Decentralized Applications

Architecture
Back End, Security and Design Patterns
 What are dApps?
• A decentralized application is an application built on a decentralized network that combines a
smart contract and a front-end user interface.

• It is a type of distributed open-source software application that runs on a peer-to-peer blockchain

network.

• In decentralized applications, there’s no centralized database that stores the application state. It
means, unlike centralized applications the client-side application does not communicate to the
database instead it communicates directly to the blockchain.

• They are open-source which means that all the required changes are agreed upon by a consensus
of the majority of the users.

• Unlike traditional applications that rely on centralized servers, dApps are (partly or entirely) built
on decentralized technology.
• Decentralized applications (dApps) are transforming the digital landscape by offering users
autonomy, security, and transparency.

• These secure and unchangeable programs running on a decentralized network in combination

with traditional front-end and back-end technologies are what we call decentralized
applications (dApps).

• Below are the components of the dApp architecture:

a. Ethereum blockchain.
b. Smart Contracts.
c. Wallets.
d. Ethereum Virtual Machine (EVM).
e. Front-end.
Characteristics of dApps:

•Decentralization: At the core of dApps is the principle of decentralization. They are built
on blockchain technology, ensuring no single entity has control.

•Open Source: Typically, dApps are open source, meaning their source code is available to
everyone, promoting transparency and trust.

•Incentivization: dApps often have an in-built token system to reward users for contributing
resources or validating transactions.

•Protocol & Consensus Mechanism: Every dApp adopts a consensus mechanism (like
proof-of-work or proof-of-stake) to agree upon the validity of transactions.
Differences between dApps and Traditional Applications:
Feature Traditional Applications Decentralized Applications
(dApps)
Architecture Centralized servers and databases. Decentralized on blockchain
technology.
Data Control Controlled by a central authority Controlled by the users through
or organization. consensus mechanisms.

Data Storage Centralized servers. Distributed ledger (Blockchain).

Accessibility Depend on the organization’s Operate on a peer-to-peer

servers and infrastructure. network, are censorship-resistant.

Performance Generally faster and more May suffer from slower

efficient. transaction times and higher
costs.
Regulatory Compliance Must adhere to regional and Regulatory framework is often
global regulations. unclear or under development.
Feature Traditional Applications Decentralized Applications
(dApps)
Monetization Through ads, subscriptions, and in- Through tokens and cryptocurrency
app purchases. transactions.
Development Traditional software development Blockchain-specific development
frameworks and languages. frameworks and languages.

Maintenance Central authority is responsible for Community-driven, open-source

maintenance and updates. development and maintenance.

Security Vulnerable to single points of Enhanced security due to

failure. decentralized, encrypted ledger.

Privacy Often collect user data, sometimes Tend to have better privacy
with inadequate consent or features, with data control in the
transparency. hands of the users.

Scalability Can be scaled up by the Scalability can be a challenge due

organization by adding more to the limitations of blockchain
servers and infrastructure. technology.
Classification of dApps:
1. Based on Functionality

a. Financial dApps (DeFi)

Definition: These dApps focus on providing financial services without intermediaries.
Examples:
Decentralized Exchanges (DEXs): Platforms like Uniswap or SushiSwap for trading
cryptocurrencies.
Lending Platforms: Compound or Aave for decentralized borrowing and lending.
Stablecoins: Tether (USDT), DAI for stable-value tokens.

b. Infrastructure dApps
•Definition: These dApps provide underlying infrastructure services for other dApps.
•Examples:
• Blockchain Protocols: Ethereum, Polkadot.
• Oracles: Chainlink, Band Protocol.
c. Gaming dApps
•Definition: dApps built for gaming purposes, often integrating blockchain for in-game assets
and rewards.
•Examples:
• Play-to-Earn Games: Axie Infinity, Decentraland.
• Virtual Worlds: The Sandbox, Somnium Space.

d. Social dApps
•Definition: dApps designed for social interaction and content creation.
•Examples:
• Social Media Platforms: Steemit, Minds.
• Content Sharing: Audius (for music), DTube (for video).

e. Marketplace dApps
•Definition: These dApps facilitate buying, selling, and trading of digital assets.
•Examples:
• NFT Marketplaces: OpenSea, Rarible.
• General Marketplaces: Origin Protocol, District0x.
f. Identity and Privacy dApps
•Definition: dApps focusing on identity verification and privacy protection.
•Examples:
• Decentralized Identity: SelfKey, uPort.
• Privacy Tools: Tornado Cash (privacy for transactions).

2. Based on Underlying Technology:

a. Blockchain-based dApps
•Definition: dApps that run directly on blockchain platforms.
•Examples: Most dApps like Uniswap (Ethereum-based), or Filecoin (for storage).
b. Layer-2 dApps
•Definition: dApps that operate on Layer-2 scaling solutions built on top of a base blockchain to
improve scalability and reduce transaction costs.
•Examples:
• Optimistic Rollups: dApps like Synthetix.
• zk-Rollups: dApps like zkSync.

c. Cross-Chain dApps
•Definition: dApps designed to operate across multiple blockchain networks.
•Examples:
• Interoperability Platforms: Polkadot, Cosmos.
• Cross-Chain Exchanges: Thorchain.
3. Based on Use Cases

a. Governance dApps
•Definition: dApps that facilitate decentralized governance and voting processes.
•Examples:
• DAOs (Decentralized Autonomous Organizations): MakerDAO, Aragon.

b. Healthcare dApps
•Definition: dApps focused on healthcare data management and patient records.
•Examples:
• Medical Records: Patientory, MediLedger.

c. Supply Chain dApps

•Definition: dApps that track and manage supply chain operations.
•Examples:
• Supply Chain Management: VeChain, OriginTrail.
4. Based on Development Model

a. Smart Contract-based dApps

•Definition: dApps that rely on smart contracts to define their rules and functionalities.
•Examples: Decentralized finance platforms like Compound or lending protocols like Aave.

b. Decentralized Storage dApps

•Definition: dApps that use decentralized storage solutions to manage and store data.
•Examples:
• File Storage: IPFS, Storj.
• Document Management: Sia.

c. Permissioned dApps
•Definition: dApps that operate on a permissioned blockchain where access and actions are
controlled by a central authority.
•Examples:
• Enterprise Solutions: Hyperledger Fabric, Quorum.
5. Based on User Interface

a. Web-Based dApps
•Definition: dApps accessible through web browsers, usually built with JavaScript
frameworks.
•Examples: Most DeFi apps and NFT marketplaces.

b. Mobile dApps
•Definition: dApps designed for mobile platforms, often with specific mobile UI/UX
considerations.
•Examples: Mobile wallets like Trust Wallet, decentralized games