In 2023, amid the enthusiasm for decentralization and blockchain technology, a pertinent question reverberates through the digital landscape – how do dApps make money?
The transformative evolution of decentralized apps (dApps) has led to a revolution in app development, attracting a surfeit of entrepreneurs and developers.
This blog explores the fascinating world of dApps, providing an insightful journey into how they earn money while dispelling uncertainties.
So, if you’re curious about the economics of this decentralized realm, you’ve come to the right place!
What is a decentralized application (dApp)?
A decentralized application, often known as a dApp, is a software application that operates on a blockchain or peer-to-peer network instead of a single computer.
This eliminates the need for a central authority or intermediary, such as a tech company or bank, to manage transactions or changes in the application.
dApps are software solutions incorporating blockchain technology to achieve decentralization and foster user trust.

dApps share several key characteristics:
- Open Source: dApp’s core source code is open and available to all. This transparency means that changes are decided collectively by user consensus, or most users agree on them.
- Decentralized: All data and records of operation for a dApp are stored on a public, decentralized blockchain to avoid pitfalls of centralization.
- Incentive: dApps typically use tokens or digital assets to reward network participants, creating an economic system within the app.
- Protocol: dApps must generate tokens and implement a consensus mechanism (Proof of Stake, Proof of Work, etc.) to confirm changes or transactions.
From games and marketplaces to decentralized exchanges and social networks, dApps span many categories and drive much of the excitement around blockchain and web development today.
Exploring the potential of decentralized apps? Let our expert insights be your guide! Check out our article on building decentralized apps to kickstart your journey.
How to Create a Decentralized Application (dApp): A Step-by-Step Guide?
Creating a decentralized application (dApp) is an exciting endeavor that requires careful planning and execution.
Below is a step-by-step guide to navigate through this process.
Step 1: Define Your Idea
Start creating a dApp by first crystallizing the core idea that drives it. It’s crucial to pinpoint the problem you aim to solve and the value you want to add through your dApp.
Having a well-defined concept provides clarity and sets a solid foundation for the successive stages of the development process.
Step 2: Choose a Blockchain
The next step involves selecting a blockchain platform that is in sync with the requirements of your dApp. The blockchain you choose significantly determines the programming languages you will use, the available consensus mechanisms, and the scalability options you can leverage.
Ethereum is a popular choice among developers due to its mature development environment and robust support system for smart contracts.
Making an informed decision at this stage can significantly impact the ease of development and the success of your dApp.
Step 3: Design the dApp
This step focuses on laying out the user interface (UI) and crafting a seamless user experience (UX). It is crucial to plan how users will interact with the blockchain meticulously, manage their accounts and private keys, and handle off-chain data.
The design phase sets the tone for user engagement and overall usability of the dApp, making it a vital step in the development process.
Step 4: Develop the Smart Contracts
Developing smart contracts is a core aspect of building most dApps, as they automate transactions and actions based on predefined conditions. It begins with choosing a suitable programming language; Solidity is commonly used for Ethereum, while Rust is a choice for Solana.
The smart contracts need to be coded with a focus on security and optimized for the dApp’s functionality.
Ensuring the smart contracts are well-structured and secure is imperative for the trustworthiness and success of the dApp.
Step 5: Create the Backend
Developing the backend involves creating code that will interact with your smart contracts.
This could span to include server-side code, which is essential for handling data that resides off the blockchain, often referred to as off-chain data, or a frontend JavaScript application that facilitates direct interaction with the blockchain.
Step 6: Develop the Frontend
The task of developing the front end focuses on building the interface through which users will interact with your dApp. It is advisable to employ a programming language such as React or Angular, which are well-suited for creating a user-friendly, intuitive interface.
It’s imperative to ensure that the front end is designed to enable effective communication with the blockchain, allowing it to read data and send transactions seamlessly.
Step 7: Test Your dApp
Testing your dApp is crucial to ensure that it functions as intended and maintains high security. This stage involves conducting various tests, including unit, integration, and manual tests.
These tests are instrumental in identifying and rectifying any bugs or vulnerabilities, ensuring the dApp is robust and ready for deployment.
Step 8: Deploy Your dApp
Upon satisfactory completion of the testing phase, it’s time to deploy your dApp. This involves launching your smart contracts on the main network of the blockchain platform you have chosen. Concurrently, you should make your frontend available to users.
The deployment phase marks the transition of your dApp from a development stage to a production stage where real users can interact with it.
Step 9: Maintain and Improve
The process doesn’t end at deployment. Post-deployment, it’s crucial to continuously monitor your dApp for any emerging issues and implement the necessary improvements. This phase ensures the dApp remains functional, secure, and user-friendly.
It is advisable to gather feedback from your users to understand their experiences and needs better. Based on the feedback received, consider adding new features or adjusting to enhance the overall user experience.
This ongoing maintenance and improvement cycle helps keep your dApp relevant and valuable to its users.
How Do dApps Make Money?
Decentralized applications (dApps) have unique methods of generating revenue.

While traditional apps usually rely on advertising, subscription, or service fees, dApps have different models that exploit blockchain’s unique characteristics.
Here’s how dApps make money:
1. Transaction Fees
One of the key ways dApps make money is by collecting transaction fees.
This model is quite familiar to anyone who’s used financial or banking services, where a small charge is applied to transactions such as money transfers or payments.
In the context of dApps, this fee is often termed as “gas”.
Here’s how it works:
Every time a user interacts with a dApp – say, by executing a trade in a decentralized exchange, breeding a virtual pet in a game, or making a bid on a piece of digital art in a marketplace – they’re creating a transaction that needs to be validated and added to the blockchain.
This process consumes computational resources and storage on the network and thus incurs a cost known as a “gas fee.”
Gas fees are typically paid in the native cryptocurrency of the blockchain the dApp is built on – for example, Ether (ETH) on the Ethereum network.
The gas fee serves two purposes:
- Network Sustainability: It compensates the network’s nodes (the machines maintaining and validating the blockchain) for the resources they’ve expended in processing the transaction.
- Spam Prevention: It serves as a deterrent for malicious actors who wish to spam the network with meaningless transactions, as they would need to pay a fee for each one.
A portion of this transaction fee can also go to the dApp’s developers as a form of revenue. This is usually built into the dApp’s smart contracts (the blockchain-based code that governs the rules and operations of the dApp).
2. Tokenization
Tokenization is a significant aspect of dApp revenue models, leveraging the uniqueness of blockchain technology to create new ways for dApps to generate income.
What is Tokenization?
In the context of dApps, tokenization is creating a specific digital asset (a token) managed on a blockchain. These tokens can have various uses within the dApp ecosystem and hold a certain value that can be traded, much like a currency.
Types of Tokens
Generally, there are two types of tokens: utility and governance.
- Utility Tokens: These are used to access particular services or features within the dApp. For instance, users might spend tokens in a decentralized file storage dApp to purchase storage space.
- Governance Tokens: These grant holders have the power to influence the development and decision-making process of the dApp, essentially allowing them to vote on changes.
Monetization Through Tokens
The dApp developers usually hold a significant portion of the total token supply, especially when the token is newly issued. This is one of the primary ways that dApps make money.
When users purchase tokens, they invest in the dApp. If the dApp becomes popular and demand for the tokens increases, the token price can rise, generating profit for the token holders, including the developers.
Moreover, certain activities within the dApp, such as transactions or accessing premium features, may require these tokens, creating an ongoing demand and, thus, a revenue stream.
Risks and Rewards
Tokenization can create significant wealth if the dApp becomes popular. However, it’s important to note that it also comes with risk. The token’s value may fall if the dApp does not gain traction.
Also, the regulatory environment for tokens is complex and evolving, so compliance must be a significant consideration during token creation and issuance.
3. Premium Services
In the context of decentralized applications, premium services encompass a variety of enhanced features and functionalities that users can access for a fee.
This business model is similar to traditional apps where users pay for an upgraded version or added features, making the dApp experience more robust, efficient, or convenient.
Here’s a closer look at what this could entail:
Faster Transaction Times
Blockchains often prioritize transactions based on the associated fees, with higher fees resulting in faster processing times.
A dApp could offer a premium service where users’ transactions are processed more quickly, subsidizing higher transaction fees or using an off-chain solution for speedier processing.
This can be especially attractive in high-demand environments where users may want their transactions processed quickly.
Enhanced Security Features
While blockchain technology is inherently secure, there’s always room for added layers of security.
For instance, dApps can offer premium services such as increased encryption, multi-signature transactions, or advanced fraud detection.
Users, particularly those dealing with large amounts of cryptocurrency or sensitive information, may be willing to pay for these added security features.
Additional Functionality
dApps can offer other functionalities as part of their premium services. This could be anything from advanced analytics and reporting tools to exclusive content, to enhanced customization options. The specifics will depend on the nature of the dApp.
For example, a decentralized game could offer premium items or abilities, while a DeFi dApp might offer advanced trading tools.
The key to successfully implementing premium services is balancing the need for revenue with a good user experience. It’s crucial to ensure that essential functions are accessible to all users while more advanced or convenient features come with a premium.

4. In-App Purchases
In-app purchases are a popular revenue model for dApps, especially those involved in gaming and marketplace functionalities.
This strategy allows developers to provide the dApp for free or at a low cost, while offering users the ability to enhance their experience through various purchases within the app.
Here’s how in-app purchases work in dApps:
1. Digital Assets and Collectibles
In many dApps, particularly games, users can purchase digital assets. These could range from collectible items, such as digital art or rare virtual creatures, to utility items that give players an edge in the game.
These items often have value within the game ecosystem and can even be traded or sold on secondary markets.
2. Unlocking Features or Abilities
Some dApps allow users to unlock new features or abilities through in-app purchases.
For instance, a user might purchase the ability to perform faster transactions, gain access to premium content, or unlock new areas within a game.
3. Tokens for Transactions
In dApp marketplaces, in-app purchases often take the form of tokens needed to carry out transactions. These tokens can be used to buy or sell goods and services within the dApp.
4. Subscription Services
Although not common, some dApps might offer premium subscription services as an in-app purchase. Subscribers might receive benefits like reduced transaction fees, early access to new features, or premium customer support.
A key advantage of in-app purchases in dApps is that they leverage blockchain technology, ensuring transaction transparency and security. The items purchased have provable ownership, thanks to the nature of the blockchain’s immutable records.
However, dApp developers must balance the need for revenue with a positive user experience. Overemphasis on in-app purchases, especially those that give some users an unfair advantage, can deter users and hinder the growth of dApp.
Hence, implementing in-app purchases needs to be done thoughtfully and strategically.
5. Staking Rewards
In the realm of blockchain, staking refers to the act of actively partaking in transaction validation processes, akin to mining, on a Proof-of-Stake (PoS) blockchain. This approach bolsters the security and effectiveness of blockchain networks.
Staking Process
In most PoS-based dApps, users can “stake” their tokens, meaning they hold their tokens in a wallet to support the operations of a blockchain network.
These operations include transaction validation and governance. Staked tokens are temporarily locked and can’t be spent or sold.
Rewards
Users who stake their tokens are rewarded for participating in the blockchain network. Rewards typically come as additional tokens, effectively serving as interest on their staked amount.
The rate of return varies greatly depending on the blockchain network and the amount of staked tokens.
Developer Revenue
Developers can set aside some tokens during the token creation phase. They can stake these tokens and earn staking rewards, which can then be used to fund development or sold for other cryptocurrencies or fiat, creating a stream of revenue.
Value for Users
For users, staking can be attractive because it provides a way to earn passive income.
However, it’s worth noting that staked tokens are typically subject to a lock-up period where they can’t be transferred or sold, so users need to be comfortable with the potential risks and illiquidity.
dApp Utility
In some dApps, staked tokens also grant users voting rights or other benefits within the ecosystem. This adds an extra utility layer and incentivizes users to stake their tokens.
It’s worth noting that while staking can be a lucrative revenue model for dApps, it comes with its own set of challenges. These can include smart contract vulnerabilities, regulatory considerations, and the need for robust economic modeling to ensure the long-term viability of the dApp.
6. Initial Coin Offering (ICO) or Initial DEX Offering (IDO)
An ICO is a fundraising mechanism similar to an Initial Public Offering (IPO) in traditional finance.
Developers present a white paper detailing the plan for the project, including the need it will meet when finalized, how much money is needed to undertake the venture, what type of money is accepted, and how long the fundraising campaign will run for.
Initial Coin Offering (ICO)
In an ICO, interested investors buy some of the distributed app’s tokens with fiat or digital currency. These tokens are similar to the shares of a company sold to investors in an IPO transaction.
If the money raised doesn’t meet the minimum funding requirement, the money is returned to the backers, and the ICO is deemed unsuccessful.
Initial DEX Offering (IDO)
On the other hand, IDOs are a new fundraising model that offers immediate liquidity of the tokens and open and fair fundraising on a decentralized exchange (DEX).
IDO tokens are immediately available for trading, making the process much more efficient and democratized.
Table 1: A comparative table outlining some key aspects of ICOs and IDOs:
Initial Coin Offering (ICO) | Initial DEX Offering (IDO) | |
Concept | A fundraising method where new initiatives offer their inherent tokens in return for bitcoin or ether. | A new fundraising model where tokens are offered on a decentralized exchange, offering immediate liquidity |
Liquidity | Tokens might not be immediately tradable and might require a waiting period before they can be sold | Tokens are immediately available for trading |
Accessibility | Primarily targeted at early investors and requires investors to trust the developers will build the promised technology | More open and fair as it’s conducted on a decentralized exchange, allowing anyone to participate |
Regulation | Often subject to strict regulatory scrutiny, with potential legal implications if tokens are considered securities | Also subject to regulatory scrutiny, but the decentralized nature might complicate regulatory enforcement |
Risk for Investors | High risk as the value of tokens depends on the success of the project and trust in the developers | Still a high risk, but the immediate liquidity of tokens offers some potential for early exit |
How can Core Devs Ltd. Help You Build Your Money Making dApp?
Decentralized applications (dApps) are reshaping how we think about software and data, providing enhanced security, transparency, and user control opportunities.
Core Devs Ltd offers a suite of dApp Development Services tailored to guide you from the drawing board to final deployment and even beyond.
Here’s a deep dive into our offerings.
01: dApps Ideation and Consultation
We don’t just listen to your ideas; we help refine them. With our dApps Ideation and Consultation services, we facilitate brainstorming sessions, conduct feasibility studies, and provide strategic insights.
We aim to align your business objectives with the immense potential of blockchain technology.
- Expert Consultation: Guided advice on dApp functionality, architecture, and design.
- Feasibility Studies: Assess the practicality and market potential of your dApp concept.
- Strategic Planning: Create a robust roadmap for development and deployment.
02: dApps Design and Development
At Core Devs Ltd, we house a team of seasoned designers and developers well-versed in creating dApps that are both intuitive and feature-rich.
We focus on creating a compelling user experience while ensuring the core blockchain elements of your dApp are unassailable.
- Cutting-Edge Design: UI/UX designs that are both engaging and user-friendly.
- Robust Development: Utilizing leading blockchain frameworks to ensure optimal security and performance.
- Customization: Tailoring the dApp to meet your specific industry needs and objectives.
03: dApps Integration
With our dApps Integration services, you no longer worry about compatibility issues between your existing systems and the new decentralized applications.
We handle everything from developing custom APIs to data migration.
- Seamless Integration: Easy linking of dApps with existing software or systems.
- API Development: Custom APIs to facilitate interaction between different platforms.
- Data Compatibility: Ensuring smooth data flow and functionality after integration.
04: Testing and Deployment
Before any dApp goes live, it undergoes a battery of tests to ensure its performance, reliability, and security meet our high standards. Once approved, we manage the deployment process to guarantee a seamless launch.
- Rigorous Testing: Performance, security, and usability tests to ensure top-tier quality.
- Deployment Strategies: Utilizing best practices for a successful dApp launch.
- User Onboarding: Guides and tutorials to enhance user experience and adoption.
05: Maintenance and Support
A dApp doesn’t end at deployment; it needs ongoing care to ensure its smooth functioning.
Our Maintenance and Support services cover real-time monitoring, timely updates, and a 24/7 emergency support line.
- Ongoing Maintenance: Periodic reviews and updates to maintain optimal performance.
- Real-Time Monitoring: Monitor system health, traffic, and security.
- 24/7 Support: Immediate troubleshooting and resolution of any operational hitches.
Future of Decentralized Application
The future of decentralized applications (dApps) is looking increasingly promising as more industries recognize the potential of blockchain technology.

Several key trends and predictions shape this future.
Greater Adoption Across Industries
While cryptocurrencies and financial applications have been the most common use cases for dApps, other industries are beginning to explore their potential.
Expect to see dApps impacting sectors like healthcare (for secure patient records), supply chain management (for transparent tracking), education (for credential verification), and more.
Regulation and Governance
As the dApp ecosystem grows, expect more intervention from regulatory bodies.
This could pose challenges and opportunities, as clear regulations can encourage more traditional businesses to adopt dApps.
User Experience Improvements
The future of dApps also depends on improving user experience.
This means making dApps as easy to use as traditional apps, including improvements in speed, security, and integration with existing digital infrastructure.
Interoperability
Interoperability, or the ability for different blockchains to interact, will become increasingly important.
This will allow dApps on different blockchains to communicate, creating a more interconnected and efficient ecosystem.
Scaling Solutions
As the number of dApp users continues to grow so does the need for scaling solutions to handle more transactions faster and cheaper.
Look for advancements in layer 2 solutions, sharding, and other innovative technologies.
Table 2: Future Predictions for dApps and Implications
Future Predictions for dApps | Implications |
Greater Adoption Across Industries | More varied and impactful use cases |
Regulation and Governance | Increased legal clarity, but potential challenges |
User Experience Improvements | More user-friendly dApps |
Interoperability | More interconnected blockchain ecosystems |
Scaling Solutions | Faster, cheaper transactions |
Despite these promising trends, the future of dApps will not be without challenges. Issues around regulation, scalability, and user adoption still need to be addressed.
However, with the pace of innovation in the dApp and wider blockchain space, the future of decentralized applications looks bright.
Final Thoughts
As we navigate the dawn of decentralized digital landscapes, understanding how do dApps make money becomes a crucial conversation. The transformative power of dApps is inescapable, setting the stage for a decentralized future.
While the revenue generation models might seem complex initially, they present innovative ways for developers to monetize their efforts while delivering user value.
As regulatory frameworks catch up and the technology matures, the potential for dApps only looks set to grow.
Embracing this change, one might say, is not just a smart move but a decentralized leap towards a future where apps aren’t just built for the users but also by the users.