What are Decentralized Applications(DApps)
Decentralized Applications are censorship resistant programs built for end-users globally, They enable the transfer, custody and exchange of digital assets in a permissionless environment with almost no requirements for identity verification.
While DApps are handled and stored on the blockchain they are also built to facilitate certain business functions at the same time improving the accuracy, efficiency, and effectiveness of operations in the Digital Economy.
In simple terms, DApps brings basic financial services available to your reach, With DApps everybody has the ability to manage and finance their digital currencies, without barriers.
What are the Common Features of Decentralized Applications(DApps)
In order for a project to fall under our definition of “decentralized finance” a project would be required to have the following attributes:
- Censorship Resistance: Token custody, transfer and exchange cannot be restricted by a handful of players responsible for maintenance of the network.
2. Programmable Assets: Assets that are handled on the product should have all the native attributes of conventional tokens on a decentralised network.
2. Pseudonymity: Decentralized financial applications should be able to leverage web 3.0 standards for signing of transactions and authentication. Thereby, drastically reducing the need for AML/KYC and making financial tools inclusive to a broader audience.
4. Transparent and Trustless: The current custodian of an asset in a DeFi project should always be verifiable on the blockchain and its custody should only involve smart contracts and wallets. There should not be large, centralized, exchange owned wallets in a DeFi product. In the presence of a smart contract, the code for the same should be open-sourced.
5. Permissionless: Decentralized finance should allow anyone to create applications without the need for applications being approved by large, central banking authorities. With decentralized finance, we have our first true shot at making a permissionless world.
6. No central point of Failure: DApps can’t be shut down, because there is no server to take down. Data in a DApp is decentralized across all of its nodes. Each node is independent; if one fails, the others are still able to run on the network. There are a number of decentralized database systems on which to build DApps that allow for this feature, such as Interplanetary File System, BitTorrent, and independent DHTs.
7. Opensource: Having the app be open source made it possible for the network to achieve the transparency it needed to improve itself with developer contributions and grow trust among its users to give its coins real-world value. Open sourcing your dapp will gain the trust of potential users. Anyone can fork your dapp, but they can’t fork your development team. Users want to get behind the people best suited to maintain the dapp, and often, those people tend to be the original developers.