Why dApps are closed source, and how opening them up will drive 10x web3 adoption

15 years into this great blockchain experiment, and most enterprise builders in Web3 are still using Web2 business models. This makes total sense. Building software is hard. Finding VC to scale said software is harder. Especially when you need to show recurring revenue growth month-over-month.

So what happens. We all sell access to our blackbox APIs and UIs. Pay $49/mo, $.0002 per compute, whatever the going take rate is, and hope that our sales funnels convert to paid at a high enough percentage to find follow on capital.

But what does this leave us with.

A bunch of disjointed, fragmented, proprietary codebases no actual large enterprise will ever touch!

Every single enterprise dApp builder in Web3 is too small to be trusted with an API blackbox. The risk to enterprise is too large. What if this little SaaS company fails, what if their APIs go down.. cough cough Recur.

No shade only love intended for our closed source homies grinding it out the only way they know how.

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With that out of the way, let’s dive into how dApps are currently made, and why open sourcing the dApp layer will 10x the growth of Web3.

What is a “dApp”

Does slapping a “d” for “decentralized” in front of application really mean anything? What properties separate a Web3 dApp from a regular Web2 app?

The answer is “blockchain”! A web3 dApp interfaces with a public immutable database somehow, while a Web2 app does not.

• This can be as light footprint as a bit of data storage onchain

• All the way to dapplications that run entirely onchain

How dApps are built

For practical reasons (scalability and cost) dApps are usually built as offchain as possible. Interfacing with blockchains is slow and expensive, so there is a design incentive to use them as little as possible.

This leaves most dApps with a very Web2 like tech stack.

• dApps are likely run on cloud instances. GCP/AWS/Azure etc as these systems can scale efficiently and no one wants to run their own server farms anymore.

• dApps also likely use regular cloud databases like MongoDB Cloud Atlas to store and retrieve information in an easy low cost way.

• A myriad of other useful Web2 stacks are also critical to running web3 dapps including: user click flow tracking software (like Hotjar) secure key storage (like Hashicorp Vault) and too many other useful pieces of existing infra to list.

Except some places where Web3 specific infrastructure really excels:

• dApps likely don’t want to build their own RPC nodes to sync with the blockchain, so companies like Alchemy are super useful.

• Managing your users private keys is really scary so companies like Web3Auth exist to handle secure key storage and retrieval for web wallets.

• Storing all of your data in cloud bucket storage is a bit disingenuous for dApps claiming any degree of decentralization, so companies like Filebase exist to interface with IPFS distributed file storage on your behalf.

This leaves us with a fairly routine tech stack that can build and scale feasibly any kind of Web3 dApp.

The dApp SaaS model is broken

The business model for most dApps is to make a vig between the cost of running the underlying GCP/Alchemy et al infrastructure, + marketing and personnel costs, vs the amount they can capture from their users or investors. This is identical to Web2.

Blur runs a great business, Opensea runs a great business. Either through a token model or a 2.5% fee model, they pay for their infrastructure costs and provide great value.

But how is Starbucks going to build a real NFT solution.. whitelabel Nifty Gateway? Pay some other web3 SaaS startup $499/mo for their growth plan?

NO. To really scale they need to own the software IP. And the only way to own the IP is to have access to the source code. The Redhat + Linux style open source model is the only model that will scale Web3.

Why are dApps endlessly reinventing the wheel?

Everytime a web3 builder gets a new brilliant idea. Dog walking on the blockchain, some exotic enterprise specific RWA, etc.. they all need to start from the same place.

Get a basic cloud instance running, sync with the blockchain, deploy some smart contracts, help users make wallets, etc.

What if a disruptive team of Web3 enterprise SaaS veterans decided to open source their entire stack so people wouldn’t have to do all of this hard work over and over again from scratch?

Paste in a few API keys into an environment variable file and get a battle-tested open source dApp up and running in a few minutes. Totally free to start, in fact you earn rewards. Then over 2mm/yr in ARR upgrade to an Apache License by burning a few RAIR tokens.

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If you spend enough time on Web3 Github, you’ll see smart contracts and frontends galore, but never the nitty gritty of how these systems are built and scale behind-the-scenes.

Together we’re stronger

If you can run Docker, you can run our stack.

Fork our repository, earn token rewards for developing out the open source further.

The future of Web3 is open. The time is now to build scalable dApps for the next billion users.

Learn more about our open source standard way to build modern dApps @ rairprotocol.org

and please give us a follow on Twitter/X @rairprotocol