A decentralized app store might lead crypto toward more centralization

The estimated windfall Apple got from its App Store in 2020 is $67 billion. That’s up from $50 billion in 2019, a 28% increase. Even as the company has lowered its commissions for smaller developers, the App Store remains a major component of Apple’s bottom-line profits. And it’s not just Apple taking a cut of developer revenue: On Android, the world’s most popular mobile operating system, the Google Play Store netted $38.6 billion in 2020.

That’s over $105 billion in revenue from the top two app stores combined. It’s no wonder that regulators in many countries are closely considering whether there is sufficient competition in the marketplace. So it should come as no surprise that Coinbase, America’s most visible and well-known crypto exchange, also wants to be the on-ramp to the decentralized application economy.

But what do we sacrifice when we replace one gatekeeper for another? Does it jeopardize the decentralized ethos and accessibility for all that’s sacred to many crypto believers? These are important questions worthy of discussion as we build on our momentum and push further into the mainstream.

Related: Decentralization vs. centralization: Where does the future lie? Experts answer

The 80/20 rule

Vilfredo Pareto had it right with his 80/20 rule: 80% of revenues comes from 20% of customers. However, in the case of Apple’s App Store, it’s more like the 95/2 rule: 95% of revenue comes from the top 2% of apps.

Let’s assume that a decentralized application (DApp) store would reflect a similar reality, where the most successful apps generate the most revenue. That means any DApp store that managed to secure the most popular apps would have a huge advantage. The most well-funded platforms would spend lavishly to gain exclusivity and secure gatekeeper status. Then, anyone that wanted to access the top apps would need to go through that gatekeeper.

The monopolistic elements of any app store are what make the economics so lucrative. If you own the…

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