7.5 dApps: Examples from Gaming, Finance, Identity

What Are Decentralized Applications (dApps)?

Decentralized applications, or dApps, are software programs that run on blockchain networks like Ethereum and its Layer-2 (L2) scaling solutions, instead of relying on centralized servers controlled by a single company. At their core, dApps use smart contracts to handle backend logic and store data directly on the blockchain, making them transparent, tamper-proof, and highly resistant to censorship or downtime.

Unlike traditional apps managed by centralized platforms like Google or Facebook, dApps are typically:

• Open-source – anyone can inspect or contribute to the code.
• Permissionless – anyone can use or interact with them without approval.
• Decentralized – they run across thousands of distributed nodes rather than a single server.

A typical dApp has three main components:

1. Frontend: A web-based interface (usually built with tools like React) that users interact with—often indistinguishable from traditional apps in look and feel.
2. Smart Contracts: These self-executing pieces of code live on the blockchain and handle all core logic, such as token transfers, rules enforcement, or data processing.
3. Blockchain Layer: The Ethereum mainnet or L2 network stores key data in a secure, immutable, and transparent way.

Users interact with dApps through crypto wallets like MetaMask, which let them sign transactions, approve actions, and maintain ownership of their assets (e.g. tokens, NFTs). This ensures full user control and global accessibility without relying on a centralized authority.

While Ethereum’s mainnet can sometimes be slow and expensive due to high gas fees and network congestion, Layer-2 solutions such as Arbitrum, Optimism, and Base drastically improve performance. These networks process transactions off-chain and then settle them on Ethereum, reducing fees by up to 90% and significantly increasing speed.

These benefits are further enhanced by recent and upcoming upgrades to Ethereum itself—such as Pectra (launched in May 2025) and the upcoming Fusaka upgrade (expected December 2025). Together, they improve efficiency, lower costs, and make dApps more viable for everyday use by mainstream users.

dApps in Action: From Gaming and Finance to Identity

As smart contracts became more powerful and Layer-2 (L2) networks emerged to scale Ethereum, decentralized applications (dApps) evolved across sectors—from playful games to serious financial tools and digital identity systems. Here's how dApps have developed over the years, with real-world examples across major categories.

2017–2020: Gaming dApps — From Collectibles to Metaverses

The first wave of decentralized applications (dApps) captured the public’s imagination through gaming, highlighting the potential of blockchain technology beyond finance. These early applications introduced the concept of true digital ownership, where in-game assets were secured on-chain and controlled directly by users. This marked a shift toward player-driven economies and laid the foundation for more complex virtual environments, eventually evolving into early metaverse concepts.

CryptoKitties (2017)

Launched by Dapper Labs in November 2017, CryptoKitties was the first viral blockchain game. It allowed players to collect, breed, and trade digital cats—each a unique ERC-721 NFT, stored and verified on the Ethereum blockchain. Notable features included:

• True Ownership: Each kitty was verifiably owned and tradable on platforms like OpenSea.
• On-Chain Genetics: Smart contracts used genetic algorithms to create cats with distinct traits.
• Scalability Wake-Up Call: At its peak, the game congested the Ethereum network, foreshadowing the need for L2 solutions.

Gods Unchained (2018)

A strategic card game built on Ethereum, Gods Unchained further expanded NFT gaming by making collectible cards tradeable assets.

• Play-to-Earn: Players earn ERC-20 tokens and rare NFT cards through battles.
• L2 Efficiency: Runs on Immutable X, an L2 network that removes gas fees while maintaining Ethereum’s security guarantees.

Decentraland (2020)

One of the earliest blockchain-based metaverses, Decentraland lets users buy, build on, and monetize virtual land parcels—each represented as ERC-721 NFTs.

• User-Driven Economy: Players create galleries, games, and virtual shops on their land, often charging entry fees or selling digital goods.
• Ethereum Integration: Seamless wallet compatibility supports asset transfers, identity management, and token payments.

2020–2022: DeFi dApps — Redefining Finance

Decentralized finance (DeFi) dApps disrupted traditional banking by enabling anyone with a crypto wallet to lend, borrow, trade, or earn interest—without relying on centralized intermediaries. Built on transparent, open-source protocols, these applications introduced programmable financial services that operated 24/7, unlocking new levels of accessibility, composability, and user control in global finance.

Uniswap (2018–2020)

A decentralized exchange (DEX) that uses Automated Market Makers (AMMs) instead of order books.

• Liquidity Pools: Users supply ERC-20 token pairs (e.g. ETH/DAI) to earn trading fees.
• Algorithmic Pricing: The “constant product” formula (x * y = k) determines prices dynamically.
• Mass Adoption: By 2025, Uniswap processes over $1.5 billion in daily volume.

Aave and MakerDAO

These two projects fundamentally reshaped decentralized lending and stablecoin ecosystems.

• Aave (2020):
  • Enables users to lend and borrow a wide range of crypto assets in a decentralized manner.
  • Offers over-collateralized loans to protect lenders and maintain protocol stability.
  • Introduced flash loans—unsecured loans that must be repaid within the same transaction—widely used for arbitrage, refinancing, and liquidation strategies.
• MakerDAO (2017, scaled in 2020):
  • Creator of the DAI stablecoin, a decentralized asset pegged to the US dollar.
  • Maintains the peg through collateralized debt positions (CDPs), allowing users to lock crypto as collateral to generate DAI loans.
  • Pioneered decentralized governance and stability mechanisms in the stablecoin space.

Curve Finance (2020)

A decentralized exchange (DEX) specifically optimized for stablecoin swaps (e.g. USDC ↔ USDT):

• Low Slippage: Utilizes custom bonding curves designed to minimize price impact during trades, ensuring more efficient and predictable swaps.
• High Efficiency: Handles around $2 billion in monthly trading volume, making it a crucial platform for DeFi arbitrageurs and users managing stablecoin portfolios.
• Plays a key role in enabling smooth, cost-effective stablecoin transactions within the DeFi ecosystem.

2021–2025: Identity dApps — Owning Your Digital Self

As Web3 matured, a new generation of dApps emerged to tackle a foundational gap in the internet: self-sovereign identity. These applications empower users to manage their digital identities, personal data, and credentials independently, without relying on centralized platforms. By enabling verifiable, user-controlled identities, they pave the way for more secure, private, and interoperable experiences across the decentralized web.

Ethereum Name Service (ENS) (2017, scaled in 2021)

• ENS lets users register human-readable names like yourname.eth, mapping them to wallet addresses and other metadata.
• Simplifies transactions by removing the need to copy or share long, error-prone hexadecimal addresses.
• Provides extended functionality including support for avatars, profile data, and seamless cross-chain integration.
• Enhances user control over digital identity and makes blockchain interactions more accessible and personalized.

Civic and uPort (2021–2022)

These platforms provide tools for verifiable credentials and secure data sharing.

• Civic: Facilitates KYC (Know Your Customer) processes and identity verification specifically for DeFi platforms and cryptocurrency exchanges, streamlining access while maintaining security.
• uPort: Offers self-sovereign digital identities and attestation management, enabling users to authenticate with dApps directly—eliminating dependence on centralized identity providers.
• Empower users with greater control over their personal data and how it’s shared across decentralized applications.

Conclusion

From trading digital cats to managing billion-dollar lending platforms and creating decentralized identities, dApps have rapidly evolved—powered by smart contracts, NFTs, and Ethereum’s expanding infrastructure. With Layer-2 networks like Arbitrum, Optimism, and Immutable X, plus major Ethereum upgrades like Pectra (May 2025) and Fusaka (expected December 2025), the path forward is more scalable, accessible, and user-centric than ever.