dApps

A dApp, or decentralized application, is a software application whose backend code runs on a decentralized blockchain or peer-to-peer network instead of a single centralized server. Most dApps use smart contracts written in languages like Solidity to enforce logic and state, and rely on a distributed consensus mechanism to execute and record transactions. Front-end interfaces interact with these contracts through wallets or web3 providers. Common platforms include Ethereum and other compatible blockchains.

Key components include smart contracts as the business logic, a user-facing front end, and decentralized data storage or oracles for external data. Because data and code are not controlled by a single entity, dApps often use tokens for governance and incentives and may rely on off-chain storage (such as IPFS) to reduce on-chain load.

Differences from traditional apps include lack of a central owner, censorship resistance, and on-chain state transitions that are verifiable by anyone. dApps are typically open source, permissionless to deploy and use, and may employ automated governance mechanisms (DAOs).

Benefits include increased transparency, resilience to single points of failure, and programmable incentives. Challenges include security risks from smart contract bugs, high transaction costs or latency on congested networks, complex user experience, and privacy or regulatory concerns. Upgradability can be difficult without introducing centralization or trust assumptions.

Development and governance: dApps are developed with smart contracts and web interfaces; security audits are common. Upgrading contracts often uses proxy patterns or forking, with governance tokens or DAOs determining changes. Notable use cases include decentralized finance (DeFi) protocols, NFT marketplaces, decentralized exchanges, gaming, and supply-chain tracking.