Explain the ‘Flywheel Effect’ in a DApp Ecosystem.
The flywheel effect describes a self-reinforcing loop where success in one area drives success in another, creating exponential growth. In DApps, this means more users attract more developers, who build better DApps.
These better DApps attract even more users and capital (TVL). This continuous loop increases utility, network security, and asset value, accelerating the overall network effect.
Glossar
Dapp
Architecture ⎊ A decentralized application (Dapp) within cryptocurrency, options trading, and financial derivatives represents a software construct operating on a blockchain, fundamentally diverging from traditional client-server models.
Flywheel Effect
Momentum ⎊ Initial success attracts more users and capital, which further improves the service.