zkSync 101: Everything you need to know about L2 blockchain
zkSync is a layer 2 solution for transferring Ether and ERC20 tokens. Let’s review it.
Hacken is launching a monitoring tool. Get details and join our beta program
Some terms from the blockchain realm might appear hard to understand. A lot of confusion surrounds such words as DeFi and dApps even though they are literally omnipresent in blockchain-related blogs. It should come as no surprise. After all, these are all neologisms that appeared not so long ago. Let’s clarify the difference between them.
DeFi is a broader term that combines any technological implementation of decentralized finance. dApp is a more specific term applying to all decentralized apps (apps connected to the blockchain).
The opposite of centralized finance, DeFi is a catchy umbrella term that encompasses P2P financial services. These P2P financial services run on public blockchain networks. No central authority governs them. Few words are more abstract than this one. DeFi represents a radically new vision of banking based on the principles of trustlessness, transparency, and immutability. DeFi includes a few thousand applications related to financial services like lending, trading, exchanging assets, etc. The Ethereum network powers those services.
According to the legend, the term itself appeared in August of 2018 in a Telegram chat by a group of businessmen and ETH programmers. Undoubtedly, “DeFi” sounds just like “defy” intentionally as it reflects the essence of the concept. However, DeFi actually existed long before it finally got its name. Bitcoin is basically an example of a classic DeFi project since it has no central authority as it is running on its own blockchain and doesn’t require any intermediaries.
dApp (Decentralized Application) is an application that interacts with a blockchain in one form or another. The term “dApp” denotes any of the existing decentralized digital applications powered by the blockchain or P2P networks. The absence of a single point of management is the key characteristic of all dApps. Smart contracts, or self-executing pieces of code, are a backend mechanism that lets users interact directly with the dApp.
This is the reason why most dApps are running on the Ethereum network which is the mother of most smart contracts. However, dApps are not limited to Ethereum. There are indeed dozens of chains that support dApps.
The most popular DeFi dApps include:
DeFi dApps are an impressive alternative to traditional banking services. They will grow in popularity due to the unique features of blockchain networks. The full list of DeFi dApp is available on dApp Radar.
Non-DeFi dApps include games, exchanges, collectibles, marketplaces, and social apps. Even though most dApps facilitate peer-to-peer transactions, not all decentralized applications are DeFi dApps. One can come across a variety of dApps for purposes other than meeting the financial needs of users. Insurance, gambling, developments, social media, and health are only a few categories of dApps.
A decentralized application is the most overlooked part of the Web3 ecosystem in terms of security. Most projects only audit smart contracts paying little attention to off-chain vulnerabilities. In fact, any app sending or signing transactions, storing private keys or seed phrases, reacting to blockchain events, indexing blockchain data, or using message signing for authentication is at risk. All DeFi dApps and non-DeFi dApp need robust security. To that end, Hacken offers dApp Audit to close the gap and provide even more security to Web3 projects.
Enter your email address to subscribe to Hacken Reseach and receive notifications of new posts by email