How to Make Money with dApps in 2023 – A Quick Guide
Whenever we talk about blockchain, there are two particular terms that we generally come across – cryptocurrencies and dApps or decentralized Applications. While cryptocurrencies are something that has gained more attention from investors, dApps have become more popular among businesses.
Today, businesses from different industries are developing dApps to increase their revenue. They either develop dApps to streamline their business processes and manage their data or to provide services to customers.
If you are a business owner interested in knowing how to make money with dApps, you have landed at the right place.
Here, we will list down the most popular and trusted ways to make money with dApps. But before that, let’s discuss what exactly is a dApp and why you should develop one.
What is a dApp?
A dApp is an open-source application that runs on a blockchain platform. Unlike traditional apps, the app data is not managed on a single device (server). Instead, dApps store and retrieve data from a blockchain, which is a peer-to-peer network. Due to this arrangement, dApps are not under the control of a single entity and there is no single point of failure.
Here are the key characteristics of a dApp:
- A dApp is open-source, so no single entity has control over its operation.
- All the app data is public and readily available.
- It’s impossible to manipulate the data stored in a blockchain, and thus no one can alter the dApp data too.
- By utilizing smart contracts, dApps protect the real identity of the users.
Is it a Good Idea for Your Business to Develop a dApp?
Businesses create dApps to decentralize their data and protect it against manipulation. Also, employees can connect to the blockchain to retrieve the information they need without having to go through the formalities essential for connecting to the centralized server.
It is possible to develop dApps that allow users to perform a variety of tasks, such as cryptocurrency trading, staking, fractional ownership, NFT trading, and much more. You can create such apps and utilize various monetizing strategies to create a practical business model.
How Do dApps Make Money?
Now that you have a good understanding of what a dApp is and why businesses should develop them, it’s time to figure out how to make money with dApps. Here are some of the most popular monetizing strategies that you can adopt to generate revenue from your dApps.
1. Transaction Fees
Charging transaction fees is one of the most common and viable ways to generate revenue from your dApp. Whenever users buy something from your app, they will be charged a small transaction fee. As the app owner, you will directly receive the transaction fee.
Usually, you need to decide the amount or percentage of the transaction fee. However, it’s essential to make sure that the fee you charge per transaction is reasonable. If your dApp charges a fee that is too high, users will look for other alternatives to get the same services at a lower price.
The subscription model is yet another great way to monetize your decentralized application. You may charge your users on a monthly, quarterly, or yearly basis to let them access your dApp. Alternatively, you can also implement the usage-based model under which you charge users only for the services they opt for.
The best thing about the time-based subscription model is that it allows you to predict your revenue. Also, it is a great way to earn handsome returns in the long run.
Showing in-app ads is another option to make money from your dApp. This monetization model is relatively new for dApps but it has the potential to generate a good amount of revenue. You can display ads at a particular section of your dApp or whenever a user navigates between different screens.
If your app has a significant number of users, running advertisements can earn you good revenue. However, keep in mind that you should run advertisements only if your app gives free access to some or all of its features. Users will not like to see any in-app ads if they have already paid for your dApp.
This monetization model is highly popular for new dApps with innovative features. If you want to raise funds for your dApp, crowdsale becomes the most viable option. You need to create tokens and issue them to users in exchange for their investments in your project.
Although this monetization method can help you generate a large amount of capital, you need a solid marketing campaign to attract investors. While going for crowd sale, you need to tell investors the innovative features of your dApp and the profit distribution strategy. This helps them to decide whether they want to invest in your dApp or not.
5. Premium Features
One more method to make money from your dApp is to charge users for accessing certain features. The idea is to make the basic features of your dApp available for free, while users have to pay a fee for accessing advanced features.
A typical example of this subscription model is a music app that allows users to listen to songs for free. However, users need to subscribe to its paid plan if they want to download songs and listen to them offline.
Taking donations to support your dApp is a monetizing method that you should consider if your project aims to solve some social issue. You can ask people to donate money to fund the research and development of your dApp.
You can simply add a donate button in your dApp or its official website and integrate a payment gateway to make the donation process seamless for users.
7. Referral Marketing
Referral marketing is a great way to boost the revenue of your dApp. When it comes to referral marketing, you introduce your dApp’s users to the products and services offered by other businesses through the app itself.
Depending on the referral program, you’ll earn a commission whenever a user visits a third-party website/app or buy their products or services through the referral link embedded in your dApp.
How to Develop a dApp for your Business?
The first and foremost thing required to build a dApp is extensive knowledge of the technologies available for blockchain development. For instance, if you want to build a dApp on the Ethereum blockchain, you need to have expertise in Solidity programming language.
Here are the key steps that you need to follow for developing a dApp:
- Define your dApp idea and assess its feasibility.
- Choose the features to integrate into the dApp.
- Select an appropriate blockchain platform.
- Design the user interface and user experience.
- Start the development work.
- Test the dApp to find any bugs or issues.
- Deploy the application.
If you do not have an in-house blockchain development team, you can consider hiring blockchain developers or a blockchain development company. You can discuss your dApp idea with them and work together to develop a fully-functional model of your dApp.
Also, hiring a specialized blockchain development company is far better than an in-house team due to the less development costs and impressive work quality.
Summing it Up
With the increasing adoption of blockchain technology, there has been a significant increase in the number of dApps in the market. Businesses today are developing dApps to support their operations and explore new growth opportunities.
If you want to earn money from your dApps and boost their earning potential, you can consider implementing the strategies mentioned above.