Dapps and Decentralization: Driving adoption through DeFi and NFTs

Dapps and Decentralization: Driving adoption through DeFi and NFTs

Decentralized applications or dApps at their core are digital applications or programs that run or exist on a peer-to-peer (P2P) blockchain network of computers in place of just a computer.  Decentralized applications are outside the scope and control of a single authority. These Decentralized applications are majorly developed and built on a platform known as Ethereum. These can be developed for varieties of purposes which include financial transactions, social media, and games.

To Understand Decentralized Applications (DApps), one has to understand how it works.  A standard web app, such as Instagram or Facebook runs on a computer system that is operated and controlled by a company or organization, giving it total authority over the app and how it operates. There may be many users on one side, but the backend of the app is managed by just one organization.

DApps can run on a peer-to-peer- network or a blockchain network. For instance, BitTorrent, Tor, Popcorn Time, Tor, and BitTorrent are applications that run on computers that exist as part of a Peer-to-peer-network, whereby multiple participants are consuming their contents, feeding, or seeding content, or performing both functions simultaneously.

In the purview and context of cryptocurrencies, Decentralized applications Operate on a blockchain network in an open-source, public and decentralized environment and are devoid of interference and control by a single authority. For instance, a software developer can develop a Facebook-like decentralized application and put it on a blockchain where different users can post messages. When the messages are posted, no one, including the app creators, can delete the messages.

The pros of decentralized applications centre on the ability to protect the privacy of the user.  Using decentralized applications, users do not necessarily have to submit their personal and private information to be able to access the function the app provides. Decentralized applications employ smart contracts to complete transactions between two different parties that are anonymous without the need to depend on a single central authority.

Financial proponents that advocate for free speech point out that decentralized applications are capable of being developed as alternative social media platforms. A social media platform that is decentralized would be resistant and immune to censorship because no single authority or participant on the blockchain can block or delete messages or block messages from being Published.

A flexible platform that exists for the creation of new decentralized apps is Ethereum. It provides the facilities and infrastructure that are needed for developers to focus their efforts on finding unique uses for digital applications. This, if successful, could hasten and enable the quick deployment of decentralized applications in different varieties of organizations including gaming, social media, finance, online shopping, and banking.

Non-fungible Tokens

Recently, a new phenomenon called the non-fungible token (NFT) emerged in the crypto ecosystem. Motivated by a plethora of endorsements and collaborations by celebrities, NFT emerged as the hottest new phenomenon of the cryptocurrency experiment. It's global combined value exceeded that of the ICO craze from a few years earlier.

The astronomical rise of NFT has been so overwhelming that the term NFT is now synonymous with the cryptocurrency ecosystem. The global NFT market is estimated to currently stand at around $43, with an estimated daily trading volume of over $3 billion. The first company that brought to market the first non-fungible token movie production is GFT Exchange (GFTX), with 20th Century Fox and Atom Tickets, releasing limited-edition Deadpool 2 digital posters to advertise and promote the film.

In their simplest form, NFTs or Non-Fungible Tokens is a means to prove digital ownership. NFTs are built on blockchains. These are distributed public ledgers that store different transactions. Each NFT is stored on the blockchain using unique metadata and an identification code.

NFTs provide a unique and excellent way to mark digital assets and control supply. When a creator has created a piece of music, a video, or digital artwork, minting it as an NFT implies that owners can claim ownership over it.

Before now, digital assets were easily stolen. What this implies is that it is a big advantage as creators and artists can’t be cheated out of royalties again and collectors do not have to worry about investing in a fake or forged piece of art. This presents an excellent avenue to manage the supply of digital content, which is what is needed to drive up its price. Only one person can own the Nft, even if it is visible to other artists, creators, and traders because it attributes one owner to one piece of content.

The NFT decentralized finance combination is very doable, especially with the abilities of NFTs to represent the digital services commercialization and products. Non-fungible tokens in recent times have grown to become one of the most productive applications in the Defi ecosystem.  For instance, Ethereum introduced a certain type of tokens used for offering representation for digital assets. So, NFTs can be used to serve as proof of ownership rights for digital art. Ethereum has grown to become one of the most preferred choices for creators and developers to share art and interact with a community of art collectors.

Decentralized finance

Decentralized finance or DeFi in its basic form is a  financial system that is based on blockchain technology. DeFi is an umbrella term for different types of projects and applications in the public blockchain space that is aimed at the disruption of the traditional way of finance. Spurred by blockchain technology, DeFi is a financial application that typically uses smart contracts. Smart contracts are forms of automated agreement that do not require a middle man to be done but can be accessed by any user connected to the Internet using a computer.

Conclusively, Decentralized applications run or exist on a peer-to-peer (P2P) blockchain network of computers in place of just a computer. Because of their decentralized nature and form, they have been able to drive adoption through decentralized financial systems and non-fungible tokens built on blockchains that are used to prove digital ownership.

It is imperative to note that while NFTs can allocate value to almost anything, DeFi aids with unlocking a specific asset's value. With the proliferation of the users of these unique applications and platforms,  NFTs and DeFi can change and revolutionize the way digital money, tokens, assets, and financial services are viewed.