The dApp economy: a new platform for distributed innovation?

ABSTRACT

We study the emerging innovation frontier of decentralised applications (dApps) and blockchain platforms. We describe the fundamental features of decentralised blockchain platforms and illustrate the growth of the dApp economy as well as the emerging variety of blockchain platforms. We also characterise the dApp ecosystem highlighting the new types of parties, such as transaction validators, that are essential in the functioning of decentralised platforms. We show how design choices moderate the impact of decentralisation of the transaction system on digital innovation. By comparing decentralised platforms against centralised platforms and hierarchies, we pinpoint the limited opportunities for strategic action on the part of the platform provider to shape the direction of innovation. We speculate that the limited governability of blockchain platforms can give rise to an abundance of generativity and unpredictability in these ecosystems.

KEYWORDS:

• dApp
• blockchain
• platform
• ecosystem
• digital innovation
• generativity

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. We considered the main blockchain platforms as those with the most dApps in June 2020 according to www.stateofthedapps.com/stats; retrieved 21/07/2021.

2. ‘Turing-complete’ means that any real-world general-purpose computer or computer language can approximately simulate the computational aspects of the code; even more simply, it can support any type of programming. More formally, a Turing-complete system can be used to simulate any Turing machine (the basis of the modern computation), in that it is able to recognise or decide other data-manipulation rule sets.

3. See https://ethereum.org/en/foundation/; retrieved 21/07/2021.

4. https://ethereum.org/en/eth2/; retrieved 21/07/2021.

5. Forking is when a blockchain diverges into two potential paths forward. A hard fork occurs when a blockchain software upgrade adds a new rule that isn’t compatible with the original blockchain software.

6. https://blog.bitnation.co/what-are-dapps/; retrieved 28/04/2021.

7. https://steemit.com/; retrieved 25/07/2021.

8. See https://yup.io/; https://medium.com/the-liquidapps-blog/builtondapp-yup-8a9969fd6329; and https://cointelegraph.com/news/how-we-got-ivy-league-students-to-use-blockchain-tech; retrieved 20/07/2021.

9. https://actifit.io/; retrieved 25/07/2021.

10. A user or a colluding group of users can fork (in this case corrupt) any PoS or BFT system if they control enough nodes in the network.

11. https://tronspark.com/tron-vote/; retrieved 28/04/2021.

12. See https://www.coindesk.com/steem-hard-fork-hive; https://cointelegraph.com/news/hive-hard-fork-is-successful-steem-crashes-back-to-earth; retrieved 21/07/2021.

13. Bridges can range from more centralised, relying on trust or federation, to ‘trustless’ bridges that are more decentralised. See https://coinmarketcap.com/alexandria/article/what-are-blockchain-bridges; retrieved 29/04/2021.

14. https://ethereum.org/en/developers/docs/transactions/; retrieved 21/04/2021.

15. https://help.coinbase.com/en/coinbase/getting-started/crypto-education/eos-eos-faq; retrieved 25/04/2021.