The Ethereum network provides the perfect platform for decentralized apps. Decentralized apps or Dapps are applications that are not under the control of a central authority, rather the control of the application is theoretically in the hands of its users.
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Leveraging blockchain technology, the Ethereum network provides a decentralized network for more than 3,000 decentralized apps. These applications have different use cases and functions. In this review, our objective is to provide more information on the top five projects on the ethereum network.
Our top five ethereum network-based projects are
- Axie Infinity
MakerDao leverages the decentralized ethereum network to offer lending and borrowing services to its users. The organization’s lending services do not require a middle man and loans are paid out using cryptocurrencies.
One challenge this organization faced at its inception was how to provide lending services using volatile cryptocurrencies. however, they came up with a solution by combining their lending services with a stable coin.
Currently, the Dai stable coin is not fully decentralized. However, MakerDao has released plans on how to fully make the Dai stable coin a decentralized coin in the future and the organization is currently working towards achieving that goal.
Uniswap is one of the most popular decentralized exchanges currently available in the crypto community. The growth of this exchange has lead to an increase in attention given to decentralized finance.
True to the principles of decentralization, this exchange does not have control of the funds of users on its platform. Rather, the exchange facilitates trades between users in a completely decentralized environment.
Another cool aspect of this exchange is that it incorporates an automated market maker (AMM) system to facilitate trades. The result of this system is that the liquidity pools that control coin swapping is controlled by smart contracts. In other centralized exchanges, liquidity pools are controlled by a traditional order book system.
A common problem on centralized exchanges is that prices of digital assets are determined by demand and supply laws. As a result, buying or sales of assets can only take place when two parties agree to provide liquidity for each other.
However, using the automated market maker (AMM) system, dencentralized exchanges like Uniswap use a pricing algorithm to set the price of assets. this system gives an incentive to investors to provide liquidity and execute transactions at a set market price.
Launched in 2017, Chainlink is a decentralized oracle platform that provides real-world data such as stock prices or weather reports to smart contracts. The Chainlink project became more popular in 2019 after becoming a partner with tech giant Google.
According to Gemini.com “Smart contracts are pre-specified agreements on the blockchain that evaluate information and automatically execute when certain conditions are met.”
Some of the conditions required for the execution of smart contracts require input from real-world data. Therefore, denctralized apps (Dapps) provide that information to the smart contract.
An example of this is a smart contract on an insurance claim in the event of a natural disaster. When a natural disaster occurs, Chainlink provides the live data to the smart contract, if the data matches with the conditions in the contract, the smart contract instantly executes it.
The chainlink project is by a token called Link. This token is an ERC-20 crypto token that is available on the Ethereum network.
Axie Infinity is a decentralized game that is available on the ethereum network. The idea for this game came from games like Tamagotchi and Pokémon.
This fantasy game is based on breeding, raising, and battling with unique creatures known as Axies. These creatures can also be sold at a marketplace in the game. In addition to their nice and beautiful appearance, Axies are given special powers which are quite handy during battles.
Axies on the Axie Infinity game can be considered as a type of nonfungible tokens (NFT). As a result, each axie created is cryptographically different from other axies. Furthermore, all axies have value and can be kept as collectibles.
Similar to MakerDao, Aave is a lending platform that uses the ethereum network to provide its services. Aave was created in 2017 by Stani Kulechov.
This decentralized lending service provides users with lending, borrowing without the use of a central authority or middleman. Similarly, the platform allows users to earn interest in their digital assets.
The Aave platform is very reliant on smart contracts for its lending services. The smart contracts are operated by a distributed network of computers that run on the Aave software. One primary function of the Aave software is to enable the creation of lending pools. Lending pools allow users to lend or borrow on the Aave platform. Similarly, lending and borrowing on the Aave platform can be done using any of the 17 digital currencies allowed. This includes digital assets like BAT, MANA, and ETH.
Similar to other decentralized exchanges, users who want to borrow must provide collateral before receiving funds. All collateral must be provided in DAI which is a stable coin.
Many decentralized applications run on the Ethereum network and provide various services to their users. However, the top five Dapps on the Ethereum platform are those listed above. Other top Dapps on the ethereum net include Compound, SushiSwap, DeversiFi, Orion Protocol, and WBTC.