Definition
A decentralized application (dApp) is software whose important functions run through a decentralized network, commonly using smart contracts on a blockchain. Its interface may look like an ordinary website, while transaction rules and shared state are handled by the underlying protocol.
How It Works
A user connects a wallet, reviews a requested action and signs a transaction. Network participants execute or verify the contract, and the application displays the resulting state. Examples include token exchanges, lending markets and blockchain games. Developers may combine on-chain contracts with off-chain storage, indexing and other services.
Key Considerations
A dApp is not necessarily decentralized in every component. Upgrade keys, hosting and data sources can give specific operators considerable influence. Connecting a wallet does not itself transfer tokens, but approving token spending or signing a transaction can grant important permissions. Users need to distinguish the interface, the contract and the network, because each introduces different dependencies and failure modes.