{{Short description|Type of computer application}} {{about|trustless decentralized applications (DApp)|other types of decentralized applications|Distributed computing}} {{multiple issues| {{More citations needed|date=June 2019}} {{Outdated as of | year = 2021 | month = 03 | day = 7 | last updated = March 7, 2021 }} }} A '''decentralised application''' ('''DApp,'''<ref>{{Cite web |title=CVC Money Transmission Services Provided Through Decentralized Applications (DApps) |url=https://www.fincen.gov/sites/default/files/2019-05/FinCEN%20CVC%20Guidance%20FINAL.pdf |access-date=2019-05-09 |website=FinCEN}}</ref> '''dApp''',<ref>{{Cite web |last= |first= |date= |title=IEEE DAPPS 2020 |url=https://ieeedapps.net/ |url-status=live |archive-url=https://web.archive.org/web/20200426224502/https://ieeedapps.net/ |archive-date=2020-04-26 |access-date=2020-08-15 |website=ieeedapps.net}}</ref> '''Dapp''', or '''dapp'''<ref>{{cite web |title=Introduction to dapps |url=https://ethereum.org/en/developers/docs/dapps/ |website=ethereum.org |access-date=14 February 2025}}</ref>) is an application that can operate autonomously, typically through the use of smart contracts, that run on a blockchain or other distributed ledger system. DApps provide some function or utility to its users with less human intervention. Control over DApps is distributed to holders of tokens that represent ownership. Without any one entity controlling the system, the application is therefore decentralised.<ref>{{Cite web |title=Technical introduction to dapps |url=https://ethereum.org/developers/docs/dapps/ |access-date=2026-04-06 |website=ethereum.org |language=en}}</ref>
== Definition ==
DApps are conventionally open-source. Some DApps that are fully closed-source and partially closed-source also exist.<ref name="Wu-2021">{{Cite journal |last1=Wu |first1=Kaidong |last2=Ma |first2=Yun |last3=Huang |first3=Gang |last4=Liu |first4=Xuanzhe |date=2021 |title=A first look at blockchain-based decentralized applications |url=https://onlinelibrary.wiley.com/doi/abs/10.1002/spe.2751 |journal=Software: Practice and Experience |language=en |volume=51 |issue=10 |pages=2033–2050 |arxiv=1909.00939 |doi=10.1002/spe.2751 |issn=1097-024X |s2cid=202541736}}</ref> Bitcoin, the first cryptocurrency, is an example of a DApp.<ref>{{Cite web |date=August 17, 2021 |title=Where did Bitcoins come from |url=https://timesofindia.indiatimes.com/business/cryptocurrency/where-did-bitcoins-come-from/articleshow/85390449.cms |access-date=2022-08-06 |website=The Times of India |language=en}}</ref>
== Usage == DApps can be classified based on whether they operate on their own block chain, or whether they operate on the block chain of another DApp.
=== Smart contracts === {{main|Smart contract}} Smart contracts are programs which maintain data on the blockchain and to execute operations.<ref name="Wu-2021" /> Multiple smart contracts can be developed for a single DApp to handle more complex operations.<ref name="Wu-2021" /> Over 75% of DApps are supported by a single smart contract, with the remainder using multiple smart contracts.<ref name="Wu-2021" />
DApps incur fees paid to the validators of the blockchain, known as "gas", due to the cost of deploying and executing the DApp's smart contracts.<ref name="Wu-2021" /> The amount of gas required of a DApp's functions is dependent on the complexity of its smart contracts.<ref name="Wu-2021" /> A complex smart contract of a DApp that operates on the Ethereum blockchain may fail to be deployed if it costs too much gas, leading to lower throughput and longer wait times for execution.<ref name="Wu-2021" />
=== Operation ===
Consensus mechanisms are used by DApps to establish consensus on the network. The two most common mechanisms to establish consensus are proof-of-work (POW) and proof-of-stake (POS).<ref name="Johnston">Johnston, D., Yilmaz, S. O., Kandah, J., Bentenitis, N., Hashemi, F., Gross, R., ... & Mason, S. (2014). The General Theory of Decentralized Applications, DApps.</ref>
Proof-of-work utilises computational power to establish consensus through the process of mining.<ref name="Hazari-2019">{{Cite journal|last1=Hazari|first1=Shihab S.|last2=Mahmoud|first2=Qusay H.|date=2019|title=Comparative evaluation of consensus mechanisms in cryptocurrencies|journal=Internet Technology Letters|language=en|volume=2|issue=3|pages=e100|doi=10.1002/itl2.100|s2cid=169801236|issn=2476-1508|doi-access=free}}</ref> Bitcoin uses the proof-of-work mechanism.<ref name="Hazari-2019" /> Proof-of-stake is a consensus mechanism that supports DApps through validators that secure the network by having a stake and percent ownership over the application.<ref name="Hazari-2019" /> [[File:Icarus Bitcoin Mining rig.jpg|thumb|A Bitcoin mining rig composed of dozens of graphics processing units ]] DApps distribute their tokens through three main mechanisms: mining, fund-raising and development.<ref name="Johnston" /> In mining, tokens are distributed as per a predetermined algorithm as rewards to miners that secure the network through transaction verification.<ref name="Johnston" /> Tokens can also be distributed through fundraising, whereby tokens are distributed in exchange for funding in the initial development phase of the DApp, as in an initial coin offering.<ref name="Johnston" /> Lastly, the development mechanism distributes tokens that are set aside for the purpose of developing the DApp through a pre-determined schedule.<ref name="Johnston" />
There are three main steps that always occur in the formation and development of any DApp: the publishing of the DApp's whitepaper, the distribution of initial tokens, and the distribution of ownership.<ref name="Johnston" /> Firstly, the whitepaper is published, describing the DApp's protocols, features and implementation.<ref name="Johnston" /> Then, required software and scripts are made available to the miners and stakeholders that support the validation and fundraising of the network.<ref name="Johnston" /> In exchange, they are rewarded with the initial tokens distributed by the system.<ref name="Johnston" /> Lastly, as greater numbers of participants join the network, either through utilisation of the DApp or through contributions to the DApp's development, token ownership dilutes, and the system becomes less centralised.<ref name="Johnston" />
== Characteristics ==
DApps have their backend code running on a decentralized peer-to-peer network, as opposed to typical applications where the backend code is running on centralized servers. A DApp can have frontend code and user interfaces written in any language that can make calls to its backend.
DApps have been utilized in decentralized finance (DeFi), in which dapps perform financial functions on blockchains.<ref name="bloomberg.com">{{cite web |title=Why 'DeFi' Utopia Would Be Finance Without Financiers: QuickTake |url=https://www.bloomberg.com/news/articles/2020-08-26/why-defi-utopia-would-be-finance-without-financiers-quicktake |website=Bloomberg.com |language=en|date=26 August 2020}}</ref> Decentralized finance protocols validating peer-to-peer transactions, such as Aave Protocol, are expected to disrupt centralized finance and lower costs.<ref>{{Cite journal |last1=Ao |first1=Ziqiao |last2=Horvath |first2=Gergely |last3=Zhang |first3=Luyao |date=June 2022 |title=Are decentralized finance really decentralized? A social network analysis of the Aave protocol on the Ethereum blockchain |journal=Papers |url=https://ideas.repec.org/p/arx/papers/2206.08401.html |language=en}}</ref>
The performance of a DApp is tied to its latency, throughput, and sequential performance.<ref name="Cai-2018">{{Cite journal|last1=Cai|first1=Wei|last2=Wang|first2=Zehua|last3=Ernst|first3=Jason B.|last4=Hong|first4=Zhen|last5=Feng|first5=Chen|last6=Leung|first6=Victor C. M.|date=2018|title=Decentralized Applications: The Blockchain-Empowered Software System|journal=IEEE Access|volume=6|pages=53019–53033|doi=10.1109/ACCESS.2018.2870644|arxiv=1810.05365|issn=2169-3536|doi-access=free}}</ref> Bitcoin's system for transaction validation is designed so that the average time for a block on bitcoin's blockchain to be mined is 10 minutes.<ref name="Cai-2018" /> Ethereum offers a reduced latency of one mined block every 12 seconds on average (called Block Time). For comparison, Visa handles approximately 10,000 transactions per second.<ref name="Cai-2018" /><ref>{{Cite news|last=Lee|first=Timothy|date=2013|title=Bitcoin needs to scale by a factor of 1000 to compete with Visa. Here's how to do it: The Bitcoin network can only handle 7 transactions per second. Visa can handle 10,000.|newspaper=The Washington Post}}</ref> More recent DApp projects, such as Solana, have attempted to exceed that rate.<ref>{{cite news |last1=Prabhjote |first1=Gill |title=It's DeFi season and things got a little too hot to handle for Solana and Arbitrum One as transaction volumes ballooned |url=https://www.businessinsider.in/investment/news/solana-arbitrum-ethereum-networks-down-due-to-surge-in-transaction-volume/articleshow/86230919.cms |access-date=2 December 2021 |work=Business Insider India |date=15 September 2021 |archive-date=16 September 2021 |archive-url=https://web.archive.org/web/20210916061104/https://www.businessinsider.in/investment/news/solana-arbitrum-ethereum-networks-down-due-to-surge-in-transaction-volume/articleshow/86230919.cms |url-status=dead }}</ref>
Internet connectivity is a core dependency of blockchain systems, which includes DApps.<ref name="Cai-2018" /> High monetary costs also act as a barrier. Transactions of small monetary values can comprise a large proportion of the transferred amount.<ref name="Cai-2018" /> Greater demand for the service also leads to increased fees due to increased network traffic.<ref name="Donmez-2022">{{Cite journal|title=Transaction fee economics in the Ethereum blockchain|year=2022|url=https://onlinelibrary.wiley.com/doi/epdf/10.1111/ecin.13025|language=en|doi=10.1111/ecin.13025|last1=Donmez|first1=Anil|last2=Karaivanov|first2=Alexander|journal=Economic Inquiry|volume=60|pages=265–292|s2cid=244232599|url-access=subscription}}</ref> This is an issue for Ethereum, which is attributed to increased network traffic caused by DApps built on the Ethereum blockchain, such as those used by Non-fungible tokens (NFTs).<ref name="Donmez-2022" /> Transaction fees are affected by the complexity of a DApp's smart contracts, and by the particular blockchain.<ref name="Wu-2021"/>
== Trends == Ethereum is the distributed ledger technology (DLT) that has the largest DApp market.<ref name="Wu-2021"/> The first DApp on the Ethereum blockchain was published on April 22, 2016.<ref name="Wu-2021"/> From May 2017, the number of DApps being developed have grown at a higher rate.<ref name="Wu-2021"/> After February 2018, DApps have been published every day.<ref name="Wu-2021"/> Less than one fifth of DApps capture almost all the DApp users on the Ethereum blockchain.<ref name="Wu-2021"/> About 5% of DApps capture 80% of Ethereum transactions.<ref name="Wu-2021"/> 80% of DApps on Ethereum are used by less than 1000 users.<ref name="Wu-2021"/> On Ethereum, DApps that are exchanges capture 61.5% of transaction volume, finance DApps capture 25.6%, gambling DApps capture 5%, high-risk DApps capture 4.1%, and games capture 2.5%.<ref name="Wu-2021"/> By early 2025, NFTs and social dApps saw a 6–9 % increase in user engagement, even as DeFi dApp usage experienced modest decline.<ref>{{Citation |last=Wang |first=Jingyi |title=Taxation of Cryptoassets and Web 3.0 |date=2025-01-31 |work=Web3 Governance |pages=25–45 |url=https://doi.org/10.4324/9781032618975-4 |access-date=2025-07-29 |place=London |publisher=Routledge |isbn=978-1-032-61897-5}}</ref>
DApps have not achieved wide adoption. Potential users may not have the skill or knowledge to be able to effectively analyse the differences between DApps and traditional applications, and also may not value those differences. This skill and information can be difficult to access for mainstream users. Additionally, the user experience for DApps is often poor, as they are often developed to prioritize functionality, maintenance and stability.<ref>{{Cite book|last1=Glomann|first1=Leonhard|last2=Schmid|first2=Maximilian|last3=Kitajewa|first3=Nika|title=Advances in Artificial Intelligence, Software and Systems Engineering |chapter=Improving the Blockchain User Experience - an Approach to Address Blockchain Mass Adoption Issues from a Human-Centred Perspective |series=Advances in Intelligent Systems and Computing |date=2020|editor-last=Ahram|editor-first=Tareq |chapter-url=https://link.springer.com/chapter/10.1007%2F978-3-030-20454-9_60 |volume=965|language=en|location=Cham|publisher=Springer International Publishing|pages=608–616|doi=10.1007/978-3-030-20454-9_60|isbn=978-3-030-20454-9|s2cid=198325323}}</ref>
Many DApps struggle to attract users, particularly in their founding stages, and even those that attract widespread initial popularity struggle to retain it.<ref>Mathias Bärtl. "A statistical examination of utilization trends in decentralized applications." Frontiers in Blockchain, 2023. [https://www.frontiersin.org/journals/blockchain/articles/10.3389/fbloc.2023.1206330/full](https://www.frontiersin.org/journals/blockchain/articles/10.3389/fbloc.2023.1206330/full)</ref>
A notable example was the DApp ''CryptoKitties'', which heavily slowed down the Ethereum network at the height of its popularity.<ref>{{Cite web|url=https://techcrunch.com/2017/12/03/people-have-spent-over-1m-buying-virtual-cats-on-the-ethereum-blockchain/|title = People have spent over $1M buying virtual cats on the Ethereum blockchain| date=3 December 2017 }}</ref> ''CryptoKitties'' and another similar gaming-based DApp Dice Games have failed to attract similar traction since.<ref>{{Cite news|url=https://www.wsj.com/articles/cryptokitties-and-dice-games-fail-to-lure-users-to-dapps-11559122201|title = CryptoKitties and Dice Games Fail to Lure Users to Dapps|newspaper = Wall Street Journal|date = 29 May 2019|last1 = Vigna|first1 = Paul}}</ref>{{Update after|2021|3|5}}
== References == {{reflist}}
{{Cryptocurrencies}}
Category:Blockchains Category:Decentralization Category:Distributed computing