How to Safely Use DApps - A Beginner’s Guide
DApps can be fun and exciting, but you need to know how to navigate them safely.
New opportunities are popping all in the time in the fast-growing crypto ecosystem. Most exciting new ventures now come in the form of decentralized applications (DApps) that allow you to earn crypto in one form or another.
Read on to learn how to safely navigate DApps so that you can get the most out of the latest crypto opportunities.
What Are DApps and What Makes Them Awesome?
When smartphones blew up about a decade ago, it was common to hear the phrase “there’s an app for that.” The time has come for people to begin saying the same for DApps.
“There’s a DApp for that.”
A DApp is an application that has been built using smart contracts and operates on an open blockchain network without a central authority.
The decentralization aspect of DApps means these apps belong to and are typically governed by their community of users as opposed to a CEO or founder.
Allowing a host of benefits, DApps currently exist for online games, financial services, gambling, trading, collectibles, and more.
Benefits of DApps
Users run the show instead of a company
Provide more economic benefits to users
Resistant to censorship
Provide opportunities not available in centralized services
The most apparent benefit of decentralization is allowing the community to make decisions through voting. Voters are those that use the DApp regularly and thus deserve a say in important decisions. Community governance eliminates or at least reduces the need to trust a team to run the service.
Of course, the most practical benefit of DApps is the economic incentives they provide. In the centralized world, any service you use requires you to pay the company running it. These fees become the company’s revenue. On the other hand, DApp users often give back a share of the amounts paid in fees to the users.
A powerful side effect of having no central authority is resistance to censorship. A company running a truly decentralized application cannot censor the service once the code has been deployed. Similarly, a DApp is resistant to external censorship for the same reason.
New opportunities like DeFi and NFTs have sprung out of the world of decentralized applications.
NFTs, for example, allow you to own virtual items without a middleman that verifies their rarity. An excellent example of this is in the gaming world. In the centralized world, a player’s in-game digital items ultimately belong to the game creators. With NFTs, you can own those items directly and are free to sell or trade them as you please.
Earn fees for providing liquidity, another opportunity presented by DApps. In doing so, you collect trading fees as an incentive for providing liquidity on a decentralized exchange. In the centralized world, liquidity providers require lots of capital and regulatory approval to participate.
Top Security Tips for DApp Users
Unfortunately, the crypto markets are chock-full of scammers. And the same goes for the world of decentralized applications. By taking the following steps, you can mitigate the risk of losing funds to fraudulent apps or scammers.
1) Confirm the DApp you want to use is legitimate and reputable.
Databases like DAppRadar.com and DApp.com publicly post data related to popular DApps on the market. Over there, you can go over the DApp’s on-chain data graphs.
If there’s a sudden drop in users, volume, or market cap, be cautious of the DApp. They may be an issue with it that is driving users away from it.
Furthermore, you should also visit the Telegram, Twitter, or other social media links available to see if what the DApp creators are communicating makes sense. The creators should be communicating actively, especially if the DApp is new. You should also read the reviews available. Only use DApps with a solid track record and a good reputation.
Other than that, the DApp’s code should be audited by a qualified smart contract auditor, such as CertiK. If the smart contract has not been through auditing, fatal bugs that could compromise your assets are a possibility.
2) Use a VPN for public Wi-Fi networks.
Public Wi-Fi networks are risky because hackers could gain access to your internet traffic (including usernames and passwords you type in). To prevent the compromise of your assets, use a VPN when accessing web 3.0 applications through public Wi-Fi.
3) Make sure you’re visiting the correct URL.
Sometimes a scammer will create a fake DApp impersonating a legitimate DApp. They achieve this by making their DApp’s URL similar to the legitimate one. For example, the scammer might switch an “o” with a “0” in the URL. For this reason, you have to double-check URLs.
This method of scamming is known as phishing. You can read more about it here.
Trust Wallet DApp Browser
Arguably the most secure way to access the world of decentralized applications (DApps) is using Trust Wallet. Trust Wallet provides an in-app DApp Browser as well as Wallet Connect to safely interact with DApps across all the most popular blockchains.
Keep in mind that Trust Wallet cannot access assets you store in it, whether coins or collectibles, so your goods are in your hands only. If the app accidentally gets deleted or you lose your phone, the assets stored in your wallet are recoverable using your 12-word recovery phrase. For enhanced security, you may use TouchID or FaceID to prevent foreign access to your wallet.
Security, convenience and industry-wide compatibility provided by Trust Wallet are here for all your DApp needs. Download Trust Wallet today, and get ready to visit your favourite DApps with peace of mind.