Glossary
DApps examples
Applications that run on top of blockchains are called decentralized applications. We can list several examples, such as decentralized identity projects, supply chain networks, crowdfunding, social networks, and donation networks. Any project that aims to run in a secure and transparent environment can use blockchain as its recording and execution layer.
However, the most used applications are under decentralized finance, DeFi for short. This is because most blockchains have a native token and allow the creation of new tokens through smart contracts. Thus, a financial ecosystem built on top of blockchains emerged.
An example in DeFi is decentralized exchanges, DEX, where it is possible to exchange token assets without the need for third parties. The best-known DEX protocol on Ethereum is Uniswap, and an example on Neo is Flamingo Finance. Exchanging tokens is just one of the possibilities in a DEX. It is also possible to create or participate in pools and profit from a small fee charged on each transaction.
In decentralized finance, lending and borrowing assets and tokens is also possible. Since such transactions are carried out under pseudonyms, including collateral when borrowing assets is necessary. On Ethereum, the Aave platform is one of the most used for borrowing and lending. Currently, more than 5 billion dollars in assets are locked in the platform.
Another common use case is decentralized autonomous organizations, DAOs for short. Such organizations do not have owners, and their structure is all regulated by a smart contract. Participants own tokens and may use them to vote on submitted proposals. Thus, governance is maintained by token holders.
Currently, the idea of a Metaverse and virtual worlds is also in development. Ownership of land and items in such applications is recorded on the blockchain via non-fungible tokens, NFTs for short, and these NFTs can be freely traded on decentralized markets. This environment also encompasses computer games where collectibles and characters are registered as NFTs and can be freely traded.
New types of decentralized applications are constantly emerging, and this market is expected to grow exponentially in the coming years.
