How to make a decentralized application in 8 steps? - Idea Usher
decentralized application

The world is switching to a newer and more advanced form of network: Web 3.0. The growth of the two most important components of Web 3.0, blockchain and cryptocurrencies, has decentralized communication, data transmission, and data processing. As a result, we have decentralized applications functioning over a distributed network of computers. These applications provide a high revenue-generating opportunity, so more and more entrepreneurs are willing to learn how to make a decentralized application.

The decentralized application market size is expected to grow from USD 10.52 billion in 2019 to USD 368.25 billion by 2027, at a CAGR of 56.1%.

Emergen Research
Number of dApps12,175
Number of smart contracts798,250
Number of daily unique users (average)More than 1 million
Top categoriesGambling, Exchange, High-risk, Game
Top dAppsPancakeSwap, Arc8, Compound, Splinterlands, Uniswap V2

This blog discusses decentralized applications, their development process, the required tech stack, and the industry’s top players.

What are decentralized applications?

what is a dapp

Before we discuss how to make a decentralized application, it is crucial to understand what these applications are. Decentralized applications (dApps) are distributed apps that run on blockchain and peer-to-peer (P2P) networks of computers instead of a single computer. They provide functions and utility to the users, just like traditional apps. However, dApps are not owned or controlled by any single authority and operate without human intervention.

These apps run on P2P networks of computers, meaning once a developer releases a dApp’s codebase, others can build on top of it, and these apps do not have a single point of failure. dApps distribute tokens that represent ownership. These tokens are allocated to system users according to a pre-programmed algorithm, thus diluting ownership and control of the dApp.

ProsCons
1. Minimum interruption and downtime
2. Cost reduction
3. High autonomy
4. More user privacy
5. Greater flexibility
6. No censorship
1. Challenges in developing a good UI
2. Immutability
3. High energy costs
4. Hard to maintain
5. Transparency concerns
6. Network congestion

Key Features of Decentralized Application

When it comes to building a decentralized application, there are certain key features that are important to consider. Decentralized applications, or dApps, are built on a peer-to-peer network of computers rather than relying on a single computer. This decentralized nature ensures that no one person or entity has complete control over the application.

1. Decentralization

One of the main features of dApps is their decentralization. This means that the power and control of the application are distributed among many different computers, rather than being concentrated in one central location. This can be seen in the use of decentralized storage networks like Storj.io or IPFS instead of centralized storage systems like Dropbox.

2. Autonomous

Another key feature of dApps is their autonomy. They are designed to run automatically without human intervention or third-party decision-making. Changes made to the dApp code must be approved by a majority of users, which ensures that users have full control over the application’s operation.

3. Smart Contracts

Smart contracts are an integral part of dApps. These are computer codes that facilitate the exchange of value, such as money, property, or shares. When running on a blockchain, they become decentralized applications.

4. Incentives

Incentivization is another important aspect of dApps. Users who contribute to running the application are rewarded with an internal currency or token that has value outside the app itself. For instance, Bitcoin rewards users for processing blockchain transactions, while the Golem network rewards users for sharing their computer’s processing power.

5. Immutability and backup of your data

The immutable nature of blockchain is another critical feature of dApps. Once data is written to the blockchain, it cannot be modified or altered, ensuring the security and reliability of the data. This feature can also be used for backing up application data.

6. Open Source

Finally, dApps are typically open source, meaning that anyone can view and verify the application code. This ensures transparency and accountability, and allows for collaboration and innovation within the community.

How to make a decentralized application: A step-by-step guide

1. Know your project

The first step in developing a decentralized app is to understand your app project in and out. You must be aware of the problem your app intends to solve and how it plans to do so. It is also vital to determine why your app needs to be a dApp instead of a traditional app. Cost determination and market research are other things you need to do at this stage.

Research the market to answer these questions:

  • Which are the existing dApps in my niche?
  • What are their strengths and weaknesses?
  • Which dApp ideas can get traction?
  • Does a market exist for my dApp idea?
  • What were the budgets and timelines of my competitors?
  • What can I do to outshine the other dApps?

2. Create a whitepaper

Once you clearly understand your dApp project, its future potential, and opportunities, you must create a whitepaper to help investors understand your vision. This document would include all the essential statistics, facts and figures, diagrams, and any other relevant information needed to convince the investors why your dApp idea will be a success.

Further, you must ensure that your whitepaper has fruitful information and does not sound like a marketing pitch. Investors are more likely to consider the project a scam if it is all about marketing with no substantive information.

It would help if you keep the following things in mind while creating a whitepaper:

  • The whitepaper should be completely original with zero plagiarism.
  • You must avoid using jargon while explaining your technology solutions.
  • Don’t forget to include your project roadmap and timeline to inform the investors about the project launch.
  • Explain the potential risks and how you plan to mitigate them.
  • You must share your progress if you’ve already started working on your project.
  • Share the steps you took to comply with the regulations.

3. Launch an Initial Coin Offering (ICO)

An Initial Coin Offering (ICO) is the cryptocurrency version of the traditional Initial Public Offering (IPO). It is a form of crowdfunding where you can issue tokens to the investors in return for an investment in the project.

You can structure your ICO in any of the following ways:

  • Fixed price and static supply: Each token you issue will have a pre-decided price, and the supply will also be fixed.
  • Fixed price and dynamic supply: In this case, the tokens will have a fixed price, but the supply will depend on the amount of funding received.
  • Dynamic price and static supply: This is the opposite of the previous structure. Here, the supply of tokens will remain fixed, but the amount of funding received will determine the price per token.

4. Build a smart contract

Smart contracts are programs that link dApps with the blockchain. You need a code to put your app on the decentralized platform, and smart contracts are the pieces of that code where you put the decentralized logic of your dApp.

The functions you want to take place automatically should be stored in the smart contract. Smart contracts cannot be changed once they are deployed on the network. They are a crucial element behind the decentralized nature of dApps, as the dApps are controlled by the logic written in the smart contract, not an individual or organization.

You also need to pick a blockchain because the smart contracts function on them. The number of blockchains will increase if you wish to build a cross-chain dApp. The most commonly used blockchain for dApp development is Ethereum because it has many users who already have crypto wallets and can onboard faster. However, other blockchains support smart contracts too.

5. Develop the frontend

You cannot develop a decentralized application without designing an appealing and interactive user interface. Although the dApps differ from traditional apps, the difference shouldn’t be visible on the front. That is to say, the UI of a decentralized app shouldn’t be drastically different from the apps that users commonly use.

An ideal approach to follow while developing the dApp frontend is:

  • Creating a low-fidelity UI
  • Creating a high-fidelity UI
  • User testing
  • UI/UX enhancement based on feedback

Moreover, it is essential to note that the transactions are not immediately executed on the blockchain, and calling a smart contract function from the user-facing app takes some time. Thus, it would be a good idea to include animation in the front showing the users that their transaction is in the process until it is verified on the blockchain.

6. Develop the backend

If you are building a decentralized app that allows users to perform multiple tasks rather than merely carrying out transactions, you will need a server-based backend. The backend server is where you will keep the user data because you cannot fit it onto a blockchain.

You will also get the reports on your dApps performance from the backend. The backend is the other important half of your dApp, and you need to note that it will be centralized.

7. Test the dApp

As stated earlier, once the smart contract is deployed on the blockchain, it can no longer be modified. As a result, any bugs or issues that made it to the mainnet will remain unchangeable. Thus, it is crucial to conduct rigorous app testing before deploying the app.

Like traditional apps, dApps also go through multiple quality tests to ensure the final product is bug-free. While testing frontend apps is a fairly standard technique, smart contract testing is slightly different because it requires using a testnet to verify its functionality.

8. Deploy and maintain

The final step is to deploy your dApp by uploading it to the Google Play Store or the Apple App Store. This stage also requires adding a smart contract to the blockchain and switching the backend portal to a live production environment.

dApp maintenance is a continuous process that requires constant monitoring and upgrading of the application. Although you cannot make changes to the smart contract because of the immutability of the blockchain, you still need to upgrade the frontend from time to time.

The technology stack used to develop a decentralized application

It is essential to have complete knowledge of the tools required to develop any traditional or decentralized application.

Below is a list of tools that you will need to create a dApp:

  • JavaScript: for frontend development and smart contracts testing.
  • Python, Go, Rust, C++: for backend coding and business logic development.
  • Node.js, Solidity: for smart contract development
  • Truffle: for developing smart contracts with the Solidity programming language and testing the blockchain code.
  • MetaMask: is an Ethereum wallet that provides chain connectivity inside a browser.
  • Ganache: to spin up a local blockchain in seconds with funded accounts; is an affordable alternative to setting up a full-fledged testing environment.
  • Web3.js/ Ether.js: for connecting the front-end portion of a dApp with the blockchain.
  • Express.js: for off-chain back-end development.
  • Remix: is a browser-based development environment for writing blockchain code.

Top decentralized apps in 2023

Now that we know how to make a decentralized application let’s look at a few top players in the industry and understand their essential functions and features.

top decentralized apps

1. PancakeSwap

PancakeSwap is a decentralized exchange built on Binance smart chain that allows users to swap between two BEP20 tokens. It uses smart contracts to execute trades and gained popularity for the liquidity of the listed assets. It also offers features such as Yield Farms, Syrup Pools, Lottery v2, prediction markets, and NFT collectibles.

CAKE is its native utility token that can be used for staking, yield farming, lottery participation, and governance voting. Users must connect the PancakeSwap platform with Web 3.0 wallets to execute the token swap. The users can execute the trade without waiting for the order to match.

2. Compound

Compound is a decentralized marketplace built on the Ethereum network that allows users to lend and borrow their digital assets. The users can deposit fourteen types of cryptocurrencies on this platform to generate interest.

The platform employs an automated algorithm to match a lender with a borrower. After discovering the matched users, the platform exchanges funds from the liquidity pool. Further, the liquidity pool acts as a means of collecting the interest from the borrower and paying it to the lender.

The platform uses COMP as the governance token and native cryptocurrency. The users can use the COMP token to vote on the governance structure of the Compound protocol.

3. Splinterlands

Splinterlands is a blockchain-based collectible card game that uses NFT to provide ownership to the players for their in-game assets. The game is built on the Ethereum blockchain, and players can create an account or connect an existing wallet to get started.

Its native governance token is Splintershards (SPS) which also acts as the primary gaming currency. SPS holders can also make governance-based decisions for the Splinterlands ecosystem.

4. Uniswap V2

Uniswap V2 is the second version of the Uniswap protocol, which is built on the Ethereum blockchain and allows trustless token swaps. The platform enables the users to directly swap one ERC-20 token with another, thus reducing the number of transactions. Consequently, they must pay a lesser gas fee to execute the transaction.

The ‘Flash Swap’ feature of Uniswap V2 allows users to withdraw any number of ERC-20 tokens from Uniswap without paying an upfront cost. The user needs to pay after the complete execution of the transaction.

5. Arc8

Arc8 is a play-to-earn mobile game that rewards players for their loyalty, effort, and gaming skills. It offers multiple gaming categories such as 1v1 matches, multiplayer tournaments, and sponsored tournaments.

It uses the GMEE token for entry fees, gameplay payments, voting, and in-game rewards. Additionally, the players can use these tokens to rent, purchase, breed, and upgrade in-game assets. The platform also has a referral program that rewards both the players involved in the referral process with GMEE bonuses.

An overview of the dApp development team

Developing a robust and user-friendly decentralized application requires an efficient development team. This section lists the professionals you need at different stages of the dApp development process.

Blockchain Ideation
1. Technical Lead
2. Solutions Specialist
3. UX Lead
4. Business Analyst
5. Blockchain Consultant
Proof-of-concept Development
1. Blockchain Technical Lead
2. Blockchain Developers
3. Technical Architect
Visual and Technical Design
1. Product Manager
2. Solutions Specialist
3. UX Lead
4. Business Analyst
5. Blockchain Architect
6. Developers
Development
1. Developers
2. Team Leads
3. Scrum Master
4. Technical Architect
5. Quality Analysts
Deployment
1. DevOps
2. Quality Analysts
3. Delivery Manager
Upgrades
1. Developers
2. Team Leads
3. Scrum Master
4. Technical Architect
5. Quality Analysts

Why is finding the right team of professionals necessary?

Developing a decentralized application is not an easy task. It requires an in-depth understanding of blockchain technology, smart contracts, various protocols, and development frameworks. A person with little knowledge might find it challenging to create a decentralized app from scratch.

Thus, hiring a development company with relevant experience and expertise is advisable. This decision should be taken with utmost caution because it can be a make-or-break deal for you. An experienced team can help scale your business, while an inefficient team might hamper your growth.

Idea Usher is a leading technology company with years of experience in blockchain, cryptocurrency, and NFT. Our developers strive to provide top-notch services that help scale our clients’ businesses. We have a clear motive to deliver cutting-edge digital solutions that adhere to your timeline and do not burn a hole in your pocket.

Contact us to develop a decentralized application and leverage the power of blockchain to succeed.

E-mail: [email protected]

Phone Numbers : (+91) 946 340 7140, (+91) 859 140 7140 and (+1) 732 962 4560

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Wrapping up

The future of mobile apps is here, and they will not die anytime soon. Since the advent of blockchain and other Web 3.0 technologies, decentralized applications have started gaining prominence. Their decentralized nature allows users to contribute to the governance of the platforms.

These apps have found their use in several industries, such as gaming, finance, health, insurance, and many more. Their fault tolerance, data integrity, platform flexibility, and user privacy appeal to both users and developers.

dApps are growing every day, and it will be interesting to see how these apps change the technological landscape in the future.

Frequently asked questions

Here are a few exciting FAQs on how to make a decentralized application:

Q. What are the requirements of a decentralized application?

A. An app should satisfy the following conditions to be called a decentralized app:

  • The app must be open-source.
  • It should provide decentralized storage.
  • It should offer cryptography.

Q. Do dApps need a backend?

A. Yes, dApps need a centralized backend to store the user data.

Q. How much does it cost to build a decentralized app?

A. The cost of building a dApp varies depending on the project complexity, the features, the time required, the experience of the development team, and other such factors.

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