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Top 5 profitable blockchain dapp ideas you can build.

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In this article , I'm going to share five profitable blockchain application ideas that you can build, whether you're trying to launch your own project, or maybe you're just trying to find some ideas for portfolios that you can land a high paying job become a freelancer,

Aave

So fit number one is a savings and lending app. So this is an application that allows users to deposit cryptocurrency inside the application and earn interest for depositing it, okay. And then on the other side, users can take out loans against their cryptocurrency and pay interest for doing that. So this works a lot like a bank. And there are plenty of examples of this out in the wild already. So Aave is a prominent example. This is a money market application powered completely by the blockchain, but the back end is decentralised. It runs on top of the etherium network. And then also compound finance is a another example of an application that does all lending as well. So these are both great projects to take inspiration from when you're building something like this protocols.

So how do they actually make money?

Well, essentially, it's on the spread. So let me explain what I mean by that. Again, these applications are working a lot like a bank, where people can deposit money inside of them, and they can earn, interest for doing that. 3% interest on dai stable cryptocurrencies prices change, and then someone else can turn around and borrowed dai for 4.1%. So you see, it's roughly 1% difference, and then that's the profit. And so if you were to create an application like aave, that's how you would make money with it. And the coolest thing is, it's done in a completely automated way. So whenever you create this application, it just earns the money for you. You don't have to do any other work in the background. Other than, of course, you know, maintaining the application. So if you're going to build an application like this, you know, what do you need? Well, first of all, you need smart contracts. So these applications run on top of the etherium platform. They're powered by smart contracts written in the solidity programming language. So you need smart contracts to facilitate the savings and lending part. But you also need some sort of client side website. So you need a user interface, like Aave or compound has. So you could do this in a modern JavaScript framework, like react js, for example. And you of course, want to make the application talk to the blockchain. So you want to use some sort of library like web three j.s to talk to the blockchain. And of course, you can go find any tutorials on YouTube channel to learn those skills.

Yeild farming app

So app idea number two is a yield farming app. So you know, farming is a really hot trend in blockchain right now, particularly in the defy space, decentralised finance. So these are applications where you reward users for depositing cryptocurrency into the application with a brand new cryptocurrency. So that's different from the use case that I talked about a second ago. So if you're using Aave, then of course, you if you put in dai, and you're earning 5% interest, then you're earning more dai. So you're farming is different, where basically, you put in a cryptocurrency, like dai, for example, and you get a brand new cryptocurrency issued by that specific application. So some really popular examples of this are like the sushi swap project, where basically you deposit funds into this application. And it gives you a brand new token, in this case, the sushi token.

Now, the cool thing about this yield farming application is that it's really popular to fork other applications and defi. And that's one way you can get started really fast. Now, at the end of the day, if you're gonna launch your own real world project, if you're gonna fork I highly recommend adds adding some sort of value on top of that. But if you're just getting started and you want to try to learn, then forking might be a really good way to do that. Because then you get exposed to advanced code, and you can up your skills that way. So for that reason, forking can be really valuable.

So how does this application make money?

Well, essentially, whenever people deposit cryptocurrency in the application, you know, they are issued a brand new token for doing this. So again, let's say that you're using sushi swap, and you deposit dai into it and additional cryptocurrency, then you're rewarded with new sushi token and new sushi tokens are created in this process. So whenever that happens, the developers of the applications themselves can get a cut of those new tokens that are created, and then go straight to the developers. And that essentially, is a passive income reward that they get for creating the application. And so if you want to create your own project like this, you can of course, you know, fork an application like sushi, see how that mechanism works, and change it for yourself and customise it to create your own app.

So if you're gonna do that, what do you need?

Well, you need basically the same things as we had in the first example. You need smart contracts on the blockchain that facilitate the token for the new cryptocurrency that you're going to create. All right, I recommend using ERC 20 token so you can issue a new cryptocurrency pretty easily that way. And then also the smart contracts to govern the yield farming part. And then also a user interface written in some sort of modern JavaScript framework like react j. s, and of course, web three j. s, maybe ether, j. s to talk to the blockchain.

Yield farming smartcontract

So app idea number three is to create your own yield farming smart contracts that will actually multiply the yield that you can get whenever you do yield farming. So before I tell you about this, note that this is risky, but it's one of the coolest examples because you know, it's really easy to start making money with it right now. And it probably has the lowest barrier to entry out of any of these applications, because you don't actually have to get into users to use your application, you can just create it, and it will start earning money for you. Okay, there are risks involved. We'll talk about that in a second. But first, let me explain how it works. If you look one of these applications, like compound finance, for example, it also does yield farming. So basically, you can deposit dai and then earn dai. But compound will also give you a brand new token, the comp token as a reward and an incentive for doing this. So in addition to this three point, whatever percent you're getting on your dai, you'll also get some additional percentage interest with this brand new comp token on top of that.

But what's really cool about compound is it's a protocol. It has smart contracts live on the blockchain. And as long as you know how to use those smart contracts, you don't even have to talk to the application through the user interface here. You can interact directly with compound finances smart contracts to do the yield farming yourself, which opens up the possibility of using leverage for you farming. So basically, what you can do is deposit dai and then turn around and borrow dye again. And whenever you do this, you'll get rewarded with comp tokens for supplying and also borrowing. And what's even cooler is you can use flash loans to maximise the leverage in this case and earn even more comp tokens.

So if you're gonna create something like this, what do you need?

Well, the cool thing about this is you need very little Alright, so you need a little bit of cryptocurrency to get started to deposit. But as far as the coding goes, all you need is a web browser and some basic coding knowledge because you can do everything inside of remix.so remix etherium.Org is a fully fledged solidity ID meaning that you can create smart contracts inside of here at the solidity programming language, you should be able to talk to the compound finance smart contracts due to the deposits and also withdraws if you're gonna add flash loans. And of course, you need to hook into a flash loan provider to do that as well. And now quick caveat. Again, there are risks associated with this. Because if you try to borrow too much money against what you have deposited, you can get liquidated. So definitely don't use too much leverage. And again, there's always risk when you're depositing money into smart contracts. So definitely don't use any more money inside something like this and you can afford to lose.

Trading bot

So app ID number four is a cryptocurrency trading bot. The trading bot that I'm talking about is not one that tries to predict the future price of cryptocurrencies, it looks for opportunities that exist right now in the blockchain. So basically, you know, cryptocurrency prices that are different on different decentralised exchanges. So let's say you know, cryptocurrency costs $100 on one exchange, and $101 on different exchanges, well, then basically, you can take advantage, this opportunity, it's called arbitrage. And the cool thing is, you don't even have to own the cryptocurrency in order to take advantage of these opportunities, you can do it with zero money down with something called flash loans. So this is basically where you can borrow, you know, millions of dollars or cryptocurrency with zero money down to use for trading as long as you pay it back in the same transactions. So basically, you would write a smart contract that takes out the flash loan, it executes this trade, and then pays the flash loan back all in the same transaction.

So if you're gonna do that, there are a few things that you need.

The first is you need, of course, in smart contracts to do this. So you could write some smart contracts in the solidity programming language, just directly inside your web browser with remix or something like that, right? Maybe you write it inside of a text editor, then pop it into remix to deploy it. And then ideally, you want something that watches the blockchain watches different decentralised exchanges, and detects these price differences, and then triggers your smart contract to execute this flash loans and you know, do these trades. Now the real cool thing about flash loans is that you can't lose any of this money either. So let's say you wanted to borrow a really large sum of money, like a million dollars. If the trade goes south and doesn't actually work. Well, it'll fail on the blockchain. And that's why you can't lose the money. There's no, there's no risk involved. And also, you know, just a few quick caveats here. Just because you could borrow a million dollars with flash loans doesn't mean you have to like sometimes these trades are much smaller, you don't have to use the full million dollars, maybe you just have to borrow a few $1,000. And of course, it doesn't necessarily mean that you're walking away with $1,000 on a single trade. You might just need it to execute the trade, and then you make a small profit on top of that. So you know, you could do this in one giant trade or Hey, maybe you could do a bunch of small trades over time. And bots gonna do it's going to watch those opportunities and fire on them. Now the real key here is you want a bot that's really fast and gets these opportunities for other people. Or you just look for other opportunities that other people aren't watching for. That's how you be competitive and flash loan. That's how you take advantage of these opportunities and actually make profit. And that's exactly how the trading bot works that I did in my recent trading bot masterclass. But if you want to just a brief introduction on to you know how a price discovery application might work.

Cryptocurrency exchange

So app ID number five is a cryptocurrency exchange, and specifically, I mean a decentralised cryptocurrency exchange that's native to the blockchain. So this would be an exchange, it's powered by smart contracts. So all the trading happens natively on the blockchain with other cryptocurrencies that live on top of the blockchain. So a good example of this would be uni swap. So this is one of most popular decentralised applications on the etherium network. This is a more modern decentralised cryptocurrency exchange where basically you have one cryptocurrency, let's say ether, and you just tell it, I want to swap it for a different cryptocurrency, like, let's just say, just pick one year. So that's how it works. You just say I have eth, I want as you enter the amount you hit swap, and the trade happens totally on the blockchain. So uniswap is powered by really modern technology called the automated market maker, which has these liquidity pools right on the back end, where basically, users are parking their cryptocurrencies inside of there to facilitate these trades. And they're earning a passive income reward for doing this. And so those trading fees are going to the users, but you could add on some profitability for you as a developer for doing this by coding and maybe some sort of trading fees or doing a yield farming like I talked about earlier. So another idea for making money with a cryptocurrency exchange is to build one that has like an order book and a candlestick chart where people actually deposit funds into the smart contract in order to make the trades. So that's one where you can get a cut of the trading fees directly.

So those are five profitable blockchain application ideas that you can build with the exact skills.

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