Original: Flipside
Compiled by: Yuliya, PANews
As the Web3 ecosystem has grown rapidly, 2024 has become a milestone year for blockchain user growth. Major blockchain networks have set new records in terms of both new user acquisition and the scale of super users, with emerging public chains like Base redefining the possibilities of user growth, while Ethereum and its Layer 2 networks have demonstrated the adaptability of mature ecosystems to evolving user needs.
However, in-depth analysis of on-chain data reveals significant differences in the quality of user growth. This phenomenon highlights that in evaluating on-chain activity, not only should quantitative metrics be focused on, but the quality dimension of user engagement should also be emphasized. Based on Flipside's 2024 real-time on-chain cryptocurrency user data, this report combines traditional performance indicators and multi-dimensional operability indicators to comprehensively assess the annual state of the cryptocurrency ecosystem, providing a new analytical framework for evaluating the health of on-chain users in 2025.
TL;DR
Beneath the record-breaking user growth lies a deeper challenge: how to build ecosystems that create meaningful, sustained engagement, rather than fleeting speculative behavior. In short, most blockchains are still in the early stages of converting ordinary users into high-value contributors.
New User Acquisition:
- Base set a record of 19.4 million new users in October 2024, with Base contributing 13.7 million, nearly 8 times that of the second-place Polygon.
- Despite Bitcoin price breaking the $100,000 milestone to a new all-time high, its monthly average new users was only 935,900, indicating that speculative activity among existing users was more prevalent than significant new user influx.
- Ethereum added an average of 1.56 million new users per month, outpacing Arbitrum and Optimism, with a 33.4% month-over-month growth in March. Notably, Arbitrum reached a peak of 3.3 million new users in a single month in May.
Super User Performance:
- Base attracted 15.1 million wallets that executed 100+ DeFi transactions, 38.4% more than Ethereum's 10.7 million super users.
- Ethereum's 10.9 million DeFi-related super users exceeded the combined total of Arbitrum and Optimism (6.2 million and 1.8 million respectively), highlighting Ethereum's advantages in liquidity and convenience.
- Polygon added 1.5 million new super users in 2024, recording 867.7 million super user transactions for the year, underscoring its success in non-DeFi use cases.
DEX Usage:
- Uniswap expanded its dominance on major public chains, accounting for 91.3% of new user DEX activity on Base and growing its market share on Ethereum by 27.72% compared to 2023.
- Despite Uniswap's continuous expansion, Trader Joe maintained its leading position on Avalanche, with a 61.1% market share, up 6.1% from 2023.
- Unlike 2023, the top 3 DEXs by new users and super users are now consistent across the observed chains.
New User Acquisition
In October 2024, new user acquisition reached a monthly high of 19.4 million for the year.
This year's on-chain user growth was primarily led by Base, which contributed 13.7 million new users in the month - nearly 8 times that of second-place Polygon. Overall, this has been an impressively strong year for on-chain user growth, with a continuous upward trend throughout 2024, only experiencing a slight pullback in August.
*Note: "New users" here are defined as users who have made at least 2 transactions on a chain, with the second transaction occurring in 2024.
This sustained growth may have been influenced by the increased institutional adoption of cryptocurrencies, as evidenced by the series of BTC and ETH ETF announcements earlier this year.
Other exciting developments in the first half of 2024, such as Grayscale adding several new cryptocurrencies to its "consideration set" and the Federal Open Market Committee (FOMC) meeting in September 2024 where the Federal Reserve cut US interest rates by 50 basis points - the first rate cut in four years - may have also contributed to this optimistic sentiment.
Base's Performance
Base started the year slowly, but its monthly new user growth has exploded 56-fold since January.
Base had only 244,700 new users in January, but has experienced steady and significant growth throughout the year.
By November, the chain's monthly new user count had grown 56-fold compared to January, averaging 4.7 million new users per month in 2024.
The chain has greatly benefited from Coinbase's large user base, which collectively holds around $130 billion in assets.
Popular DeFi protocols like Aerodrome may have also attracted users from other EVM chains, while Base has successfully generated buzz in hot areas like meme coin trading and on-chain AI through new initiatives like Based Agents.
Bitcoin's Performance
Despite Bitcoin price reaching new all-time highs, it has not attracted a significant influx of new users this year.
In 2024, Bitcoin's new user acquisition has remained relatively stable, despite the substantial appreciation in BTC value. Overall, Bitcoin averaged 935,900 new users per month this year, ranking third-to-last among the seven legacy chains observed in this report.
This suggests that the rise in Bitcoin's price has been primarily driven by the enthusiasm and speculative activity of its existing user base, rather than effectively attracting new users.
The major BTC price surge in March 2024 coincided with a 19.2% month-over-month increase in new users, but in November - when BTC reached the long-awaited $100,000 milestone amid continued price appreciation - new user acquisition actually declined 28.5% month-over-month.
Ethereum and Layer 2 Performance
Ethereum's new user growth has generally outpaced its legacy Layer 2s, but Arbitrum also saw an impressive single-month spike.
In 2024, Ethereum's growth exceeded its two major L2 chains, averaging 1.56 million new users per month, compared to 1.2 million for Arbitrum and 348,800 for Optimism. Excluding December, Ethereum only saw four months of month-over-month declines, reaching a peak of 1.9 million new users in March - a 33.4% increase.
Arbitrum and Optimism both started the year with considerable momentum, reaching their 2024 new user growth peaks in April and May respectively, before tapering off for the rest of the year.
Notably, Arbitrum's 3.3 million new users in May exceeded Ethereum's highest single-month peak in 2024. In this context, Arbitrum's new user growth has consistently outpaced Optimism throughout the year, benefiting from the success of its Arbitrum One initiative and the expansion into GameFi and SocialFi integrations. With 169 builder grants approved in the first half of 2024 and many behind-the-scenes developments, it remains to be seen whether the chain can reclaim its position as the leading EVM Layer 2.
Performance of New Chains Launched in 2024
Among the new chains launched in 2024, Aleo achieved the highest average new user growth, while Blast saw a gradual decline after setting a single-month record.
For the newly launched chains, Aleo saw the highest new user growth in the month of its launch, averaging 175,200 new users, while Blast and Sei had 134,900 and 90,700 new users respectively. This can be attributed to Blast's sharp user acquisition decline since July, as well as Sei's slow start, despite its mainnet launch, only reaching a peak of 324,500 new users in October.
Whether these chains can regain growth momentum in 2025 remains unclear - especially considering Base's own post-launch decline before its 2024 surge. Among the four new chains tracked, Lava's performance has been overshadowed by its competitors so far, while Blast, despite setting the single-month new user growth record for all new launches in June, still has a lot of ground to make up.
Super Users
Base's Performance
As of December 2024, Base has the most DeFi-related super users, with 15.1 million wallets that have executed 100 or more transactions.
In addition to gaining the most new users, Base has also attracted the largest number of DeFi-related super users, with the number of users executing 100 or more transactions being 38.4% more than the second-placed Ethereum. Closely following are Ethereum with 10.7 million new super users and Polygon with 7 million.
*Note: "Super users" here are defined as users who have made at least 100 transactions on a given chain, regardless of the wallet creation time or the time of the last transaction.
Given Base's explosive growth this year, its impressive super user count may not be surprising. This success is likely due to Base outperforming many legacy chains in several hot areas this year, including but not limited to Meme coins and NFT trading.
On the other hand, Avalanche and Blast have similar super user counts this year, averaging around 1.3 million, while Optimism has performed slightly better with 1.7 million users making at least 100 DeFi transactions.
Polygon's Performance
Polygon added the most new super users in 2024, and its non-DeFi-related super user activity continues to stand out.
Polygon has attracted 1.5 million new super users in 2024 so far - nearly double the second-placed Base.
Polygon's super user activity also surpasses all other observed chains, with a monthly average of 86.77 million super user transactions this year. In addition to Base's impressive 78.63 million super user transactions, Arbitrum has also performed strongly in 2024 so far, reaching 36.53 million super user transactions.
Polygon's outstanding performance is a continuation of the chain's multi-year dominance in super user activity since 2021. The chain's performance in 2021 continued to hold the record for super user activity across all observed chains, reaching 114 million transactions.
However, despite having the highest super user activity across all observed chains, Polygon ranks third in terms of DeFi-related super user wallet count. This suggests that the chain has successfully incentivized high transaction volumes through GameFi and other alternative use cases.
Ethereum's Performance
Ethereum's DeFi-related super user count exceeds the combined total of Arbitrum and Optimism.
As of 2024, Ethereum has 10.9 million active super users in the DeFi space, second only to Base. This represents a larger DeFi super user base than Arbitrum and Optimism combined (6.2 million and 1.8 million, respectively).
Given that EVM L2s are typically faster and lower-cost, this may suggest that many users still find cross-chain bridging of assets too inconvenient or risky, or they value Ethereum's deeper liquidity and dominant market position.
Nevertheless, it is clear that Ethereum's L2s need to find more ways to attract activity beyond just emphasizing their on-chain performance advantages relative to the Ethereum mainnet.
DEX Usage
Uniswap's Market Dominance
Uniswap's market share has grown on all major chains, further strengthening its dominance in the DEX space.
Except for Avalanche and Blast, Uniswap ranks first on all observed chains. Its largest growth occurred on the Base chain, where Uniswap's user base grew from 36.8% of total DEX activity to 91.3% - a significant increase given Base's exponential user growth this year.
Similarly, Uniswap has also seen growth on other major chains:
- A 27.72% increase in relative DEX activity on Ethereum
- A 12.57% increase on Polygon (a chain that has historically had a more diverse distribution of DEX activity across its user base)
Disregarding Uniswap's protocol upgrades, this may reflect a "winner-takes-all" trend in the DeFi space, disproportionately favoring larger, existing players with deeper liquidity and higher brand recognition.
Trader Joe's Dominance on Avalanche
Despite Uniswap's rise in the rankings, Trader Joe has continued to increase its lead on Avalanche:
- Uniswap is now the second most popular DEX on Avalanche (barely making the top five in 2023)
- Trader Joe remains the most popular DEX on Avalanche, accounting for 61.1% of all DEX activity
- Its market share has grown by around 6% since 2023
As the first major DEX natively built on Avalanche, Trader Joe has made several efforts to maintain and expand its leading position:
- Launched Auto-Pools in April to facilitate LP auto-rebalancing and compounding rewards
- Enabled liquidity staking for various Avalanche assets
- Actively expanded to new chains like Arbitrum and BNB Chain, proving the viability of its unique Liquidity Book (LB) model
DEX Usage Trends
The DEX preferences of super users and new users are converging, but transaction activity is less concentrated among super users:
- Unlike 2023, the top three used DEXs on each observed chain are the same for both super users and new users
- Super users' transaction activity is more evenly distributed across multiple DEXs
- This may reflect their familiarity with a broader range of DeFi protocols and a willingness to seek out more favorable opportunities beyond mainstream protocols like Uniswap
Looking Ahead to 2025: Opportunities and Challenges in Web3
On-chain data shows that Web3 user growth continues to rise, with both legacy chains and new contenders facing the pressure to differentiate themselves and provide attractive use cases for both new and existing users. Furthermore, the data clearly indicates that rising public chain native token prices do not necessarily translate to more diversified on-chain activity, and emerging DeFi protocols are facing significant challenges in challenging the advantages of established projects.
Some key trends to watch out for as we enter 2025:
- Base as a Model for Ecosystem Expansion
Base's unprecedented user growth in 2024 has set a benchmark for onboarding and activating new users, which may serve as a reference for other new public chains seeking to gain momentum. Base's success in Meme coin trading and on-chain AI suggests that innovative use cases in emerging domains will continue to drive growth in 2025.
However, how to translate these activities into higher-quality user engagement through sustainable and diversified participation remains a key challenge.
- Ethereum's Growing User Base as an Opportunity for L2s
Despite the performance advantages of L2 networks, Ethereum's growing user base and liquidity dominance have further strengthened its position as the foundation of the Web3 economy. Chains like Optimism may need to refine their strategies to remain competitive and convince Ethereum's increasingly mainstream users to enter their on-chain ecosystems.
- Success Requires Differentiation or Scale Economies
Uniswap's growing dominance suggests that most major DeFi markets are trending towards a "winner-takes-all" dynamic. Nevertheless, chains like Avalanche and Polygon are proving that targeted innovations, such as Trader Joe's Auto-Pools or Polygon's GameFi initiatives, can carve out significant market niches.
In 2025, protocols that focus on developing differentiated on-chain products beyond "basic" DeFi activities will be key to gaining more market attention.
- Shifting from Quantity to Quality as New Users Enter
Ecosystem builders that can find ways to incentivize users to participate in multiple activities beyond just trading (such as governance and staking) in a sustained and balanced manner will be better positioned for sustainable growth. As wallet growth accelerates, chains that prioritize high-quality engagement will see long-term ecosystem health.
Summary
Overall, as the number of wallets on various chains has grown and overall trading volume has increased this year, user quality has declined. Given the recent record highs in user activity and token valuations, this reflects that the industry has attracted a large influx of new users - these users are currently only occasionally participating, but they are likely to be guided to the various use cases provided by Web3.
(Trends in user quality across public chains)
Key findings include:
Base's Performance
- Base is one of the biggest success stories in user growth in 2024.
- Therefore, the chain's relatively low user quality score is not a negation of Base's overall performance. Rather, it highlights the narrow scope of on-chain activities currently engaged in by its large new user base - and also underscores the upside potential in guiding these users towards more in-depth and multi-faceted on-chain activities.
Ethereum's Performance
- Ethereum saw the largest decline in user quality before the launch of several SEC-approved ETH ETFs.
- This suggests that institutional buying may trigger wallet growth, but unless there are more incentives and easier onramps (such as protocol governance), it may not necessarily lead to broader and deeper on-chain activity.
Blast's Performance
- Blast's user base demonstrated broad and deep engagement at launch, reflecting the chain's ability to incentivize various gamified on-chain activities.
- While Blast's user growth saw a significant decline in Q4 2024, its remaining users remain active in multiple areas, suggesting the chain has the potential to go beyond its initial hype and achieve greater accomplishments.
