From Uniswap to Axies, these 6 DApps blew us away in 2020
With the crazy comeback of the crypto market this year, more and more casual investors around the world are starting to understand the potential of blockchain technology. For example, decentralized applications gained notable traction over the course of 2020. The total blocked volume on all decentralized exchanges rose from under $ 40 million in December 2019 to a whopping $ 26 billion in just nine months.
However, it is important to understand the core concepts behind decentralized finance (DeFi) and decentralized applications (DApps) as many routinely use the two terms interchangeably. While both innovations share a lot in common – such as using blockchain technology, eliminating third-party intermediaries, and giving users complete control over their finances – there are some key differences that should be noted.
A key difference is that DeFi is a form of DApp, with DeFi mainly dealing with financial use cases, while general DApps have a wide range of uses that are not just limited to finance. For example, DApps can be used to develop gaming and gambling platforms and education systems, or even to create novel tools such as privacy-conscious internet browsers like Brave.
Why DApps, you ask?
From a usability point of view, DApps can be provided for the same purposes that normal smartphone apps are suitable for. The difference, however, lies in the fact that unlike most Android and iOS-based applications, where you sign shady agreements that essentially force you to forego your basic privacy rights, DApps gives users a variety of transparency-related issues Offers advantages – along with other advantages such as:
- They are open source: As the term “decentralized” implies, DApps are open source, ie their source code is freely available online and can be redistributed or modified by anyone who so wishes. This enables users to quickly identify any bugs that may be present in their underlying software, thereby greatly improving the overall security of the platforms.
- They offer attractive incentives: A core aspect of many DApps is that they offer users various incentives, typically in the form of interest income, air drops, or other usage-based rewards. A big reason the concept of “crop farming” received so much attention in 2020 is that crypto investors could earn rewards simply by using various unlicensed liquidity protocols.
- You are reliable: DApps are developed using consensus mechanisms that help their networks make agreements about the status of the blockchain. As a result, it is practically impossible to tamper with such platforms.
The first entry on our list is a breeze as it almost single-handedly brought the concept of decentralized exchanges to the consciousness of the global crypto community. In the simplest sense, Uniswap is a protocol built on top of the Ethereum ecosystem to exchange ERC-20 tokens without the need for buyers and sellers to generate demand.
And while most casual crypto enthusiasts / investors continue to use centralized trading platforms like Binance, OKEx, and others due to their general accessibility and brand reputation, there are a few key areas where Uniswap has completely changed the game including:
Ownership of assets: The original idea behind Bitcoin (BTC) and most other cryptocurrencies was to allow individuals to create, transfer, and hold their assets without the need for an intermediary financial agency such as a bank. In this regard, the crypto of a centralized exchange is basically in the care of a third party unless they transfer their funds to a cold wallet – an option that owners have to pay a sizeable handling fee for!
When it comes to Uniswap, users don’t even give up on custody of their assets for a single moment, largely thanks to the use of smart contracts that execute trades in a completely trustless manner.
User friendliness: To initiate an exchange via Uniswap, you only need to select the assets between which an exchange should be facilitated. Click the “Connect Wallet” button and confirm the relevant transaction. That’s it! Once that’s done, the purchased tokens will appear on their own account without the assets ever having to go through a third-party platform.
Advanced liquidity options: Perhaps the most unique aspect of Uniswap, as well as most of the other decentralized exchanges, is that users can play an active role in their pools of liquidity by wagering their coins, which gives them a cut in the platform’s trading margin.
InterPlanetary search engine
With search data manipulation increasing these days, many tech-savvy individuals are realizing that the internet is no longer the decentralized utopia they once thought they were.
As of today, some players like Google, Bing, and Baidu have complete monopoly over the global search engine sector. In addition, there are unclear data ownership policies that lead to recurring issues like customer information leaks and ad tracking.
InterPlanetary Search Engine (IPSE) is a decentralized search engine based on the EOS blockchain and using the InterPlanetary File System. This enables users to surf the Internet while being incentivized to share unique content.
The main benefits of using the platform include the seamless protection of consumer data thanks to IPSE’s asymmetric encryption technology and the need for explicit user approval for all ad tracking activities that are rewarded.
Further advantages are:
- The entire content available on IPSE is permanently traceable and encrypted throughout.
- IPSE does not use a “bid-based ranking” system to ensure that search results are never influenced by the whims of a few money players.
- By storing data in a decentralized manner, hackers can never get full access to the system because they cannot attack all nodes at the same time.
For quite a number of people, the word “DApp” is still an instant link to CryptoKitties, a game first launched in 2017 that allows players to breed, buy, and eventually sell digital cats that come in the form of non-fungible ERC-721 tokens being represented .
In the simplest sense, a non-fungible token or NFT can be viewed as a cryptographic asset that represents a store of value that is inherently completely unique, so that it cannot be mutually exchanged for another NFT. In CryptoKitties, for example, every cat is different and cannot be directly exchanged for another, as every cat has its own characteristics such as behavioral traits, physical appearance, etc.
While it sounds youthful, CryptoKitties has remained hugely popular since its inception, accounting for a whopping 10% of Ethereum’s daily transactions at one point. As a result, it is considered by many to be the perfect entry point for those curious about crypto into the world of decentralization and NFTs.
CryptoKitties offers players nothing more than entertainment, but its continued popularity has had a massive impact on the development of the NFT space as well as the wider Ethereum ecosystem.
While CryptoKitties pioneered the NFT space, Rarible continues the movement. Rarible is a community-owned NFT marketplace that uses its RARI governance token to power its platform.
On paper, Rarible allows users to easily secure digital collectibles using blockchain technology. Sounds ordinary, doesn’t it? However, what really sets Rarible apart from other platforms like OpenSea, a peer-to-peer marketplace for rare digital items, is the fact that Rarible aims to become far more than a platform for securing and trading art and digital collectibles.
Instead, Rarible aims to enable individuals to create NFTs – or more precisely, “like new” – which could be a huge boon for content creators of all kinds in the future, especially as issues like copyright, piracy, and data plagiarism continue to affect the world of digital media.
With Rarible, for example, an artist can sell his creations such as books, music albums or films with non-verifiable tokens that are stored in a blockchain, which eliminates the possibility of data falsification. Another benefit of this technology is that artists can give potential buyers a glimpse of their content, such as a preview or trailer, and only then release all of the content once a purchase has been successfully completed.
Since the team behind Rarible gained considerable traction this year, it has placed great emphasis on making the platform fully autonomous so that it can operate on a community governance-based model.
Axie Infinity is the second game to add to our list. It is heavily based on the Pokemon universe. For example, players can collect and raise fantasy creatures known as “Axies”. Unlike CryptoKitties, where you can only collect and trade your collectibles, individuals in the Axie Infinity world can team up their pets to battle other users, adding a real element of action and adventure to the mix.
The popularity of this game has grown so much over the past year that it has become the most played game in the Ethereum ecosystem. The NFT-based digital pastime currently has 18,000 active users per month.
Due to its rapid growth, the team behind this project tested new ways to scale the game and recently even launched the public test network of its own sidechain called “Ronin”. Ronin’s first validator was Paris-based video game giant Ubisoft.
Sixth and last on our list is Steemit, a social DApp primarily intended for bloggers. It is built on the Steem blockchain and allows verified users to create blog posts on any topic they want, as well as adding tags, photos or other items to their accounts for various incentives.
If, for example, one’s own contributions are interesting and can collect enough “likes”, users receive rewards in the form of Steem, Steem Dollar (SBD) or Steem Power (SP) tokens.
Steem is like any regular cryptocurrency, so it can be powered up in Steem Power tokens, traded for Steem Dollars, transferred to other accounts, or simply traded across various cryptocurrency exchanges.
Steem power tokens, on the other hand, are integrated into the platform and serve as a measure of how much influence a user has on the Steem network. The more Steem Power a user has, the more power they have to influence the value of posts or comments they rate positively and thus receive curation rewards.
After all, Steem Dollars are stable value currency brands that are pegged to the US Dollar on a one-to-one basis. Steem dollars can be traded for Steem or transferred to other accounts for various commercial purposes.