In this article, we discuss the concepts of decentralized applications (DApps), Decentralized exchanges(DeX), Decentralized finance (Defi), and blockchains. Let's start
What is DApp?
In short, A Dapp is like an application that’s built on a decentralized network or blockchain. A dapp is a decentralized application that runs on a blockchain, which means that it’s not controlled by one person or organization but instead by a network of computers. This makes it easier to share services without giving up control of your data.
To understand Dapps, you first need to understand what Ethereum is.
Ethereum is the most popular platform for developing decentralized applications. Ethereum is a network protocol that allows users to create and run smart contracts over a blockchain network. it uses smart contracts to facilitate transactions. This means all transactions on the Ethereum network are secure and trustworthy.
Other popular platforms Dapps Development Company provides for the development of decentralized applications (DApps) include Ethereum EOS, NEO, Dether, etc.
What Is Defi?
Defi — often called Decentralized finance — refers to the shift from traditional, centralized (Cefi) financial systems to peer-to-peer finance enabled by decentralized technologies built on the Ethereum blockchain. From lending and borrowing platforms to stablecoins and tokenized BTC, the Decentralized finance ecosystem has launched an expansive network of integrated protocols and financial instruments. By deploying immutable smart contracts on Ethereum, DeFi applications can run exactly as programmed without any possibility of third-party interference or censorship.
What is DeX (Decentralized Exchanges)?
Decentralized Exchanges (Dex) follows a transparent protocol of providing its users full control over the transactions by eliminating the control of unreliable middlemen over the user's data, hence saving a lot of time, money, and resources.
The working of the DEx can be learned by knowing how smart contracts work. Smart contracts are automated self-executing agreements between 2 parties, directly connecting them together. If party A wants to procure a service from party B, they’ll lock up the contract payment through a private key. Now if B completes the task, the smart contract releases the amount to their wallet. If B fails, it gets reverted back to A.
What is Blockchain?
Blockchain is a distributed ledger technology (DLT). A blockchain is an open, distributed database that can be programmed to record transactions between two parties efficiently and in a verifiable and permanent way. Blockchain eliminates the need for third parties, Rather than depending on a trusted intermediary, participants in the network validate each other’s work by reaching a consensus on what has occurred.
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