Ever since blockchain technology existed as an academic concept, experts have seen a huge potential in the technology. As Web 1.0 and Web 2.0 made their impact on the world population, everything is still not perfect. In fact, user data in today’s Web 2.0 systems have been under extreme vulnerability in many cases. Such information is stored in centralized servers, and hacks and sales of data happen casually. Being in the stronghold of centralization also gives a few people the power to suppress data they consider might disturb the harmony. Also, governments have been able to shut down websites and accounts of many people they considered suspicious or breaching restrictions.
To combat all these issues, Web3 (or decentralized web) serves to be the ultimate solution that is backed by blockchains. Even though the technology is still nascent, the existing Web 3.0 decentralized applications have already shown enough promise as to why the decentralization of the internet could benefit the world. In this blog, we will particularly look at how the financial sector benefits from Web3 technology.
What are Web 3.0 Decentralized Applications?
Web 3.0 DeFi (abbreviation for Decentralized Finance) Dapps (or decentralized applications) are applications hosted by blockchains that allow users to perform financial operations such as lending, borrowing, mortgaging, loaning, and saving, and more. These platforms operate based on crypto tender (cryptocurrencies and stable coins), and collaterals can include non-fungible tokens (NFTs). Popular Web 3.0 Decentralized Applications include Sushiswap, PancakeSwap, and MakerDAO.
These applications operate based on the concept of decentralization, which makes it impossible for anyone to steal user data. However, all the transactions on the network are visible without revealing the real identity of the user. All the information is spread across many devices, meaning that even a refrigerator can contain the information of DeFi transactions if it is an IoT (Internet of Things) device.
The Technology Behind Web 3.0 Decentralized Applications
- Decentralized Applications development obviously does not include centralized servers. So, it is best to forget anything related to servers and server storage protocols before reading further.
- Blockchains form an inseparable part of any DeFi platform development. While Ethereum is the currently popular network used by most DeFi Dapps, other networks such as Hyperledger Sawtooth, HyperLedger Fabric, EOS, and Polygon can also be used.
- Smart contracts form an essential part of decentralized finance Dapp development. These are lines of code written in Solidity that execute automatically when the conditions provided to them are met. They also record transaction history, which makes them an attractive option for decentralized finance companies.
- Ethereum Virtual Machine (EVM) is the technology behind the execution of smart contracts and updating information accordingly on the blockchain. Although based on Ethereum, it allows the running of smart contracts in various blockchains.
Advantages of Web 3.0 DeFi Dapp Development
- Due to the inherent nature of DeFi Dapps, the privacy of the users is preserved, and monopoly by a few powerful companies is prevented. Now, users dictate how their data is used, so inadvertent advertising based on purchased data sets will never be possible.
- With blockchains hosting these Dapps, security will never be compromised as data gets distributed to devices across the world, and attempting to steal information might end up as a costly failure.
- Since no centralized servers are involved, all the data that a user generates belongs to themselves. If a firm wants to get user data, it should pay the users beforehand, which ensures that everything happens with the consent of the users.
- Interoperability is another great feature of DeFi Dapps as users can access multiple applications from a single platform (much like super apps in the Web 2.0 ecosystem), hence ruling out the time between switching applications.
- Since blockchains are decentralized, no one needs to authorize people to use the platform. This makes it possible for anyone to create and access DeFi platforms irrespective of gender, location, demographics, and other social barriers.
How Does Blockchain App Factory Help You Here?
With DeFi Dapps, people can now have the advantage of having zero frauds, great customer experience, trouble-free cross-border payments, and open internal audits of banks, which have been features of open banking. Blockchain App Factory provides some of the best DeFi Dapp development solutions in the world while being client-centric from the beginning. Our expertise in blockchains ensures that your Decentralized Application will contain state-of-the-art technology while charging you friendly prices. Contact one of our experts now to begin your decentralized finance Dapp development journey!