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dApp

A dApp is an app that runs on a blockchain, not on a single central server. The abbreviation stands for decentralized application.

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What is a dApp?

A regular app is usually managed by one company that runs its servers and manages its data. A dApp works through a network of computers, also called nodes. This means no single party has full control over the app.

A dApp uses smart contracts. These are programs on the blockchain that automatically carry out an agreed-upon action when the conditions are met. dApps are used for things like DeFi, NFTs, and games.

An example of a dApp

Suppose you want to lend cryptocurrency to earn interest. Through a dApp, you connect your crypto wallet and choose how much crypto you want to lend.

A smart contract then automatically handles the lending process and calculates how much interest you could receive. This happens without a bank or another central party getting involved.

Why are dApps important in crypto?

dApps make it possible to use applications that work without a central party. Actions and transactions are recorded on the blockchain, so they can be checked.

You may come across dApps in crypto news about new DeFi services, NFT projects, games, or developments on blockchains such as Ethereum. The blockchain a dApp runs on partly determines how fast the dApp is and how expensive it is to use.

A dApp isn't automatically safe or easy to use. Errors in smart contracts can create vulnerabilities. High transaction fees or a busy network can also make it harder to use.

Disclaimer: This content is for informational purposes only and does not constitute financial, investment, legal, or tax advice. The information provided may be incomplete, inaccurate, or outdated and should not be relied upon as such. Nothing on this website should be considered a recommendation to buy, sell, or hold any cryptocurrency. Investing in crypto-assets involves risk of loss.