How to make money with dApps? An Ultimate Guide

The market for decentralized applications (dApps) continues to grow even as crypto prices slide downwards in 2022. 

A Q1 2022 report from DappRadar revealed the number of dApp users jumped 396% year-over-year up to 2.4 million. Gaming dApps, which made up more than half of all Q1 2022 user activity, remain popular as users enjoy interacting and competing with others while earning along the way. 

 

decentralized applications
decentralized applications

DeFi cryptocurrencies also continue to be in demand as they also open up opportunities for passive income generation.

How to Earn Money Through Your dApp?

Unsurprisingly, the popularity of dApps has led many entrepreneurs, innovators, and crypto enthusiasts to shift their thinking from ‘why do we need dApps’, to trying to figure out how they can develop blockchain apps and make money with dApps. 

Overall, the Ethereum blockchain remains one of the most popular architectures for dApp development.

Before understanding how dApps make money and how innovators within the space profit, it is vital to have a grasp on the differences between traditional apps and dApps when it comes to revenue generation. 

How Do Decentralized Apps Make Money?
Crowdsale and Token Launch

A tried and true revenue generation method is to develop a project idea and then raise capital through a crowdsale that is backed by a token.

Developers and project leaders looking to embark on the crowdsale route need to be prudent with dApp development and be clear to potential users about its functionality, advantages, and unique attributes. Development teams also need to be transparent about token distribution and cultivate a loyal following as much as they can. 

Transaction Fees

Some dApp developers make money through transaction fees, which can be particularly lucrative if the application is popular and heavily used. For example, if a dApp has a 10% transaction fee, that means 10% of every transaction amount will go to the platform service provider.

While transaction fees can be an easy way to make money, dApp developers need to be careful about transaction fees. If fees are too high, users might be swayed away from the platform. Even worse, too-high transaction fees could lead some to build their own version of a dApp with fewer transaction fees and then persuade users to migrate over. 

Premium

Some choose to add the opportunity for premium functionality to a dApp at a particular cost. For example, a gaming dApp could entice users to pay for boosts, special equipment, or level advancements for a fee in digital currency. 

Subscription

Subscriptions are very popular in the traditional world but do have a place within DeFi. Some dApp developers choose to offer special premium access or functionality that can be accessed by subscription. The subscription-based model is desirable as creators have ‘guaranteed’ income as subscribers sign up and renew. Subscriptions can either be usage based, where a certain feature or attribute has a limited number of uses, or time-based, where users could turn to an enhancement for a particular set duration. Developers need to be wise and carefully consider which subscription model would work best.

Advertisements

Advertisements are still somewhat of a novel concept within the blockchain world as a tool for monetization. However, they can be effective ways for dApp developers to make money. 

Donations

Soliciting donations might not work for every platform, but can be a particularly useful strategy for dApp projects that intend to tackle a social cause or issue of concern. Some developers place a ‘donate’ button within the dApp itself, on the project website, and on applicable social media platforms to raise awareness. 

Create Digital Goods

The creation of digital goods like NFTs is another useful strategy for dApp monetization. For example, the developers of the popular CryptoKitties platform originally gave Generation 0 NFT kitties for users to keep as a collectible item.

As the cute NFTs became more popular, additional users flowed into the CryptoKitties platform who were ready to buy, sell, trade, and ultimately help expand the entire ecosystem. 

This list includes effective ways to help developers make money off of dApp development.

It’s always prudent for developers to study their target markets and conduct smart research to decide what strategies might work based on revenue generation goals and user interests.

Referral Marketing

Referral marketing has made big waves within traditional e-commcerce, but has also made an impact within the dApp world.

Several platforms allow users to promote a particular website and then get paid based on referred traffic. Since the crypto world is one where the community can make-or-break a project, effective referral marketing endeavors can lead to massive financial returns. 

Conclusion

Prospective dApp developers have a wide variety of strategies to choose from to generate revenue and attention. The list above features tried-and-true methodologies that successful dApp projects have relied on.

Those interested in learning more about successful DeFi projects should study lists of top popular dApps to learn more about what type of concepts attract users.

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Kevin OBrien
Written by Kevin O'Brien verified symbol Web3 & DeFi Writer
16 Articles

Kevin is a native Texan focusing on DeFi, Web3 & NFT content. He’s written for Bitcoinist, CCN, CryptoGlobe and for a wide range of crypto projects. Kevin also enjoys collecting historical autographs and learning traditional musical instruments. Read more at texandefiwriter .com.

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Reviewed and Fact Checked by Eugene Abungana , Investment Analyst, Financial Analyst, and Institutional Trader