In blockchain, decentralization refers to the transfer of control and decision making from a centralized entity (individual, organization, or a group) to a distributed network. It is crucial to businesses, how, if you ask? Here’s your answer.
Why is Decentralization Important to Businesses?
When you are building a digital product or service for your business, there are three primary network architectures you will have to consider: centralized, distributed and decentralized. While blockchain technologies are often based on decentralized networks, blockchain app development itself cannot be categorized as a decentralized application. Therefore, dApps (decentralized apps) are developed as the solution that gives businesses the ability to manage their own digital assets and data.
What are Decentralized Applications (dApps)?
Decentralized applications are software that interact with the blockchain in DeFi (Decentralized Finance) keeping track of the state of all network participants. dApps have the same interface as any other website or mobile application today however their core functionality is represented by smart contracts.
dApps will often need the user’s token to allow them access to features like games, trading, stake,earn interest etc. which helps businesses with engagement. This is probably why a decentralized app is equitable to every business scale and is one of the most practiced blockchain trends in the industry vertical.
Now, If you have already started working on your decentralized mobile app development, all you need to know is “how to make money with dapps”. This article introduces you with the best dApps to make money, various aspects of monetizing models for your dApps and tells you how to make money with dApps. So make sure you stay till the end.
Before we hop on to money making strategies with dApps, you might also want to explore the following development cost;
- How to determine Blockchain app development cost
- How much does it cost to develop a crypto wallet app
- What is the development cost of a crypto currency exchange app and;
- How do free apps make money
Now that you have an idea of various blockchain app development costs, let’s begin:
dApps do not follow the standard monetization strategies for regular business apps, instead they rely on token launch activities, initial coin offerings, donations and transaction fees for money making strategies.
Here’s a difference between traditional app money-making and monetizing through dApps;
There are already major dApps with massive user bases such as Empire, Augur, Basic Attention Token, Compound etc, that carry multiple sources of revenue for a viable business model. What are these sources of revenue? Let’s take a look;
How Do Decentralized Apps Make Money?
The answer to how to make money with dApp takes startups and enterprises through many routes. Following are the unique revenue earning models for businesses with dApps:
1. Crowdsale and token launch
The foremost dApp business and revenue model to consider is to bootstrap a project through crowdsale and back it with an asset token.
If you plan on taking this route, you will have to keep following things into consideration:
- The core functionality of your decentralized app
- Provided access to the network
- Distributed profit to the token holders
2. Transaction fees
Another answer to can you make money with dApps is that the transaction fees model, you will find in all the dApps monetization guides. Charging users for availing your service can be one of the most profitable ways to make money by developing dapps.
This is one of the most popular ways if you are looking to make money with ethereum dApp. This is how it works;
- A purchases something from B on your platform
- X% of the amount goes to you – the service provider
- 100 – X% then goes to B
The caveat here is to know what percent of transaction fees to set. If you allot a high amount, someone will eventually copy your smart contract and offer their own version with a less to zero transaction fees.
3. Premium
Taking cues from the traditional, non-decentralized gaming apps, you can add the monetization functionality in your app to answer the investors’ persistent question on how to make money with dapps.
If yours is a gaming app too, you can add the model and offer players a chance to up their game without working on the levels by buying the premium functionality using digital currency to successfully utilize dApps games to make money
4. Subscription
You can easily add a membership or subscription element in the contract to ensure that the function has only been called upon by subscribers or the premium members.
The time frame of this subscription can be:
- Usage-based – The users would only be allowed to call function X times
- Time-based – Users would be allowed to call in a function till X time passes
5. Advertisem*nts
While still a very new/ less used blockchain business and monetization model, advertisem*nts do in fact find a place in the answer to how decentralized app development makes money.
So, you should think about adding it to your list of dApp monetization strategies.
You can also check out: how to use your business app as a brand marketing channel
6. Donations
If your dApp project is out to solve some world issue or to function around some social cause, you can put a donate button on your application or website or can even pass its link around to social entrepreneurs to donate.
7. Create digital goods
One of the biggest examples of how Ethereum apps make money using this monetization model can be seen in CryptoKitties.
What CryptoKitties did is that they developed generation 0 kitties and gave them to the platform users to keep as a collectible. By making the kitties functional and unique and viral trending, they were able to attract users to put their money in the digital good.
8. Referral marketing
Referral marketing that has proven to be behind e-commerce apps’ success can also be taken into consideration to make money with Ethereum based decentralized applications. In fact, there are a number of Blockchain powered platforms on the internet today that give you a link to their websites to promote. And depending on the clicks or traffic you are able to send their way, you get paid by them.
So, these were the eight effective decentralized apps business models and strategies you can look ahead to enjoy maximum revenue from your dApp development.
Industrial dApps and Their Monetization Models
Experts suggest that it is crucial for businesses to follow respective monetization models that suit their business process well. In addition to this, here are a few examples of dApps generating revenues in various sectors:
1. Gaming dApps
Gaming dApps make players compete against each other. As a business that invests in gaming dApps, you can earn a handful of revenue by promoting or sponsoring the content of similar games.
2. Decentralized exchange apps
Stock exchange decentralized apps offer their users the facility to trade a market share. The investors get a predefined amount for every transaction fee involved in a single stock exchange.
This approach returns tremendous revenue to investors and exchange dApps businesses.
3. Marketplaces
How can we talk about blockchain-powered apps and forget about NFTs? As a part of popular crypto trends, NFT marketplace allows users to sell, buy and even create non-fungible tokens. If your business involves a similar process, you can use the transaction fee model to add to the overall revenue of NFTs.
4. Payment dApps
Payment dApps facilitate money streaming in real time where users can send anonymous transactions using Ethereum. Here, the transaction fee involved in every transfer relies on the subscription package of the sender and the location of the receiver.
Here, your business payment dApp can earn revenue by the percentage of the fee share.
Since there is no central managing authority for dApps, various online industries are openly implementing the above discussed monetization strategies for their dApps. For instance; how Appinventiv helped Asian Bank Make crypto-centric banking solutions mainstream.
dApps low development cost, reliability and high security, make it an irreparable business approach for future applications. Now,all you need to do is find reliable dapp development servicesfor your dApp development.
How Can Appinventiv Help You With dApp Development?
Appinventiv is a renowned app development company that serves you with a whole package – a team of Blockchain developers, designers, and managers, who know this tech inside out and employ prerequisite tools and languages to develop a decentralized ecosystem for your business.
Our rich pool of blockchain services include;
- Blockchain app consultation
- MVP development
- Smart Contact development
- End-to-end dApp solutions
- IEO ICO services
- Crypto exchange services
- Custom blockchain solutions and so much more
Allow us to tap your business into a decentralized ecosystem, Talk to our blockchain experts now.
THE AUTHOR
Chirag Bhardwaj
Blockchain Evangelist
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