A decentralised application (DApp, dApp, Dapp, or dapp) is an application that can operate autonomously, typically through the use of smart contracts, that run on a decentralized computing, blockchain or other distributed ledger system. Like traditional applications, DApps provide some function or utility to its users. However, unlike traditional applications, DApps operate without human intervention and are not owned by any one entity, rather DApps distribute tokens that represent ownership. These tokens are distributed according to a programmed algorithm to the users of the system, diluting ownership and control of the DApp. Without any one entity controlling the system, the application is therefore decentralised.
Decentralised applications have been popularised by distributed ledger technologies (DLT), such as the Ethereum or Cardano blockchain, on which DApps are built, amongst other public blockchains.
The trustless and transparent nature of DApps have led to greater developments in the utilisation of these features within the decentralized finance (DeFi) space.
DApps are divided into numerous categories: exchanges, games, finance, gambling, development, storage, high-risk, wallet, governance, property, identity, media, social, security, energy, insurance, health, etc.
There are a series of criteria that must be met in order for an application to be considered a DApp.
Traditional definitions of a decentralised application require a DApp to be open-source. That is, the application operates autonomously without a centralised entity in control of the majority of the application’s associated tokens. DApps also have a public, decentralised blockchain that is used by the application to keep a cryptographic record of data, including historical transactions.
Although traditional DApps are typically open-source, DApps that are fully closed-source and partially closed-source have emerged as the cryptocurrency industry evolves. As of 2019, only 15.7% of DApps are fully open-source while 25% of DApps are closed source.