Expert Opinion: The real benefits of blockchain are right here, and we've been overlooking them

This article presents the views of Roham Gharegozlou, CEO of Dapper Labs. A common theme in this industry is constantly introducing the benefits of decentralization or removing control to people. However, developers often sacrifice a crucial aspect – the benefits of decentralization – in order to make the technology more accessible.

Dapper Labs has already launched several well-known projects, with CryptoKitties being one of the most popular blockchain games to date. They recently announced the release of NBA Top Shot, a new ecosystem based on blockchain developed in collaboration with the NBA and NBPA.

Roham mentioned that decentralized products should uphold the following three promises for customers:

1. Censorship resistance: Your belongings are secure and cannot be tampered with arbitrarily.
2. Self-sovereignty: You own and control your assets, identity, and data, without being controlled by any individual or institution.
3. Open ecosystem: Everyone can derive value from new contributions, whether they are developers or users.

The values of censorship resistance and owning one's data are relatively easy to understand. Another major benefit that is often overlooked is the open ecosystem, which is decentralization.

Open ecosystems allow anyone to contribute to the platform and receive token rewards for using, developing, or investing. In Ethereum, we see the most successful open ecosystems emerging in decentralized finance (DeFi) — DAI.

MakerDAO's DAI is a stablecoin used by many lending platforms like Dharma and Compound. These decentralized lending applications provide competitive interest rates, using DAI to attract borrowers and allowing lenders to profit from their assets.

Compound Finance and Uniswap have transformed MakerDAO from a standalone entity to a composability structure. These open ecosystems are multi-layered, utilizing smart contracts from various sources to create endless possibilities. For example, Opyn is a decentralized trading platform built on Ethereum, Compound, Uniswap, and MakerDAO's DAI.

Different combinations can create protocols and systems that were previously impossible. These emerging systems will be larger than any individual original system.

Creators, users, and developers will all benefit

In an open ecosystem, users, developers, and original creators can all derive value. Users have more choices and ultimately decide what matters most; developers can use each other's code like Lego blocks, accelerating software innovation.

Developers building on existing code, in many ways, market the original creators' products, further expanding the brand's influence. Users can access more services to increase benefits, with trust established through cyclical relationships among all participants.

Why aren't there more open DApps?

By now, readers should understand the significant long-term benefits of open ecosystems. So, why isn't there more widespread adoption currently? As noted in a previous report, using blockchain games as an example, while developers are creating open games, much of the data is premade, reducing composability, data sharing, and ecosystem openness.

Currently, there is less than a 10% overlap between various blockchain games. Many people choose games based on traditional genres they prefer, with blockchain being an added feature rather than the sole choice for players.

Current choices will determine future development

Many developers are turning to so-called "layer 2" scaling solutions, such as sidechains and the Lightning Network, to reduce the load on the underlying blockchain and provide a better user experience. Major companies are also starting to compromise on decentralization to support higher performance based on blockchain technology.

Especially in the blockchain gaming space, the pendulum seems to be swinging towards more centralized solutions to attract mainstream users. While this means developers can interact with users in a cost-effective manner, it unfortunately signifies that the main benefits of building software in an open ecosystem, such as network effects between developers and users, may not be realized. Roham Gharegozlou concluded:

I hope everyone will push the pendulum towards an open ecosystem and the currently unrealized composability. An open ecosystem will provide more support for customers and developers, and I believe it can ultimately create more value for everyone involved.

Further Reading

• Can stars be collected too? NBA to collaborate with CryptoKitties team to launch digital collectibles platform
• More than a year after going viral, CryptoKitties are still active

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