Decentralized app store could drive crypto to more centralization

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The estimated windfall that Apple got from its App Store in 2020 is $ 67 billion. This is an increase from $ 50 billion in 2019, an increase of 28%. Even though the company has cut its commissions for small developers, the App Store remains a major component of Apple’s bottom line. And it’s not just Apple that is slashing developer revenues: on Android, the world’s most popular mobile operating system, the Google Play Store grossed $ 38.6 billion in 2020.

That’s over $ 105 billion in revenue from the two major app stores combined. It’s no wonder that regulators in many countries are carefully examining whether there is sufficient competition in the market. It’s no surprise, then, that Coinbase, the most visible and well-known crypto exchange in the Americas, also wants to be the gateway to the decentralized application economy.

But what do we sacrifice when we replace one keeper with another? Is it jeopardizing decentralized ethics and the accessibility of all that is sacred to many believers in crypto? These are important questions that deserve to be debated as we build on our momentum and move further into the mainstream.

Related: Decentralization vs. centralization: where is the future? Expert response

The 80/20 rule

Vilfredo Pareto was right with his 80/20 rule: 80% of income comes from 20% of customers. However, in the case of Apple’s App Store, it’s more like the 95/2 rule: 95% of revenue comes from the top 2% of apps.

Suppose a decentralized app store (DApp) reflects a similar reality, where the best performing apps generate the most revenue. This means that any DApp store that has been successful in securing the most popular apps would have a huge advantage. The best-funded platforms would spend lavishly to obtain exclusivity and secure the status of guardian. Then, anyone who wants to access the best applications should go through this gatekeeper.

The monopoly elements of any app store are what make the economy so lucrative. If you own the rails you own the profits, it is that simple.

But the 80/20 rule shouldn’t extend to the Web 3.0 economy. Rather than many benefits for a few, its many benefits for many more, with users participating in the governance, growth, maintenance and day-to-day functioning of the ecosystems they favor. The ownership aspects of the Web 3.0 economy distribute rewards to ecosystem participants more equitably based on their contributions. It’s a more balanced dynamic that offers a new way of doing business.

Related: Is A New Decentralized Internet, or Web 3.0, Possible?

Creation of the Web 3.0 DApp store

What will it take to ensure a truly decentralized distribution of DApps? We need a DApp store that meets a few criteria:

Governance above all, a DApp store would be managed by the community. It would take a decentralized autonomous organization to vote on all governance issues, such as committees, security, etc. Ownership benefits would be distributed to the community according to its governance structure. Funds should also be set aside for the organization to manage application verification, secure the system, and maintain the community. Tokenomics offers an opportunity to do some very interesting things to get developers to use the platform exclusively and to perform other key tasks like supporting the distribution infrastructure and other essential technologies. Interoperability users need to be able to move freely between different DApp stores, taking their applications (and data) with them. There can only be one DApp store to rule them all.

Related: Game Theory Meets DeFi: Bouncing Ideas Around Symbolic Design

Applications are at the heart of the digital economy, which will continue as we move towards Web 3.0. Ramps to decentralized finance, non-fungible tokens, and other emerging digital assets require mobile hotspots that bridge the gap between those with laptops and those who only access the internet through mobile devices.

Were in the middle of the transition from Web 2.0 to Web 3.0. While gatekeepers remain in a position of strength, they will continue to pursue user growth alongside decentralized protocols seeking access points for new users.

When we truly make the transition to Web 3.0, we’ll likely see DApps serving smaller niches than today. Well see a vibrant ecosystem of more targeted DApps developed by compact teams.

Related: How NFT, DeFi, and Web 3.0 Relate

Well, also see the applications deconstructed into components. For example, a decentralized exchange will be deconstructed into multiple layers: the user-oriented front-end, the aggregator back-end, and the liquidity provider as infrastructure. This is akin to the evolution of the microservices monolith in the software cloud infrastructure space.

Without real decentralization in terms of applications, we simply replaced one keeper with another. The key here will be the community’s commitment to supporting a wide range of app store gateways.

What’s at stake?

The risk is that, on our inevitable path to the mainstream, convenience and ease of use outweigh decentralization. In fact, this is often the reason centralized gatekeepers emerge: They make things less complicated, which makes things more accessible to the masses.

As the crypto community works together to build a thriving digital asset economy that benefits the majority, we all need to keep these tradeoffs in mind. We absolutely need to make digital assets easy to understand and accessible while rejecting any argument that centralizing power in the hands of the few is a valid compromise on the fast track to the general public.

We can and must step back to protect what makes our shared vision so powerful: a future accessible to all.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research before making a decision.

The views, thoughts and opinions expressed here are the sole authors and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Diane Dai is the co-founder and chief marketing officer of DODO, a decentralized exchange of digital assets based in Singapore. She is a pioneer of the Chinese DeFi community and has extensive experience in marketing, social media management, and business development. Before founding DODO, she spent time at DDEX and CypherJump.

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