The Ultimate Guide on How to Monetize With Your dApp

Posted by James Smith on September 27th, 2022

In blockchain, decentralization refers to the transfer of control and decision making from a centralized entity (individual, organization, or a group) to a distributed network. It is crucial to businesses, how, if you ask? Here’s your answer. 

Why is Decentralization Important to Businesses?

When you are building a digital product or service for your business, there are three primary network architectures you will have to consider: centralized, distributed and decentralized. While blockchain technologies are often based on decentralized networks, blockchain app development itself cannot be categorized as a decentralized application. Therefore, dApps (decentralized apps) are developed as the solution that gives businesses the ability to manage their own digital assets and data.

What are Decentralized Applications (dApps)?

Decentralized applications are software that interact with the blockchain in DeFi (Decentralized Finance) keeping track of the state of all network participants. dApps have the same interface as any other website or mobile application today however their core functionality is represented by smart contracts.

dApps will often need the user’s token to allow them access to features like games, trading, stake,earn interest etc. which helps businesses with engagement. This is probably why a decentralized app is equitable to every business scale and is one of the most practiced blockchain trends in the industry vertical.

Now, If you have already started working on your decentralized mobile app development, all you need to know is “how to make money with dapps”. This article introduces you with the best dApps to make money, various aspects of monetizing  models for your dApps and tells you how to make money with dApps. So make sure you stay till the end.\

Before we hop on to money making strategies with dApps, you might also want to explore the following development cost;

  • How to determine Blockchain app development cost
  • How much does it cost to develop a crypto wallet app
  • What is the development cost of a crypto currency exchange app and; 
  • How do free apps make money

Now that you have an idea of various blockchain application development services costs, let’s begin:

dApps do not follow the standard monetization strategies for regular business apps, instead they rely on token launch activities, initial coin offerings, donations and transaction fees for money making strategies. 

There are already major dApps with massive user bases such as Empire, Augur, Basic Attention Token, Compound etc, that carry multiple sources of revenue for a viable business model. What are these sources of revenue? Let’s take a look;

How Do Decentralized Apps Make Money?

The answer to how to make money with dApp takes startups and enterprises through many routes. Following are the unique revenue earning models for businesses with dApps:

  1. Crowdsale and token launch

The foremost dApp business and revenue model to consider is to bootstrap a project through crowdsale and back it with an asset token.

If you plan on taking this route, you will have to keep following things into consideration:

  • The core functionality of your decentralized app
  • Provided access to the network
  • Distributed profit to the token holders
  1. Transaction fees

Another answer to can you make money with dApps is that the transaction fees model, you will find in all the dApps monetization guides. Charging users for availing your service can be one of the most profitable ways to make money by developing dapps.

This is one of the most popular ways if you are looking to make money with ethereum dApp. This is how it works;

  • A purchases something from B on your platform
  • X% of the amount goes to you – the service provider
  • 100 – X% then goes to B

The caveat here is to know what percent of transaction fees to set. If you allot a high amount, someone will eventually copy your smart contract and offer their own version with a less to zero transaction fees.

  1. Premium

Taking cues from the traditional, non-decentralized gaming apps, you can add the monetization functionality in your app to answer the investors’ persistent question on how to make money with dapps.

If yours is a gaming app too, you can add the model and offer players a chance to up their game without working on the levels by buying the premium functionality using digital currency to successfully utilize dApps games to make money

  1. Subscription

You can easily add a membership or subscription element in the contract to ensure that the function has only been called upon by subscribers or the premium members.

The time frame of this subscription can be:

  • Usage-based – The users would only be allowed to call function X times
  • Time-based – Users would be allowed to call in a function till X time passes
  1. Advertisements

While still a very new/ less used blockchain business and monetization model, advertisements do in fact find a place in the answer to how decentralized app development makes money.

So, you should think about adding it to your list of dApp monetization strategies.

You can also check out: how to use your business app as a brand marketing channel

  1. Donations

If your dApp project is out to solve some world issue or to function around some social cause, you can put a donate button on your application or website or can even pass its link around to social entrepreneurs to donate.

  1. Create digital goods

One of the biggest examples of how Ethereum apps make money using this monetization model can be seen in CryptoKitties.  

What CryptoKitties did is that they developed generation 0 kitties and gave them to the platform users to keep as a collectible. By making the kitties functional and unique and viral trending, they were able to attract users to put their money in the digital good.

  1. Referral marketing

Referral marketing that has proven to be behind e-commerce apps’ success can also be taken into consideration to make money with Ethereum based decentralized applications. In fact, there are a number of Blockchain powered platforms on the internet today that give you a link to their websites to promote. And depending on the clicks or traffic you are able to send their way, you get paid by them.

So, these were the eight effective decentralized apps business models and strategies you can look ahead to enjoy maximum revenue from your dApp development.

Read more about what are dapps

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James Smith

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James Smith
Joined: July 15th, 2022
Articles Posted: 16

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