September 27, 2022
How Much Does It Cost to Build a dApp?
As blockchain technology is steadily gaining momentum in the web space, larger numbers of dApps emerge to transform the Internet we’re used to into the new Web3 universe. Decentralized apps are the future of the digital market, uniquely designed to meet the needs of decentralization and privacy that modern users cherish.
That’s why the pace of dApp market expansion is truly amazing. This industry has managed to rise from $10.5 billion in 2019 to over $25 billion in 2022. Over 2.7 million people use dApps every day. What’s more, the CAGR of dApp market growth is estimated at over 56%, meaning that by 2027, the market will have a market cap of $368 billion or more. These figures suggest it’s high time to join the booming niche and monetize your business ideas with winning dApps. If you’re unclear about how much such an enterprise can cost, read on to find all data about dApps, the breakdown of dev costs, and the blockchain app development process step-by-step.
Main Features of a Decentralized Application
Let’s start with the basics – what is a dApp, and how does it differ from a regular app?
A dApp is an acronym for a “decentralized app,” which means that such apps don’t rely on a centralized server or back-end hardware to provide their services. Instead of a server, dApps rely on Web3 technologies, like blockchains or oracles, that host all core logic and guarantee their back-end operations. This architectural peculiarity makes dApps securer than offline or cloud server-based apps, ensuring that all transactions on dApps are completely tamper-proof.
Given these specifics, most dApps possess the following features:
- They run on a blockchain.
- They have no downtime and censorship.
- They provide top-notch user privacy.
- They use smart contracts to complete transactions between users.
- They use open-source code and operate autonomously without a single, centralized controller.
- Miners and contributing nodes are remunerated in native tokens for their contribution to dApp’s activity.
- Users can access dApp functionality in exchange for native tokens.
All these features might seem to benefit Web3 technology, but some architectural solutions behind dApp are a source of costlier and more problematic maintenance. Unlike a centralized browser, operation in a distributed network also involves a performance overhead. Besides, users still suffer from poor UX in some dApp use cases because they typically need to connect third-party wallets to replenish their balances and access the dApp functionality.
dApp Architecture and Tech Stack
Now let’s stop on the workflow and architecture of a dApp to see how it works, giving you a better idea of the components you’ll need to create with your dev team. So, the key architecture components any dApp has include:
- The underlying blockchain.
- Smart contracts.
- Front-end (user side of the dApp).
- Ethereum Virtual Machine (EVM).
In terms of the tech stack, dApp creation typically involves:
- Blockchain: you may use any blockchain as a basis for your dApp. The most popular blockchains for dApps include Ethereum, Solana, Polkadot, Avalanche, TRON, Polygon, and EOS, among others. So, you will need a specialist with a blockchain programming tech stack to build the core dApp architecture for your project and develop the smart contract logic.
- Web3 tools: frameworks (e.g., Truffle, Hardhat, Brownie, Embark, or OpenZeppelin).
Examples of Decentralized Apps
The dApp market is rapidly expanding, with hundreds of innovative digital products launched daily. Here are some dApp examples to illustrate the use cases for the blockchain mobile app category.
- Exchanges. Decentralized exchanges (DEXs) have risen in response to users’ need for more freedom and control over their funds in the crypto space. The present-day DEXs that enjoy the highest popularity are Uniswap, PancakeSwap, and Airswap.
- Healthcare advice dApps. Rarenote is a medicine advisor, and insurance dApps are Nexus Mutual and Etherisc.
- NFT marketplaces. NFT popularity is on the rise, so artists and NFT collectors are always searching for convenient marketplaces for minting, trading, and storing NFT items. Some famous examples are Opensea, Rarible, and SuperRare.
- Money management dApps. Users increasingly adopt DeFi apps for transactions, investment, expenditure management, etc. Some of the best-known dApps in this category are Aave, DeFi Pulse, Gemini, Gnosis, and Groundhog.
- DAOs. A DAO is an acronym for decentralized autonomous organizations. The most famous DAOs are DASH, MakerDAO, and Augur. These dApps run based on a predetermined set of rules and don’t have any centralized leadership.
How to Build a Decentralized Application? A Business Owner’s Perspective
So, how to build a blockchain app from day one to the final launch? What should a businessperson know about how to develop blockchain applications to ensure that their project will be done without flaws and friction? Here is a step-by-step guide on bringing your blockchain app ideas to life.
#1 Get Clear about Your Business Idea
A crystal-clear business idea is what can get your dApp project going. Should it be a p2p lending platform, a blockchain game, or an e-wallet? Your app type determines who you can entrust with this task, as some development agencies know how to develop a blockchain wallet but lack expertise in P2E gaming, etc. Besides, your provider should understand the type of app to prepare a list of features and functionality for negotiation, and this list will affect your project’s price and time-to-market.
#2 Specify All Tech Requirements
Giving your developer a concise set of instructions is half of the development work’s success. So, before paying for the project and starting the process, you should clarify the following parameters of the expected product:
- Your UX expectations
- Type and volume of data you’ll need to store on the blockchain
- Approach to data management
- Security considerations
- Method of transaction handling
#3 Do Some Research
You’ll already have a well-articulated business idea based on steps #1 and #2. Now it’s time to conduct research and clarify what blockchain and web development technologies are required to bring your idea to life. There are several variants of popular, efficient blockchain platforms you may utilize: Ethereum, Polygon, Polkadot, Avalanche, Solana, etc. Thus, you should compare their functionality and discuss the choice of technology with your developer to arrive at an optimal tech stack for your project.
#4 Build a Prototype and Test It
A prototype is an essential first step in any large-scale digital project. It helps you visualize the core functionality and design aspects to see whether your app is marketable, efficient, and viable or not. A prototype can be successful if it illustrates your business idea in detail and communicates the value of your app to the target users.
#5 Build an MVP and Test It Again
After a thorough expert review of the prototype’s functionality and its field testing with the target audience, you can incorporate the collected feedback to improve the app’s architecture and features.
The next step in the dev process is launching a minimum viable product – or MVP – that already works as a full-scale app and allows users to evaluate the app. Once the MVP is tested with real people and proves viable, your provider can incorporate the final changes in the MVP for the full-scale product launch.
How Much Does It Cost to Develop Your Own dApp?
Now that you know how to build a blockchain application, it’s time to understand the mechanics of calculating the cost of blockchain apps. This factor is often decisive for businesses on a budget, so you should weigh all project parameters and estimate the final quote to make an informed decision.
- Size of the developer
Working with a small firm with a team of under 50 employees can cost anywhere from $2,000 to $25,000 for a simple app. At the same time, hiring a mid-sized firm raises the check to around $25,000-$200,000. Large, reputable companies charge much more for dApp development, starting at $300,000-$450,000.
The domain in which your business specializes also affects the quote. For instance, developing a healthcare dApp differs from a real estate dApp, and you should be ready to pay extra for cutting-edge crypto projects. For instance, if you want to create a blockchain-based social media network, be ready to pay $45,000-$100,000+, and a financial dApp usually costs $50,000+.
- App’s complexity
The dApp’s complexity and the number of features are the main price determinants. What consensus mechanism will your dApp utilize? On what platform will it be based? What mix of programming languages will you need to apply to build the final product? What are your UI/UX requirements and API integrations? How many security layers and user authentication steps will you use?
All these issues are laid out in the project’s technical specifications and raise the price as you add new points to the list. This way, a simple app can cost around $15,000-$35,000, while a mid-complexity app will require $30,000-$100,000 for completion.
- App type
The type of dApp product and service it will render to users also plays a role in the cost estimation. To create a crypto wallet, you need to hire a developer who knows how to build a blockchain-based wallet. If you want to launch an ICO or crypto exchange, you’ll need to find a provider specializing in this product type.
- Developer’s location
Needless to say, the destination country of your outsourcing also plays a role in the final cost of your dApp. Developer rates vary broadly across the world. Thus, dApp coders and engineers charge, on average, $70+ in North America, $30+ in Eastern Europe, and $10+ in Asia. As you can see, the rates are very different, resulting in 3x-10x fluctuations in the final quote. Focus on these criteria when calculating the blockchain cost for your future dApp. Avoid providers who set vague pricing terms and offer a fixed-budget project, as you may incur hidden costs in the process and exceed your initial budget.
As you can see, launching a dApp may not be as costly and complicated as you might have thought. The dApp market is quickly growing and diversifying to meet the Web3 user needs and demands for innovative apps. So, you can build a robust, reliable, and popular app hassle-free if you find a dependable blockchain provider. Creating a blockchain-powered app shouldn’t be a problem if you come to Artkai. Talk to our managers to see that we can handle your project at a reasonable cost, keeping to the highest tech standards and helping you nail the market with stellar dApp products.
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