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Dec 10, 21  |  Ibrahim Imran

How Do DApps Make Money? A Complete Guide 

dApps – blockchain-powered mobile apps – have started their own trend.

The technology that was created to revolutionize the banking industry has not only found a home in a variety of businesses, but it has also begun to provide a variety of use cases on the mobile landscape.

The dApp market has expanded to the point that entrepreneurs from all over the world and from a variety of industries have begun swarming the area in search of blockchain app developers and solutions to the question of how much does Blockchain app development cost.

All of this is on top of continuing to learn their way around the domain and identifying use cases for blockchain applications that will allow them to reap the rewards of their investment.

While our Guide to Blockchain Development contains information on how to construct a dApp, you should be aware that it does not end there. Before you enter the decentralized world and offer your services in a more transparent and immutable manner, there will be a lot to learn and consider.

One of the most crucial topics to think about is how do DApps make money? In this article, we’ll break down the 5 ways you can make money from a decentralized application. However, before we dive into that, let’s talk about the fundamentals of Dapps.

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How do Dapps Work?

Before getting into how do dapps make money, let's understand what dapps are. DApps, first and foremost, function similarly to traditional desktop or mobile apps. They can be utilized as a web page as well. The only difference is that it is not hosted on any local or cloud servers, unlike the other apps and websites. DApps are built on top of a public blockchain, which is simply a collection of nodes. Although you may know that blockchain is a public distributed ledger, it is also known as a network of nodes that keep an identical ledger.

You must have a good understanding of how a blockchain works in order to construct a DApp or even make money from it.

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A blockchain usually retains an open ledger that records data and nodes across the network manage comparable or identical copies of the ledger. Nodes are computers that run your program and become compatible nodes. Each network node contains many copies of the ledger since blockchain is an identical ledger. As a result, the network can't be changed.

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A ledger will be removed from the system if it is incompatible with the others. As a result, the risk of hacking would be reduced, and security would be improved, making DApp creation even more enticing. Miners safeguard the security of transactions by confirming them and relaying them to the network. Because mining demands a lot of computational and computer effort, users compensate a DApp creator with tokens.

This is why users must have a DApp wallet that contains the blockchain tokens used by the app. Users must have Ether tokens because the bulk of DApps is built on Ethereum's blockchain.


How do Dapps Make Money?

Following the development of a decentralized application, the next stage is to generate revenue. You've probably figured out that DApp offers a lot of possibilities for starting a business. But how would you make money off of them?

Here is a list of ways to profit from your DApp.

Initial Coin Offering (ICO) and Token Sale

One of the most important aspects of making cash from a DApp is to back it with a token and sell it to the public. During the crowdfunding campaign, the DApp developer sells it. This means that the token holders, or a subset of token holders, will profit from your token. Tokens that aren't fungible are a wonderful example of how it works.

Biconomy, for example, recently received $9 million through Mechanism Capital's crowdfunding platform. Big names like Coinbase took part in the event in a big way. However, before proceeding with crowd sales, you must keep in mind the primary function of your token in your DApp development.

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Adding a Fee for Transactions

How do dapps make money? Well, there are numerous ways. One of the effective ways to make money is by adding a fee for transactions. In order to monetize DApps, a transaction fee of a particular amount is charged. For DApps like CryptoKitties, this strategy has proven to be beneficial. For each successful auction, they charge roughly 3.75 percent of the transaction fee.

Consider the following as an example of how Ethereum DApps will be monetized in general:

  • A uses your service to purchase something from B.
  • A service provider receives a percentage of the total (you)
  • As a result, the entire (100-C) percent will go to a service provider.

Make sure you're charging a reasonable cost in your DApp; else, someone will replicate your smart contract and broadcast a version with lower or no fees at all.

Premium Functionality Requires a Fee

Traditional applications make money using freemium models, in which the basic services are provided for free but extra features are charged for. This functionality can also be used by gaming DApps.

As an illustration, consider the following:

Let's imagine your gaming DApp requires players to earn coins or victories in order to advance to the next level, which becomes increasingly difficult. So what you can do is allow consumers to skip the more time-consuming process by charging a set cost. Those who are playing DApp for free will also see results in this manner.


Subscription/Membership

You may monetize your DApp by including a membership program or subscription in your contracts. With a premium membership, you can restrict some features to your subscribers or users. Your DApp's membership duration can be time-based, such as monthly access, or usage-based.

Promotional Material

Since we're looking at DApps, this one isn't as popular, but given its popularity in regular apps, it's worth a shot. Many businesses choose to advertise in order to generate revenue.

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Add a contribution button to your DApp if it's for a social or global cause. Some kind of donations will find their way to your crypto address as a result of this. As you can see, there are a plethora of options for monetizing your DApp. However, in order to monetize it, you must first construct it, so let's get started on the development process.

Conclusion 

As you can see, in this article we’ve explained how dapps work and how do dapps make money. Now, if you’re interested in jumping into dapp development, make sure to refer back to our article so that you can make the most out of your investment.

Additionally, you can connect with the best blockchain technology companies at Distinguished.io for the best help. 

 



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