, the rise of DeFi is primarily thanks to the benefits it offers over TradFi (traditional finance). So, with the rise of DeFi, more decentralized exchanges (DEXs) have also appeared. Namely, a decentralized exchange is a platform that allows you to buy, sell, and trade cryptos without any intermediary. This is different than centralized exchanges (CEXs), which have some form of authority governing them. Now, with so many teams creating a crypto exchange, how do you know which one to choose? Read to learn about the best decentralized exchange apps you can use. What Is a Decentralized Exchange App? A decentralized exchange app is an interface that connects you, the user, to the DEX's network. Without an app, you'd have a difficult time working with the protocol behind the DEX, as you'd have to write complex lines of code and open smart contracts yourself. With a DEX app, however, you can just connect your existing wallet and enjoy the benefits of DeFi. This isn't the case with centralized exchanges. At a CEX, you'd have to register, fill in all of your personal information, and wait for your approval. This is one of the main differences between DEX vs. CEX. Moreover, buying crypto on a decentralized exchange is just as easy as buying it at a CEX. It's also worth mentioning that the rise of such projects in the DeFi space has also led to the creation of platforms with new and interesting features. For example, you can now use a decentralized stock exchange like Uniswap to trade directly with other users. Now that we've covered the basics, let's go over the best decentralized exchange apps for 2023. » Confused about which kind of crypto wallet you need? Learn about the difference between hot and cold wallets. 1. 1inch Launched in May 2019 on the Ethereum blockchain, 1inch is a DEX aggregator that will always search for the best rates for your market swaps and trades. Of course, this doesn't come without a cost, as 1inch will charge a small fee for every action you take, though it's still a lot cheaper than opening positions with worse rates. Moreover, the platform is packed with useful features, like earning through liquidity pools and farms, aggregating, trading, and even bridging (i.e. connecting to other blockchains). So, who should use 1inch? We think that 1inch is well-suited for all types of crypto users, but beginners might find it easier to use a different one with a simpler interface. Still, it's an overall amazing platform that offers nearly everything you can expect in a DEX app. Pros One of the best rates on the marketNo withdrawal or deposit feesAllows for complex order typesWide range of tokens to choose from Cons Might be difficult for absolute beginners » Want to learn more? Read our 1inch Exchange review. 2. Uniswap Uniswap is one of the biggest decentralized exchanges on the market, and the reasons behind its popularity are not difficult to see. Namely, this platform offers an all-in-one solution for DeFi, including buys, sells, swaps, and liquidity pools. Even though it doesn't offer complex features like stop limits and buy orders, it's still more than enough for any beginner. Moreover, Uniswap is incredibly easy to use, and any beginner will have an incredibly easy time navigating through it. However, keep in mind that the fees at Uniswap might be slightly higher than other DeFi apps, but they're still on the low end. Pros Liquidity pools with high-interest returns. Incredibly beginner-friendly. Has more than enough features for beginners. Cons Might have slightly higher fees than other platforms. 3. dYdX dYdX is a decentralized exchange app and lending platform that allows you to buy, sell, and trade cryptos. However, unlike the other platforms on this list, dYdX has a noticeable feature it stands out for - it offers up to 5x leverage on trades, which can be incredibly useful if you'd like to magnify your profits. So, if you're looking for an app where you can margin trade crypto, then dYdX should be your go-to. Additionally, the platform is also known for its low fees, as they only charge a 0.1% taker fee and nothing for maker trades. dYdX is also available on both iOS and Android devices, which makes it one of the most accessible decentralized exchanges on the market. However, we wouldn't recommend it to beginners, as you would need to have at least some experience in DeFi to properly use it. Pros Low fees. Allows trading with leverage. Offers liquidity pools where you can earn interest. Is available on mobile devices. Cons Only 3 assets are supported for margin trading and swaps. Can be difficult for beginners. 4. PancakeSwap PancakeSwap is one of the most popular decentralized exchanges on the Binance Smart Chain. The platform was launched in September 2020 and has been growing in popularity ever since. Just like 1inch, PancakeSwap is an automated market maker, which means that it uses pools to provide users with the best rates. In addition to pools, the platform also offers NFTs, staking, and yield farming, which allows users to earn outside of their trading. PancakeSwap also has a very low trading fee of 0.2%, which is lower than the majority of DEXs out there. Unfortunately, the platform is only available on the Binance Smart Chain, so you would need to have a BSC-compatible wallet to use it. This means that you cannot work with ERC20 tokens like DOGE or USDC. Pros Offers staking, yield farming, and NFTs. Higher returns than most decentralized exchanges. Wide range of crypto assets. Cons ERC20 tokens like DOGE and USDC are not available, as the platform is built on BSC. 5. Kyber Swap Kyber Swap is a decentralized exchange app that's known for its low fees and wide range of assets. The platform supports over 100 different cryptos, which is more than what most DEXs have to offer. Moreover, it also allows users to buy crypto with a credit or debit card, which is not something you see often. Furthermore, Kyber Swap also has a very user-friendly interface, which makes it perfect for beginners. The only downside is that it's not as secure as the other platforms out there, as KyberSwap suffered a $265,000 exploit in September 2022, which is why many users have left it. Pros Supports more than 100 assets. Is beginner-friendly. One of the only DEXs that feature credit card payments. Cons Not as secure as other platforms. 6. Bancor Bancor is a decentralized exchange that's available on both the Ethereum and EOS blockchains. The platform is one of the older ones out there, as it was launched back in June 2017. Even though it's older than the other exchanges on this list, Bancor is still one of the most popular DEXs out there. The platform is known for its low fees, as they only charge a 0.1% fee on all trades. Moreover, Bancor is also very user-friendly, which makes it perfect for beginners. However, one large downside of the platform is that it doesn't have the best liquidity, which can be an issue when trading. Pros Low fees. Is user-friendly. One of the oldest and most reliable DEXs out there. Cons Occasionally has low liquidity, which might be a problem for closing positions. 7. SushiSwap SushiSwap is a decentralized exchange that was launched in September 2020. The platform is very similar to Uniswap, as it's an automated market maker that uses pools to provide users with good rates for swaps. However, SushiSwap has a bit more feature-rich than Uniswap, as it has liquidity farms, NFTs, and complex order types. Despite all of these features, SushiSwap isn't better than Uniswap. This is because the platform has higher gas fees than its competitors and is harder to navigate. So, we would only recommend it to those who are experienced in DeFi and are ready to pay a slightly higher fee for the features. Pros Offers a wide variety of ERC20 tokens. Has a lot of features, including NFTs and complex order types. Offers high-return staking. Cons Can be difficult for beginners. Has higher fees than most DEX apps. We know that picking the right DEX is hard, which is why we did most of the hard work for you by covering seven of the best DEX apps out there. Still, remember that the crypto space is constantly changing, so make sure to do your own research before putting your money on any platform. In our opinion, the majority of people will have the best experience with Uniswap and 1inch for ERC20, and PancakeSwap for BSC. Nevertheless, remember to only invest what you're willing to lose, as the crypto markets can be very volatile.
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DappsNavigating Urbit: Your Digital HomesteadIn recent years, digital homesteading has been slowly increasing in popularity as a new approach to living. Fewer people now live in rural areas than ever, effectively drying up the communities that once flourished. This is exactly what digital homesteading is trying to do—provide residents of rural places equal opportunities and connections as those living in urban places. People have been consistently moving to bigger and more urban areas for more possibilities, but now, with digital homesteading, people from all communities can have access to the same privileges—regardless of their location. This means solving issues of equal market opportunities, social connections, and acquiring knowledge—which is exactly what Urbit, a Web3 project, seeks to solve. How Does Urbit Work? Urbit is a digital homestead that offers cloud and community-based services that are available on all devices—including phones, tablets, laptops, and desktop PCs. It's a full-service solution that offers useful functionalities for both communication and commerce. Urbit is built on blockchain technology. It intends to give all of its users full digital autonomy which will allow users to keep their data and digital assets securely stored without requiring any third parties. This is a big move in the direction of privacy, decentralization, and security. So, what is the technology behind this digital homestead? Urbit runs on a peer-to-peer network where every user has a specific identity key for authentication. However, unlike many similar services, Urbit does not give the user's data away to a third party. Thanks to blockchain technology, Urbit's infrastructure allows for a fully decentralized way of operating, ensuring that all users have a right to privacy of their data. Why Use Urbit? As a digital homestead, Urbit seeks to solve many of the issues that the modern Internet has. In simple terms, Urbit's primary goal is to create a digital environment where discussion and collaboration are the norm. However, one might ask, why use Urbit when you can use the Internet for the exact same thing? Urbit solves the privacy and centralization issues that the Internet currently has. This includes: Reducing spam data. Minimizing cybersecurity attacks like data breaches. Solving the issue of malware fully. Giving users the right to control where their data goes. Therefore, the system behind Urbit is incredibly secure. Everyone's connection on the network is fully encrypted, with both public and private keys to safeguard the user's personal data. Once a user becomes a part of Urbit, they get an Urbit ID, which acts as their login information. These IDs are created on the Ethereum non-fungible token standard (named ERC721) and are stored as non-fungible tokens (NFTs), meaning that no one (except the users themselves) can see, access, or modify the data. Explaining Urbit's Infrastructure Urbit has a unique and somewhat complex network infrastructure called Azimuth, and it's divided into distinct network nodes with unique names: stars, galaxies, and planets. Each has specific responsibilities, making the network run seamlessly. For example, the planet nodes are for everyday use and simple tasks, like handling user requests. Since there are over 4 billion planet nodes, the network isn't likely to have any latency issues or outages. On the other hand, stars and galaxies serve as the building blocks of Urbit's network infrastructure. Whenever new updates are made, these nodes adequately redistribute to every other node through an encrypted connection. Stars and galaxies also handle user routing i.e. directing the user to the node they need. So, how can you join Urbit as a user and become a part of the network? There are two main ways to get an identity to join Urbit: Join the Urbit community and ask for one to be generated for you. Go to an NFT exchange that's part of the ERC-721 standard and purchase one. After getting it, you can store your ID in the form of an NFT on your Ethereum address and use Urbit's client interface, Bridge, to directly interact with the entire network. Conclusion Urbit is an incredibly ambitious project that has the potential to revolutionize the way networks work—as long as it remains consistent. Currently, it's the only large-scale project that seeks to revolutionize digital homesteading by implementing a Web 3.0 infrastructure with a peer-to-peer network. The project is quite promising and viable, as it seeks to solve many of the issues that the Internet faces today. Only time will tell how the Urbit project will be executed, though we're confident the team behind it will find a scalable and efficient way to make the project thrive into mass adoption.
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DappsHow Alethea Is Enabling the Integration of NFTs and AIIt's no secret that non-fungible tokens (NFTs) have taken the crypto world by storm in recent years. These tokens are financial securities stored on the blockchain, and unlike other types of securities, the ownership of an NFT is public and can be easily proven. Although an NFT usually comes in the form of art, these tokens can be anything that's digitally stored. Thanks to the revolutionary technology of storing ownership on a public ledger such as the blockchain, the NFT industry's value is nearing $20 billion as of August 2022. Blockchain technology has now become more scalable than ever, allowing teams of developers to create and distribute intelligent NFTs (named iNFTs) and store them on a blockchain. The first iNFT sold for nearly $500,000 in July 2021, and the popularity of such NFTs is only set to rise. What Is Alethea AI? Alethea AI is a massive, first-of-its-kind project that's building a fully decentralized protocol with an Intelligent Metaverse. This Metaverse is set to be inhabited by iNFTs, where everyone can join and interact with them. Moreover, users who join this Metaverse can use the intelligent protocol to create and earn from their iNFTs in a virtual world known as Noah's Ark. How Does Alethea AI Work? As mentioned previously, Alethea AI is a decentralized protocol that uses the power of artificial intelligence (AI) to create and trade intelligent iNFTs. The protocol comprises two parts: the Metaverse and Noah's Ark. The Metaverse is a virtual world where users can create, own, and interact with iNFTs. This is done through smart contracts, which are contracts stored on the blockchain and automatically execute when certain conditions are met. For example, when two users agree to trade their iNFTs, the smart contract will automatically execute the trade and transfer ownership of the iNFTs accordingly. Noah's Ark is a virtual world that coexists with the Metaverse but is specifically designed for iNFTs. In other words, Noah's Ark is a virtual universe only for artificially intelligent life. In this world, iNFTs can be bought, sold, or traded in the Metaverse. The only difference is that Noah's Ark uses a different set of rules and regulations specifically for iNFTs. What Can You Do With Alethea AI? There are endless possibilities of what you can do with Alethea AI. Below are some of the most popular use cases: For Users Create your own iNFT With Alethea AI, anyone can create their own iNFT. All you need is an Ethereum wallet, and your NFT will be stored on the blockchain forever. Sell your iNFT Once you've created your iNFT, you can put it up for sale at any NFT marketplace (like OpenSea, for example). Normally, the price of your iNFT will be determined by the market. Trade your iNFT If you don't want to sell your iNFT, you can trade it with another user in the Metaverse or Noah's Ark. Interact with iNFTs Alethea AI also allows you to interact with iNFTs in the Metaverse. For example, you can leave comments on an iNFT or even give it a "like." For Developers Build on top of the protocol Alethea AI's protocol is open-source, which means that developers can build on top of it. This is a great way to create new and innovative applications that use iNFTs. Earn revenue Developers can also earn revenue by creating dApps that use iNFTs. This is done using Alethea AI's "Developer Reward" system. How Can I Invest in Alethea AI? Anyone can invest in Alethea AI's token as long as they have an Ethereum wallet. The token goes under the name Alethea Artificial Liquid Intelligence Token (ALI) and, as of August 2022, is currently trading at $0.018. You can buy the ALI token at multiple centralized and decentralized exchanges, including Gemini, Uniswap,, and CoinEx. The token reached its all-time high of $0.14 on the 4th of February 2022, so investors are looking at a potential 670% rise in profits if it reaches its all-time high again. Conclusion Alethea AI is a revolutionary project set to change the landscape of the NFT industry. With its intelligent protocol, anyone can create and trade iNFTs in the Metaverse or Noah's Ark. If you're looking to invest in a promising project with high potential, then Alethea AI is a project you should keep an eye on.
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DappsReaping the Benefits of FlexaFlexa is leading the pack in pure-digital payments, offering fast and fraud-proof services and supporting over 99 cryptocurrencies over 12 blockchain networks. The collateral token that encourages decentralized transactions is AMP, and stakers are rewarded with AMP for each transaction completed on the network. Flexa is a unique payment network compared to its rivals. It offers an open-source network that combines decentralized and centralized tactics and methods. These are integrated with merchants' payment solutions, decreasing the restrictions and obstacles associated with the entry for merchants, wallets, etc. The Origins of Flexa Flexa was founded by Tyler Spalding, Sach Kilgore, Daniel McCabe, and Trevor Filter in 2018. Tyler has been in the crypto world since 2011. Based in New York, their idea was to bring innovation and versatility to traditional payment networks. They also wanted to address the impact of expensive transaction fees and eliminate fraud by using smart contracts on the network. Why Is Flexa Unique? Flexa introduces a whole new way for people from all walks of life to use Flexa Payment products, and they do so in a cost-effective, affordable manner. Moreover, this platform is compatible with more cryptocurrencies and networks than any other digital currency payment provider on the market. Regulation is typically the primary roadblock for payment solutions due to the harsh regulations surrounding crypto in place today. This company switches things up, being fully licensed and legally authorized to operate nationwide. In addition, Flexa is AML/KYC compliant and ensures that partnerships and participation with the platform are secure and legal. The goal is to expand the platform by including Payments API for customized integrations later on. In addition, Flexa suggests they will be recruiting new strategic partnerships, users, apps, and wallets to achieve net-zero emissions within three years. The Benefits of Flexa Flexa is one of the first networks to offer 100% digitally-secured transactions. Let’s look at a couple of the main benefits of using this service. Privacy Traditional banks and payment card transactions require sending sensitive customer account info through the network, while when using Flexa, you don’t have to do this. Instead, each Flexa payment begins and finishes with a unique, specialized authorization key that cannot be reversed or decrypted. Speed and Security Since Flexa is pure-digital, it makes transactions and payments incredibly quick and safe. When the digital auth code is captured at point-of-sale, the payment amounts are transferred from the customer's account balance. Then it's converted by Flexa. As a result, every Flexa-authorized transaction is 100% guaranteed. Flexa’s payment services facilitate immediate, affordable, and fraud-proof settlements online, in-store, and via mobile apps. Who Uses Flexa? Various stores have already adopted Flexa as a payment option for their consumers, such as Nordstrom, Lowe’s, GameStop, Whole Foods, Barnes & Noble, Petco, and more. Flexa has even partnered with Regal Cinemas, offering movie fanatics the option to pay for tickets and goods with various cryptocurrencies. New capabilities are to be announced in regard to Flexa’s point-of-sale partners, including prospective integrations with Blackhawk Network, Citcon, Aurus, Clover, GK, Shopify, and many more. AMP-supported wallets include Coinbase, Gnosis Safe, Exodus, Krystal, Guarda Wallet, Metamask, Rainbow, and Trust Wallet. As you can see, many have chosen to trust Flexa. How Does Flexa Work? Flexa customers can spend their Shiba Inu digital currency, for example, by sending it via the SPEDN wallet on a smartphone app. They can then use it to pay via the Flex Code on their screen. The merchant can then scan the Flex Code, similar to Apple Pay or QR code, and the amount is paid in either convertible virtual currency or their fiat currency of choice. Flexa will deduct the payment amount from the SPEDN wallet. Why Should I Use Flexa? Flexa is merchant-friendly. Users find that some of the advantages of Flexa include overall reduced costs, elimination of fraudulent activity, faster settlement, and access to the expanding crypto market. In the United States, about 92% of retail payments happen offline in physical stores. (1) As Flexa grows, more individuals will be able to benefit from their collective spending power, and will be doing so in ways that were once unreachable by high fees and unequal rates. Flexa only enables payments from crypto, which are naturally borderless. Flexa is planning to facilitate foreign payments to support crypto's borderless, empowering nature.
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DappsBest dApps for Making Money DeFi taps into blockchain technology's decentralized, democratic make-up to make financial services accessible to more people. It is now rapidly expanding to more blockchain ecosystems and services with a new resilience. Many dApps left the ground along the way, having failed to prove their relevance in the market that is increasingly becoming competent. Some projects have successfully empowered people to monetize their technical and strategic skills. In this article, we look at the best dApps in the market and how you can make money with them. How You Can Make Money With dApps There are multiple ways to make money with dApps. It primarily depends on the services offered by these platforms. The most popular DeFi services are lending, borrowing, yield farming, liquidity providing, derivative trading, and prediction markets. Let’s take a look at each of these services and see how you can monetize them. Crypto lending and borrowing Crypto lending is a financial service where participants lend cryptocurrencies in exchange for annual interest. Lending and borrowing dApps are a great source of passive income. The transactions on lending and borrowing protocols are overseen by smart contracts without the involvement of third-party financial institutions. There are no fixed rules or norms that tie together lending and borrowing dApps. They create money markets for different crypto assets. As a lender, you can add your idle cryptocurrencies to the liquidity pools listed on these dApps. On the other hand, borrowers take collateralized loans from the pools by paying an annual interest. The attractive interest rate on crypto lending and borrowing dApps comes with other perks when compared to traditional platforms. For example, you need not submit paperwork here. Your credit score is not taken into account. It is a hedge against market volatility. Then again, if you’re locking your funds for a fixed term, it will prevent you from seizing market opportunities. Yield farming Yield farming allows you to make multiple layers of income from your crypto savings. There are many different types of yield farming strategies. Some dApps like DEXs and lending protocols incentivize participants to add tokens to liquidity pools governed by smart contracts. In exchange, you are given a share of the trading fees, accompanied by LP (liquidity pool) tokens. You can then stake these LP tokens to other pools to earn more rewards. You can also make use of the arbitrage opportunities in DeFi to make money via dApps. A popular yield generation strategy is to switch between lending and borrowing pools, exploiting the interest rates. Popular yield farming platforms are Compound, Uniswap, Synthetix, Curve, and Aave. Derivative trading DeFi derivatives are crypto assets that derive value from an underlying asset, which could be cryptocurrencies, stocks, commodities, etc. While DeFi derivatives are relatively new, derivatives have been an integral part of the global economy for a long time. They are mostly used to offset losses. Currently, they are sold on dApps as a way to generate income and mitigate the risk involved in crypto trading. Crypto derivatives allow you to profit from the price movements of a diverse range of assets without actually buying or holding them. Prediction markets DeFi has made its way into prediction markets too. These are basically decentralized marketplaces where you trade the outcome of events. If your prediction is correct, you earn a share of the reward pool. If it’s wrong, you lose your money. Since the settlements are self-executed on these dApps, they enjoy a significant edge over their traditional counterparts. They have great growth potential in the coming years. Most Successful dApps The most successful dApps are DEXs, lending and borrowing platforms, derivative platforms, and prediction markets. A few examples include Uniswap, PancakeSwap, SushiSwap, Compound, Aave, Augur, and Synthetix. How to Find the Best dApps for Making Money Social media platforms like Twitter and Reddit are the best places to find dApps. Look up relevant hashtags like #DeFi, #crypto, and #dApps to find the trending projects. If the community is active, add the project to your watchlist. Go through the project’s official website and pitch deck to get a brief understanding of its relevance. If it interests you, read the white paper and learn about the project in detail. It will give you information about the products and their unique value propositions, tokenomics, vision, mission, revenue streams, and team. You can also search for reviews published about the project online. Don’t forget to ensure the technical competence of the dApp before using it. While all dApps are prone to vulnerabilities, responsible projects will have their smart contracts audited by a reputed company. Best dApps to Make Money With We recommend investing in projects with ambitious visions, realistic roadmaps, and competent teams. They have a better chance of providing consistent returns in the long run.
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DappsUnderstanding the Scalability TrilemmaSince its inception, blockchain technology has been a fascinating topic. Thanks to the way blockchain technology works, we can find adequate use scenarios for it in almost every area of finance, art, healthcare, and more. Now that you’ve understood that this technology is remarkably useful, it’s important to understand its three main pillars–decentralization, security, and scalability. Decentralization is probably the most important pillar of blockchain technology, as the entire concept is based on not having a central authority to oversee anything. Security should not be taken lightly either, as no one wants to use a network that has questionable safety. Lastly, we have scalability, which refers to the blockchain’s potential for future growth and the way it currently handles transactions. Bigger scalability means more features, faster transactions, and lower costs. With these three features ahead of us, let’s talk about what this trilemma is all about. What Is the Scalability Trilemma? The blockchain scalability trilemma is relatively simple to understand; when a network’s pillar is improved, the other two pillars suffer. So, the trilemma can be summarized like this: A blockchain network (let’s take Bitcoin as an example) must choose to sacrifice either security, decentralization, or scalability. If a network’s scalability gets improved, it becomes less secure and less decentralized. Of course, it will be much easier to deploy apps and add new features on a scalable network, but it will be much more prone to attacks. On the other hand, if security receives the best treatment, the network will be significantly less scalable and have a lower level of decentralization (since its transactions and operations will be more tightly controlled). This is also a problem when it comes to blockchain immutability, which is a core concept of blockchain. Lastly, blockchains that have a higher level of decentralization are significantly less secure and are much more prone to hacks and attacks. This is against the principle of blockchain transparency. Why Scalability Is Important for Blockchain As one of the three main pillars of blockchain technology, scalability is much more than the pure transactional output and the ability to add new features. Scalability also refers to a network’s ability to provide a solid experience for its users; faster transactions, smaller fees, better features, etc. An example of this is the development of a smart contracts blockchain, which is a section that Ethereum has pioneered. While decentralization is the main pillar that blockchain was built on, security is important to ensure that every user is safe in the network, and scalability by itself ensures that the network will provide a good experience for its users. As many blockchain experts have said in the past, scalability is absolutely essential for mass adoption. Advantages of Scalability Scalability Leads to Significantly Better and More Features In the original model of the blockchain network, the blockchain was just a chain of different blocks (hence the name) that runs on different nodes with no central figure over them. It was a simple concept, but now, in 2022, scalability allowed us to add our own applications on the same blockchain (called dApps), or even place an entirely new blockchain on the current blockchain (which is how most altcoins are made). Scalability Leads to an Overall Faster Network Networks that are more scalable make processes on the blockchain run significantly faster. A process on the blockchain often refers to how quickly a new block is processed and generated. For example, a less scalable network like Bitcoin has an average transaction speed of 30-120 minutes, while Tether’s TRC20 network performs a single transaction usually in less than 2 minutes. Scalability Leads to Smaller Gas Fees The original concept of blockchain is the following: for a transaction to be processed on the blockchain, a block must be “mined” (i.e. generated) for it. This block is usually generated by “miners” who have to waste a lot of time and electricity to create the block. A highly scalable network like Tether processes a new transaction for about $1,20, while the average ERC20 gas fee (Ethereum’s main network) is $10–$15. Disadvantages of Scalability Improving Scalability Is Time-Consuming for Developers For a network to become more scalable, the team behind it must continuously work on it. This means manually adding new features, improving the old ones by increasing efficiency, and changing some of the algorithms. Making a Network More Scalable Increases the Room for Errors As mentioned above, for a network to become more scalable, the team behind it must be ready to invest hours of work into improving it. This could lead to minor errors in the nodes connected by the chains, which could lead to bigger downtimes, slower transactions, and vulnerability to attacks. Potential Solutions Thankfully, the scalability trilemma can be solved with the help of a couple of different approaches. We’ll describe the most convenient ones below: Sharding Sharding is one of the most popular methods used for scaling networks like Litecoin and the Ethereum blockchain, which is primarily based on dividing transactions and blocks into small data “shards”. These transactions and information blocks are then also evenly distributed among blocks, efficiently transferring addresses, balances, and amounts among the network. Sidechains A sidechain is an incredibly simple concept that has drastically improved the performance and Bitcoin scalability of PoW networks like BTC and ETH. In simple terms, a sidechain is another transactional chain that runs on the side of the main blockchain and is used to ease its load. Sidechains, however, have proven to be slightly underwhelming when it comes to security, as the transactions and blocks processed on them are not private, and are not as secure as the ones on the blockchain. Nested Blockchains A nested blockchain is the opposite concept of the sidechain. If the sidechain is a chain that runs alongside the blockchain and is only used when the blockchain is overwhelmed, a nested blockchain performs the tasks and then delegates them to the main blockchain. This approach has had success in the OMG Plasma project and can be used in other PoW networks like Ethereum and Bitcoin as well.
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DappsHow to Interact With dAppsDecentralized applications, or dApps in short, are applications in every sense of the word with one big difference: they exist and are run entirely on the blockchain. Unless you've been away from the crypto space, you've probably heard about blockchain technology—the technology behind all cryptocurrencies. Unlike most apps that we use in our day-to-day lives that exist primarily on the internet, a dApp exists on the blockchain. This means that it holds all the benefits that blockchain has to offer, that is, decentralization, security, and scalability. dApps have no central authority governing them; they only have a team of developers behind them that put them on the blockchain. This is only a brief overview of dApps. To learn everything there is about them, continue reading. How Do dApps Work? dApps work slightly differently from the other apps we use in our everyday lives. Let's take Instagram as an example. It is owned and operated by a company and thus, is centralized. It also runs on the world wide web, which is not the case with dApps. dApps work on a peer-to-peer network like the blockchain. There are many ways to access such a network, but the apps on it are usually open source and public, so they're not hard to work with. A primary benefit of dApps is that anyone and everyone can make a dApp, put it on the blockchain, and even earn money from the dApp. For example, a team of developers can decide to create a new Instagram, but they'll put it on the blockchain and make it fully decentralized. Why Do People Use dApps? There are many reasons why people enjoy using dApps, but their primary benefits are: Decentralization Decentralization means there is no government body or powerful company to influence any of the dApp's users' actions. Consequently, it's impossible to control the app.There is little to no downtime Unlike traditional applications, which are on the world wide web, dApps are on the blockchain, which is a peer-to-peer network. Even if many of the computers (nodes) on the network stop working, dApps will continue to be available due to the sheer size of the blockchain and how it works.dApps are open source Since dApps are public and available to everyone, users are encouraged to use dApps and even implement their own ideas on the blockchain with smart contracts. Every day, new and better dApps are built on the blockchain because everyone can access them, and anyone can contribute. Can dApps Be Accessed on Mobile? A significant advantage of dApps is that they can be accessed from a mobile device. Most of them have a responsive user interface (meaning that it works well for both PCs and mobile devices) and are easy to access. To access dApps on the blockchain, you'll need a Web3 browser or tool like MetaMask. You can use other tools to access dApps from mobile, like the Trust Wallet app, Argent, or Coinbase's dApp browser. Which Browsers Support dApps? Whether it's from a mobile device or a personal computer, there are various options when it comes to accessing dApps. Consider using one of the following browsers or tools for interacting with and using dApps: DharmaArgentMetaMaskOsirisCoinbaseGuarda What Can You Use to Interact With dApps? Keep in mind that most dApps are built on the Ethereum blockchain. So, to start interacting with them, you need to have at least some Ethereum in your wallet (keep in mind that dApps can also be on other networks that are alternatives to Ethereum, like the BNB smart chain). There are many ways you can go about acquiring Ethereum, but the easiest one is to go to an exchange, buy some ETH with your debit card, and transfer it to your own personal wallet. Ethereum transfer times can range from a few minutes to days. Then, once you've got some Ethereum, you need to have a dApp browser/tool to start accessing and navigating through the blockchain. There are many ways to go about it—some of which we mentioned above—though we would recommend going with a reputable dApp browser like the Trust Wallet, Osiris, or MetaMask. Once you've got these both ready, you're well on your way to interacting with dApps on the blockchain. All you need now is the dApp's address (which is usually just like a traditional URL), and you can start using it for whatever means you need it.
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DappsHow to Make a dAppDecentralized applications (dApps) are programmed to execute specific instructions in isolated environments. DApps can take any frontend, but the application's backend is stored on the blockchain. This means that data on a dApp cannot be changed and remains forever. The logic of a dApp is written as a smart contract in a Turing complete programming language. The most common of these languages is Solidity. DApps interact with decentralized blockchains using a JSON-RPC layer called Ethereum Web 3.0 API. Most browser-based dApps use Web 3.0 SDKs like Web3.js. No central authority can control a dApp, which makes it censorship-free. Anyone with the right skill and resources can deploy and launch a dApp on a blockchain. This person only incurs transaction fees on computations. DApps work as soon as they are deployed on the blockchain. Therefore, developers test dApps on a testnet before deploying them on the main network of the blockchain. Unlike centralized applications, dApps work perfectly without a trusted third-party facilitating transactions. Factors to Consider Before Building a dApp Before building your dApp, do some research to understand what you want and what potential users need. Simple considerations include the devices and platforms used by your target users, the problem you intend to solve, and how your dApp will be different. It is also important to consider the legal implications properly before launching a dApp. The first technical point to consider when building a dApp is the preferred blockchain. The blockchain where a dApp is built can impact the application's userbase. Most developers prefer platforms like Ethereum because it has a large userbase, which means a large number of potential customers. Other considerations like scalability, interoperability, and programing language are also on the list. Next, you need to consider the application's user interface (UI). The UI allows users to interact with your dApp. The frontend of most dApps is built using popular Javascript frameworks, such as React, for one-page websites. How to Build a dApp Your dApp needs to be connected to a blockchain like Ethereum. To achieve this, you need to write a smart contract that defines the business logic of the dApp and deploy it on Ethereum. We will need a few dependencies to build our dApp. They are: Node Package Manager This is a dependency from Node.js. Type $ node -v in the command prompt or windows terminal to see if it is installed. Truffle Developers build the client-side of the dApp in Truffle. It provides an environment for writing codes and testing smart contracts, and you can install it using the $ npm install -g truffle command. Ganache It comes with over ten external account addresses preloaded with 100 test ETH. Metamask A Web 3.0 wallet and extension allows us to interact, settle fees, and deploy our contracts on Ethereum. Your IDE should highlight syntax. If not, download the Ethereum syntax highlighting dependency. Next, we need to install the truffle pet-shop-box and create a directory for contracts, node modules, migration, and truffle.js files. After that, you can start writing the smart contract. The following examples are adapted from an election dApp tutorial by DApp University. The code snippets are simple illustrations of some crucial steps in dApp development. Next, number the file inside the migration directory in order of execution and create a variable called an election. Add it to the manifest of deployed contracts as shown in the next image. After that, run your migration from the command line and open the Truffle console to interact with the smart contract. Next, we create a public mapping and function. Assign candidates to the mapping. Then, add two candidates by calling addCandidate. The resulting smart contract should look like this. Next, test the contract and start building the client-side of the application. To do this, set up Web 3.0 by configuring it in the initWeb3 function. Fetch the deployed instances of the smart contract inside the Web 3.0 function. Find the value of the smart contract inside the function and assign some value to interact with it. Finally, use the render function to lay out content on the dApp user side page using smart contract data. Add the voting function and check that the value is incremented when the function is called. Build the client-side of the dApp by adding an HTML form with corresponding Javascript code. Now, test all aspects of the dApp. The final step is to deploy on a live blockchain, but make sure there is no bug in your smart contract code. Note that the complete codes are not shown here, as this is meant to give you an idea of how a smart contract is built. It is a process that starts from writing the smart contracts in the native programming language to building the client-side of the application. After that, test your dApp properly before deploying it on a live blockchain. The cost of building a fully functional dApp varies. The average cost of building a DApp is about $38,000 to $91,000. Simple dApps are the least expensive, costing between $70,000 and $100,000. Medium dApps cost between $120,000 and $170,000. Complex dApps cost between $200,000 and $250,000. It takes approximately 3 to 6 months to build a dApp. Top Platforms for Building dApps Ethereum Ethereum is a decentralized public blockchain designed to support the deployment of smart contracts in a runtime environment called the EVM. As the first blockchain that supports the development of dApps, Ethereum remains a force in the decentralized applications space. Even though the programming language isn’t easy, there are many developers able to write and deploy smart contracts and dApps on Ethereum. Solana Solana is a webscale blockchain that revolutionizes the idea of consensus in blockchains using a proof-of-history mechanism. Solana has been dubbed the Ethereum killer. It is most popular among developers because of its high scalability, with up to 700,000 transactions per second. Solana also uses a well-developed architecture, and its dApp programming language, Rust, is more secure, complex, and reliable than others. Binance Smart Chain Developers launch new projects on Binance Chain or Binance Smart Chain at a breathtaking pace. BSC is a proof-of-stake authority blockchain and fork of Ethereum. It uses a virtual environment similar to EVM and the same programming languages. Hence, Ethereum developers can also build projects on BSC. The platform's popularity is tied to one of the largest centralized exchanges globally. Over $75 billion is traded daily on Binance. Binance is the parent company behind BSC. Cosmos Cosmos is the internet of blockchains and is fast becoming a hub for developers. It features an ever-expanding ecosystem of dApps, primarily due to its IBC protocol that lets developers exchange assets across blockchains. Cosmos also provides Tendermint core as its consensus engine and an application layer known as the Cosmos SDK.