DeFi, dApps and DAOs: The Key Differences

Although D-apps, DAOs, and De-Fi are different from one another, there’s something that is at the heart of all three- smart contracts.

dApps On the technical front, D-apps are similar to smart contracts in structure, but there are two key differences. First, they have an infinite number of participants on all fronts. Second, they are not necessarily financial. Although digital assets are involved in transactions that occur within the application, they are not the primary objective... See more

4. DAOs are trust-less organizations owned and governed by community members. DAOs have smart contracts for decentralization and humans on the periphery for governance.

6. De-Fi and D-apps differ on two major fronts. First, De-Fi projects are necessarily financial in nature while D-apps are not. Second, D-apps lack a comprehensive governance structure, that is an active component in De-Fi.

Smart contracts are pieces of code that have in them a set of criteria for a transaction to take place, and when these criteria are met, the transaction goes through without any human intervention. A smart contract has two major components, digital assets, and two or more participants.

2. Smart contracts are an important building block for DAOs, De-Fi, and D-apps.

8. DAOs and De-Fi are different in terms of their objectives and fundamentals. De-Fi organizations pursue financial objectives while DAOs aren’t necessarily financial in nature. De-Fi organizations integrate DAOs into their structure to manage communities.

5. De-Fi is an emerging financial technology that uses distributed ledgers to remove middlemen from financial transactions. They are a combination of smart contracts and DAOs.

3. D-apps are a nexus of smart contracts backed by nodes across the spectrum. The difference between smart contracts and D-apps is that D-apps are open-ended on all fronts.