Decentralized apps, otherwise known as Dapps, are a notable feature of the Ethereum network. And being that these software applications are decentralized, users have little fear that their usefulness will be curtailed as a result of political pressure or censorship. As blockchain applications, they cannot be altered and are highly reliable with no downtime. Several employ smart contracts as a means to process and enforce transactions. Below are the best known Ethereum dapps in the cryptosphere.
The best known Ethereum dapp is named CryptoKitties, an app that allows users to collect and exchange digital cats. Users employ an Ethereum smart contract to track digital cat ownership. Cryptokitties collectors can employ a ‘genetic algorithm’ to breed new kitties with different colors and design attributes. Doing so requires that collectors either use their own kitties or pay another collector to use their kitties.
When exchanging Cryptokitties, collectors price them according to their rarity. Indeed, the game’s popularity is somewhat dependent upon collectors breeding more collectible kitties. In late 2017, the game’s popularity congested the Ethereum network, an event which prompted widespread questions about the platform’s scalability.
Bancor allows cryptocurrency users to buy and sell tokens on its network, even when a coin’s liquidity is generally quite low. Creating such liquidity requires that each token have its own smart contract, one linked to ‘connector tokens’ within the Ethererum network. These smart contracts determine each coin’s supply, destroying or producing more so that exchange rates remain within a predefined range.
0x is open-source software that allows users to create their own decentralized exchange (DEX). By employing smart contracts, these decentralized exchanges can be created to benefit dapps and other projects, most notably through transaction fees. These decentralized exchange transactions rely on smart contracts and thus are conducted off-chain for processing. Consequently, 0x provides quicker processing than other decentralized exchanges.
Kyber network dapp
The Kyber network converts a buyer’s chosen token into a seller’s preferred coin, thus helping such tokens become more useful and accessful. As such, buyers need not worry about whether a business will accept a given token for payment. This capability helps the Ethereum network to grow and greatly expands the market for coin investments. The Kyber network offers instant liquidity for token holders as well, simply by paying commissions for contributions to a liquidity pool.
IDEX is a decentralized exchange that allows the direct trading of Ethereum tokens, most notably Tronix (TRX), BNB (BNB) and OmiseGo (OMG). By processing transactions in real time, IDEX provides investors with continuous trading capabilities. It does so by confirming transactions before they’re actually processed by the Ethereum network. This involves using smart contracts to enforce transactions once they have been accepted on the Ethereum network.
As you can see, these Ethereum dapps are helping to expand the cryptosphere (albeit Cryptokitties in a far different way!). Without such dapps, the penchant for innovation and risk-taking among developers would be highly limiting, impacting both creators and users very negatively.