Building Web3 dApps: Start with the Right Blockchain

Imagine the internet as a global city. The applications we use are buildings and the blockchain is the land they’re built on. Just as you’d pick the right land to build a skyscraper or a park, the choice of the blockchain significantly influences the success of a Web3 application.

Web3 is the newest face of the internet, offering a decentralized system where users interact with each other directly, removing the need for intermediaries. Despite the exciting promise of enhanced security, privacy, and ownership, Web3 applications can face hurdles in terms of scalability and user experience.

At Denarii Labs, we’ve observed a common pitfall among projects: overlooking the importance of selecting the right blockchain. In our experience, project teams tend to pick a blockchain at the outset, without fully considering the project’s specific needs. We believe this is a flawed approach.

Why Does the Choice of Blockchain Matter?

Choosing the right blockchain can make or break your project, particularly for decentralized applications (dApps) targeting specific industries. Even for launching a simple token, the choice of blockchain is critical.

Here’s why, in a nutshell:

ApeCoin, a token, was launched on the Ethereum blockchain. This choice allowed the project to leverage Ethereum’s security, smart contract capabilities, interoperability, and its already-established community of Bored Ape NFT holders.
PancakeSwap, a decentralized exchange, opted for the Binance Smart Chain (BSC). The integration with Binance exchange facilitated smooth asset transfers between the exchange and the network, ensuring quick, low-cost transactions — vital for PancakeSwap’s business model.
dYdX, a decentralized trading platform, started on Ethereum but later shifted to a layer 2 solution, StarkEx, due to high transaction fees on Ethereum. However, the move meant increased centralization. To balance scalability and decentralization, dYdX decided to host its next release on a dedicated blockchain built on the Cosmos SDK.
These examples show how a project’s unique needs influence the selection of a blockchain platform. A wrong choice could result in limitations, low scalability, and adoption issues.

How to Select the Right Blockchain

Selecting the right blockchain involves a strategic evaluation based on the project’s needs and goals. Here are a few key considerations:

• Security: This is non-negotiable. A secure blockchain can resist threats and maintain the integrity of the project. You need to consider the blockchain’s consensus mechanism, encryption methods, and adoption rate, among other things.
• Scalability: Can the blockchain handle a large number of transactions without compromising speed or cost? Each blockchain has its scalability limits and trade-offs.
• Interoperability: This is the blockchain’s ability to communicate and cooperate with other blockchains and systems. Not all blockchains are equally interoperable.
• Development Ecosystem: A vibrant ecosystem of developers, users, and stakeholders can offer immense support to your project.
• Standards: Standards like ERC-20 for fungible tokens and ERC-721 for non-fungible tokens on Ethereum are popular due to their wide adoption, interoperability, ease of creation, security, and flexibility. However, your project’s specific needs may be better met by other standards on different blockchains.
• Airdrops for Existing Community: If you’re planning to airdrop tokens to existing communities, consider hosting the token on the same blockchain where the community already holds digital assets.
• DAO Governance and Tools: If your project is a decentralized autonomous organization (DAO), ensure that the chosen DAO management tools support your selected blockchain.
• Exchange Ecosystem: Exchanges are vital for token trading. Different blockchains offer varying levels of exchange options and performance.
• Adoption: The wider the blockchain’s usage and recognition, the higher the chances of your project’s success.
  The Future of Web3

The possibilities of Web3 are boundless, transforming the way we interact with digital content, social media, and autonomous organizations. As we continue to innovate in Web3, it’s crucial to meticulously evaluate each design choice, starting with the fundamental decision — the choice of the blockchain. At Denarii Labs, our mission is to guide our customers to make informed choices and navigate the complex Web3 landscape confidently.