It’s not always clear what it means to “build on the blockchain” or which parts of a product or service will live on on the blockchain. DApps are trendy and new, so it’s tempting to ride the hype and think that any new application can or should be a DApp! The point to remember is that blockchain is good at recording transactions and certain types of metadata. In a previous article, we wrote more about what DApps are. Now, here are some examples of DApps that are currently available or being built.
The gaming industry is a natural fit for the blockchain because most games are centered around gaining experience points or game assets. Players spend many hours in games earning digital items that are highly coveted, and may have significant value. Additionally, players spend time and energy customizing their gaming character, who may grow to have great significance to the player, and to their social circle in the game. Until the blockchain, there was no safe way to “exit” a gaming ecosystem and bring your valuables with you, or port your character to a new gaming world. These two challenges are something DApps can solve well. While the games themselves do not live on the blockchain, any interaction that marks milestones, achievements, or acquiring and losing objects in the game can be forwarded or outsourced to the blockchain to be recorded. This means that rather than trusting company servers to guard your achievements, they can live directly on the blockchain and will persist even after the game or company no longer exists. These can be stored as NFTs (Non Fungible Tokens) or FTs (Fungible Tokens). On Cardano these can also be stored as metadata at very little cost.
When gaming assets or milestones live on the blockchain, users can form marketplaces and economies around buying, trading, and selling gaming assets - independent of the game company.
Within the Cardano ecosystem (via Project Catalyst), $750k has been awarded to teams to start creating the foundation required to support gaming.
Some teams hard at work:
DAOs (Decentralized Autonomous Organizations)
We’ve written about DAOs in depth here: DAOs Demystified: Organization that puts people first | Lido Nation. The tldr: DAO is a way to organize work that gives decision-making power to the users of a blockchain. The notion of DAOs is in its infancy, but there are a number of groups that are working in that direction: DripDropz is a token-distribution platform that recently held a vote on the blockchain which allowed its token-holders to vote on technical changes to the platform. When Sundae Swap launched their token exchange platform, they held a vote that allowed ADA holders to choose which server-vendors will help run their decentralized infrastructure.
Neither of these teams call themselves DAOs, but both are working towards a future where proposals can come from anyone in their communities. In that future, anyone could create a self-executing proposal that would automatically be executed by the blockchain if voting and other conditions are met.
Within the Cardano ecosystem, $1.5M has been awarded within the last 12 months to teams to start to think about the foundation required to support Decentralized Autonomous Organizations.
Some teams hard at work:
Exchanges are online portals that let you trade digital assets directly with another person without the need for a middleman. You put your item into a Smart Contract and set the terms; someone else may come along and fulfill the term. When they do, the locked asset is automatically released to them. A common example of this happens with NFTs: NFT goes in. Sit and wait. Someone comes along and agrees with the price They pay for the NFT by depositing the asking amount into the Smart Contract The contract releases funds to the seller, and the NFT to the buyer - instantaneously.
In the example above, the contract could also be time-locked and allow multiple people to deposit varying amounts. When the time is up, the higher bidder gets the prize, the seller gets the coins, everyone else gets their deposits back.
jpeg.store, cnft.io, and tokhun.io are popular exchanges for nfts. Minswap, Sundae Swap, Wingriders, Milkyswap, and Muesliswap are popular destinations for swapping Fungible Tokens. Here are some teams hard at work at building even more exchanges in the Cardano ecosystem:
Simple event driven contracts
The examples above represent some of the first real-world examples of DApps. Future examples will appear at the speed of human innovation. Any software flow that says “if this happens, then do that”, could use the blockchain to add trust, self-custody, and transparency. Through its “DApps and Integrations” Challenge, Cardano’s Project Catalyst has awarded over $2.96M to 63 teams to build DApps. Here are some simple event-driven DApps being worked on by some of those teams:
Is my problem a good fit for a DApp?
When developing software solutions for Cardano, Etheruem, or any blockchain, it’s not a given that every application should be a DApp.
Sometimes building on a blockchain network can mean creating centralized applications that add accessibility, provide education, or deliver interfaces to help people use, visualize, or understand data on the blockchain. If your DApp does not facilitate decisions by means of voting, produce original assets, have in-application currency, or need to hold blockchain assets, there is a good chance a centralized application that simply has “query access” to the blockchain will suffice.
Traditionally, transactions between people and entities rely on “third party” services to provide trust and security. Now, we can use blockchain technology to remove the cost and risk of third party intermediaries. If this relates to what you are building, welcome to the blockchain! We recommend you checkout Cardano’s Blockchain platform to see if it's a good fit (Technical Overview: Plutus Architecture)[https://www.lidonation.com/en/posts/technical-overview-plutus-architecture]. When you’re ready to start building, also take a look at (Project Catalyst)[https://www.lidonation.com/en/posts/cardanos-project-catalyst-experiments-in-decentralized-autonomous-organization-dao] to see if it can help provide seed funding!