What to build on Ethereum? Dapp ideas

So, you are thinking of building a Dapp on Ethereum, but you are still not sure what to build? In this article, I will give a few tips to find some good Dapp ideas.

On Ethereum, Dapps can be categorized in 3 categories:

  • Decentralized finance
  • Game
  • Gambling

I will give you Dapp ideas for each of these categories:

DEX for ERC20 / ERC721 tokens

Dex stands for Decentralized Exchange. The most famous DEX for ERC20 tokens is Idex, and for ERC721 it’s Opensea. It’s important to specialize in one kind of token because their use is quite different. ERC20 tokens are used to represent investments in company (a bit like a stock) whereas ERC721 are used in collectible games.

You make money by charging a fee on each trade. Usually order takers (market orders) pay more than order makers (limit orders), because you want to give an incentive to create some liquidity on your exchange.

The 0x protocol tries to standardize the way trading is done on DEX, and a couple of exchanges use this protocol. However, there are also a lot of exchanges who were built with a custom design, and are still very successful. For example, Idex does not follow 0x nor any other trading protocol.

The most difficult challenge is to attract enough liquidity (i.e make your market active). A good way to do this is to specialize your exchange in a specific niche, instead of targeting all the tokens in existence. Another challenge is to comply with financial regulations related to operating exchanges.

If you want to learn how to develop a decentralized exchange for ERC20 tokens on Ethereum, checkout my video course Dapps in Motion.

ERC721 game (collectible)

Have you heard of Cryptokitties? If you haven’t, that’s a Dapp to collect, breed and sell virtual kitties. Each kitty is represented by an asset in an ERC721 token smart contract. Cryptokitties was a pioneer and inspired many other copycats.

There are generally 4 aspects to this kind of game:

  • Primary market: game creators sell some assets to players. These assets can be virtual characters (kitties, heroes, animal…) or any other kind of assets (dragons, cars, planets, you name it…)
  • Secondary market: Players can trade their assets on any marketplace
  • Interaction between player assets: kitties, heroes, etc… can interact in different way, like breeding, fighting, etc…
  • Asset interest: some virtual assets produce some interest. For examples, on 0xUniverse planets produce resources for a specific period. That’s similar to a bond which produces interest

For players, there are 2 main advantages over non-blockchain game:

  • Their virtual assets are represented as ERC721 tokens, which mean they can be traded freely on the game creator marketplace or any other third-party marketplace like Opensea. Game creators can’t freeze anybody asset.
  • Players are free to choose another game mod re-using their ERC721 token. If game creators go in a direction that is not popular or decide to shut down their version of the game, the community can decide to go in another direction.

The way game creators make money is by charging money on transactions made on the primary market (they have a monopoly on this market), and also on transactions made on the secondary market. For the secondary market though, game creators don’t have a monopoly. Some players can decide to trade their assets on the native marketplace of the game, or they can use third-party marketplaces like Opensea. Game creators can only get transaction fees for transactions made on their own platform.

Online casino

Gambling Dapps allow players to bet their Ether to win even more Ether. The games that are offered are generally similar to what you would find in a traditional casino like dice games. The first gambling Dapp used to offer a single game, but recently new gambling Dapps started to offer several games, like in real casino.

The way these dapps make money is by charging a house fee, like for real casinos (i.e the odds of winning is not exactly 50%, but slightly less, so that on average the dapp smart contract makes money). Compared to DEX, there are less legal challenges involved, however there is definitely more competition since a gamblin Dapp is easier to make than a DEX.

In any case, gambling Dapps generate the majority of the transaction volume among all Dapps. So there is definitely a big audience for this.

Dapps built on top of other Dapps

Some successful Dapps are building an ecosystem around them. For example, on top of the Kittiesverse you can find a couple of communities projects build on top of Cryptokitties. Some of of them are game mod that bring some new gameplay, using the same same ERC721 token of the original Cryptokitties game. Similarly, a couple of new projects have popped up on top of MakerDao like CDPSaver.

The best ways to find ideas for this kind of Dapp is to use popular Dapps and ask yourselves what kind of problems you encounter and how to solve them.

Bonus 1: Dapp list

Dapp lists are websites that list Dapps, and add some statistics like Daily Active Users (DAU), average transaction volumes, etc… These stats are great to have an idea of the popularity of these Dapps. Dapps can be grouped by category (gambling, DEX, etc…), and can be sorted based on stats. And as a bonus, you can also see Dapps of other blockchains like Tron or EOS. A good way to estimate the relative popularity of these blockchains. There are many dapp list websites, but my favorite 2 are:

Bonus 1: Dapp Hackathons

A last place where you can find a lot of good Dapp ideas is Hackathon for Dapps. Hackathons are events where teams of developers develop innovative projects. Hackathons usually last a few days, and at the end projects are submitted to a jury that vote for the best ones. The best projects receive financial prizes, and can benefit from various the attention they receive. For e example, Cryptokitties started at a Hackathon in 2017.

Ethereum Hackathons are managed by an organization called Ethglobal. EthGlobal is the mother organization but each Hackathon has its own website. You can find the list of all Hackathons on the website of EthGlobal. From there you can find the individual hackathon websites like Ethcapetown. Then on each of these Hackathon websites you will need to do some research to find the list of submitted projects. For example. for Ethcaptown, I had to go to their medium blog, and in their latest article, I scrolled down until I found a link to all their projects. It takes some investigation work, but it’s really the best way to find some very innovative ideas that you won’t find on Dapp lists.

If you really like a project, you could could contact the team to have a quick discussion and maybe even join them. And of course, you can participate to a hackathon if you want to submit your own idea.

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