Corporate Finance, DeFi, Blockchain, Web3 News
Corporate Finance, DeFi, Blockchain News

Here Come The Ethereum DAPPS

A platform is defined by its use cases. If great apps appear, the platform is judged a success. If not, the platform disappears into the dustbin of computer history. So I went looking for the emerging DAPPS (decentralized apps) coming out of the Ethereum platform.

Bernard Lunn
Bernard Lunn
DAPPS look like normal apps. That is deliberate. Ethereum made the UI building part familiar to developers used to deploying to the cloud. Instead of deploying to AWS or another server farm, you deploy to Ethereum ie to a decentralized Blockchain. You can build the frontend in HTML or QML (QML is optimized for mobile, you can read the basics here (1)). This is Hackathon territory. You can build a DAPP in hours. So there will be lots of throaway DAPPS that never get launched. There will also be lots of DAPPS that get launched and disappear in obscurity. This is still really early days in the decentralization wave and the big winners have probably not yet even been conceived let alone launched.
Here are three that look promising at the end user level –, Augur and Vunk.

Internet Of Things, Sharing Economy, Blockchain. hits all three. If that sounds like a venture created by a random buzzword generator to woo investors, suspend disbelief for a moment because may be quite practical.

Slock means Smart Lock. If you use AirBnB as a host or a guest, you discover that the lock is the key. In a traditional hotel you have a receptionist to give a key to a guest after confirming payment. If you stay with an AirBnB host you need to coordinate arrival time so that the host is there to let you in. That is a pain point for both parties. I first wrote about this emerging need in September 2015 after using AirBnB (2).

On a more recent AirBnB visit, there was a lock controlled by some Samsung device that was unlocked by a number sent to me by my host via a text message. That was an improvement.

What if it was a smaller transaction, such as renting a bike or a washing machine? That is where is focused. Technically their code is deployed to a smart lock, using something like Rasberry Pi to build the smart lock. They don’t build the smart lock, they give the smart lock manufacturer the ability to run transactions, because the smart lock runs on the Ethereum Blockchain. reference washing machines and bikes as use cases. The latter use case resonates and I will use this in the example.

As the bike owner, you set the deposit price and the rental price. The DAPP keeps the deposit in Escrow until the renter returns the bike. As the bike renter, you pay the deposit and at the end of the rental period you get the deposit back minus the rental cost. The bike owner gets the rental money. All of this is done on the lock itself. It is a smart lock running a smart contract. There is no centralized service. That is radical.

I can envisage this as a type of decentralized version of the “Boris Bike” in London or a more controlled version of the free white bikes in Amsterdam. I would love to use it when I visit cities.


Augur is a DAPP we have already reviewed back in May 2015. It is a decentralized prediction market. Prediction markets are nothing new. Nor are betting sites, which are simply a way to monetize a prediction. I predict that Harry The Horse will win the 3.45 at Cheltenham and if I am right I get a reward. Or I can take a long shot bet on Bernie Sanders being the next President of America. Or that Lending Club will be worth a lot more or less than the $6.8bn it is worth today. Augur will reward you for getting the prediction right.

“Why do prediction markets need a decentralized blockchain?”

You could build a crowdsourced prediction market using your favorite programming language and bung it onto AWS.

Augur’s answer to that question is that centralized prediction markets suffer from two problems:

- They can be shut down. That can happen for all kinds of reason - regulation, bankruptcy, fraud.

- Somebody has to report on what happened that triggers the payout. In many markets that is pretty obvious. I can see whether Harry The Horse won the 3.45 at Cheltenham and it will be front-page news everywhere if Bernie Sanders becomes President and it is easy to track the price of Lending Club. In the long tail you cannot rely on institutions to report. The chance of the one expert trusted to report on the event being subject to fraud or mistakes is high. So you need a trustless decentralized network to do the reporting. The beauty of a decentralized prediction market is that it can cover so many more markets and events – as long as there are enough people reporting on that event to be statistically significant.

Augur enables the long tail of prediction markets.


FreeMyVunk enables you to trade your “virtual junk” that you accumulate while playing video games. Not being a video gamer, I tested the idea on a teenage gamer and from that sample of one got a big thumbs up. To quote them:

Anyone who has ever played a video game has thought to themselves, "Wouldn't it be nice if I could trade my World of Warcraft DoomHammer which I don’t use anymore for my friend's Galil in Call of Duty: Black Ops!”

This illustrates the power of Blockchain to power almost anything. It can be the decentralized value exchange. Fiat currencies is the obvious mainstream example, but this also applies to AltCoins and Loyalty Points. The beauty of FreeMyVunk is that it starts in a market that young early adopters can relate to.


There are many reasons why I have been an Ethereum fan since I spotted it during the summer of 2014. It scores reasonably well on the 8 criteria that Daily Fintech Advisers suggests using to evaluate Blockchain platforms:

- Adequate Funding: Platforms need enough funding to be properly developed and supported.

- Source of Funding: The motivation of the investors matters to developers in the long term, as it can force the platform in a direction that may not be in the interests of application developers. When selling trustless systems, the motivations of investors comes under the spotlight. The traditional VC model has been augmented by Currency Issues of some kind or another and these also raise motivation concerns.

- Commercial model: Most of these platforms are open source. Some are aiming at a Red Hat type model. Others want to make money from a currency that they control. Others want a piece of the application pie. Developers need to understand the commercial model and decide if they are comfortable with it.

- Trust model: Who do you need to trust? Some such as Ripple and Stellar require trust in a currency controlled by an institution.

- Ease of development: This can be a personal decision i.e different developers find different things easy or hard. Developers look for something that uses a choice of familiar languages and that abstracts the complexity of a decentralized network. Today we are in the experimentation phase where application developers are building their MVP and through this they are learning what is genuinely easy to use.

- Performance & Reliability: It is too early to tell. One hears theoretical arguments for different platforms, but we will have to wait until it is possible to have third party testing of apps on different platforms.

- Bitcoin, Alt or None: This is a heated debate at the moment. Many people think that Blockchain platforms shoulduse Bitcoin and that is why many people back Counterparty and Blockstream. The shouldargument is irrelevant to most application developers, who just want to know whether their app needs Bitcoin or an Alt based currency or no currency.

- Layer in stack: Some people critique Ethereum for attempting too much. In this view it is better to offer less functionality at a lower level in the stack. Maidsafe and ERIS position in this way. This appeals to developers who value control (perhaps over speed to market).

Ethereum clearly has developer interest. Their recent DevCon in London had 400 in physical attendance and 15,000 watching the livestream.

However none of this matters unless we see real and useful apps. The proof of the pudding is in the eating, not in the ingredients or the instructions. That is why these 3 DAPPS matter and why I expect to see many more coming down the innovation pipeline.

The three that I reviewed are at the top of the stack. They are end user apps. You and I can envisage using them. There are others that sit in the middle of the stack. The end user of these apps are more likely to be developers who build them into end user facing apps. This could be called middleware but it nothing like the middleware that we think of in traditional centralized technology. The ones that look interesting are:

Two Digital Identity on the Blockchain startups that we looked at in May 2015 – OneName and ShoCard.

MakerDAO. Their Dai Credit is a cryptobond that pays interest based on collateral which maybe something like Ether. This will be open source and so will be evaluated by any developer looking at Ethereum as an open source platform.

In the world of enterprise Blockchain, banks are building Proof of Concept apps using Permissioned Blockchains. These consumer apps go a stage further. They are Minimum Viable Products (MVP) released into the wild on a Permissionless Blockchain. The POC developer may get an internal audience of a few hundred people. The MVP developer could get to Product Market Fit (PMF) and be seen by millions. We will have to wait and see which ones get to PMF, but conceptually they seem sound.


Bernard Lunn
Founding Partner, Daily Fintech Advisers

Bernard Lunn is a serial entrepreneur, senior executive, adviser and a strategic dealmaker. He worked in Fintech before it was called that with startups, growth stage and turnaround ventures (incl. Misys, Temenos, IMS, ITRS). He has lived and worked in America, India, UK & Switzerland and is adept at cross border deals.

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Jeudi 14 Janvier 2016