Annual report on on-chain users: The number of new monthly users reached 19.4 million, with Base chain contributing nearly 70% of the increase

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Author: flipside

Compiled by: TechFlow

1. Introduction

On-chain user trends towards 2025

2024 was a pivotal year for Web3 user growth, with record-high new users and super users on major public chains. Chains like Base have redefined what exponential growth looks like, while Ethereum and its L2 solutions have demonstrated how entrenched ecosystems can adapt to evolving user demands.

However, deeper data analysis reveals that not all growth is created equal - highlighting the importance of focusing on quality, not just quantity, when assessing on-chain activity.

To this end, this report leverages Flipside's real-time 2024 on-chain crypto user data to evaluate this year's crypto activity through more actionable multi-variate metrics, beyond just traditional performance indicators, to provide new ways to assess the health of on-chain users in 2025.

Executive Summary

Beneath the headlines of user growth lies a deeper challenge: how to build ecosystems that foster meaningful, sustained engagement, not just fleeting speculation.

In short, most blockchains remain in the early stages of converting casual users into high-value contributors.

User Acquisition:

Base: Set a record of 19.4M new users in October 2024, with Base contributing 13.7M - nearly 8x the second-place Polygon.

BTC: Despite BTC price hitting new highs above $100K, Bitcoin's monthly user acquisition averaged only 935,900, indicating speculation among existing users rather than significant new user onboarding.

ETH: Averaged 1.56M monthly new users, outpacing Arbitrum and Optimism, with a 33.4% QoQ user growth spike in March. Notably, Arbitrum saw an outstanding single-month peak of 3.3M new users in May.

Super User Trends:

Base: Attracted 15.1M wallets with 100+ DeFi transactions, 38.4% more than Ethereum's 10.7M super users.

ETH: 10.9M DeFi-related super users exceeded the combined totals of Arbitrum and Optimism (6.2M and 1.8M respectively), highlighting Ethereum's liquidity and accessibility advantages.

Polygon: Added 1.5M new super users in 2024 and recorded 867.7M super user transactions this year, underscoring its success beyond DeFi.

DEX Usage:

Uniswap: Expanded its dominance across major chains, capturing 91.3% of new user DEX activity on Base, and grew its market share on Ethereum by 27.72% compared to 2023.

While Uniswap saw growth, Trader Joe maintained its lead on Avalanche with a 61.1% market share, up 6.1% from 2023.

Unlike 2023, the top 3 DEXes by new users and super users were consistent across all observed chains in 2024.

2. New User Acquisition

New user acquisition peaked at 19.4M monthly in October 2024.

This year's on-chain user growth was led by Base, contributing 13.7M new users in that month - nearly 8x the second-place Polygon. Overall, it has been an impressive year for the entire on-chain user growth industry, with user acquisition maintaining a steady upward trend throughout 2024, with only a slight dip in August.

Note: "New users" are defined as users who have made at least 2 transactions on a chain, with the second transaction occurring in 2024.

Annual On-Chain User Report: Monthly new users peak at 19.4M, with Base contributing nearly 70% of the growth

This sustained growth may be influenced by increased institutional crypto adoption, 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 listing several new crypto assets as "under consideration" and the Federal Open Market Committee (FOMC) cutting US interest rates by 50 basis points in September 2024 - the first rate cut in four years - may have also contributed to this optimistic sentiment.

Base's Remarkable Growth

Base started the year slowly, but its monthly new user acquisition has exploded 56-fold since January.

Base had only 244,700 new users in January, but 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 4.7M new users per month during 2024.

The chain's performance has greatly benefited from Coinbase's massive user base, collectively controlling around $130B in assets. Popular DeFi protocols like Aerodrome may have also attracted users from other EVM chains, while Base has successfully driven user interest through meme coin trading and on-chain AI initiatives like Based Agents.

Bitcoin's Performance

Despite BTC price hitting new highs, it did not attract a significant influx of new users this year.

Bitcoin's new user acquisition remained relatively flat in 2024, despite the substantial price appreciation. Overall, Bitcoin's monthly new user growth averaged 935,900, ranking third-to-last among the seven traditional chains observed in this report.

This suggests that the rise in BTC price was primarily driven by enthusiasm and speculative activity among its existing user base, rather than significant onboarding of new users.

In March 2024, when BTC saw its first major price surge, it coincided with a 19.2% QoQ increase in new user acquisition. However, in November - when BTC reached the long-awaited $100K milestone amid continued price appreciation - new user acquisition actually declined 28.5% QoQ.

Ethereum and L2s Performance

Ethereum's new user acquisition outpaced its traditional L2s overall, but Arbitrum also saw an impressive single-month spike.

Ethereum's growth exceeded its two leading L2 chains in 2024, averaging 1.56M new users per month, compared to 1.2M for Arbitrum and 348,800 for Optimism. Excluding December, Ethereum only saw four months of QoQ declines, and reached a single-month peak of 1.9M new users in March - a 33.4% QoQ increase.

Arbitrum and Optimism both started the year with strong momentum, reaching their respective 2024 new user growth peaks in April and May, before tapering off for the rest of the year.

Annual On-Chain User Report: Monthly new users peak at 19.4M, with Base contributing nearly 70% of the growth

However, it's worth noting that Arbitrum's single-month peak of 3.3M new users in May exceeded Ethereum's highest single-month total in 2024. In this context, Arbitrum's new user growth has outpaced Optimism throughout the year, benefiting from the success of Arbitrum One and its integration into GameFi and SocialFi. With 169 builder grants approved in the first half of 2024 and many behind-the-scenes developments, it remains to be seen whether Arbitrum can reclaim its position as the leading global EVM L2.

New Chain Performance in 2024

Among the new chains launched in 2024, Aleo achieved the highest average new user growth, while Blast saw a record single-month peak followed by a gradual decline.

For the new chains, in their launch months, Aleo had the highest new user growth, averaging 175,200 new users per month, compared to 134,900 for Blast and 90,700 for Sei. This can be attributed to Blast's user acquisition plummeting sharply from July, as well as Sei's slow start - despite launching its mainnet months earlier, it only reached a QoQ peak of 324,500 users in October.

Annual On-Chain User Report: Monthly new users peak at 19.4M, with Base contributing nearly 70% of the growth

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It is still unclear whether these public chains will regain their growth momentum by 2025 - especially considering that Base also experienced a similar post-launch cooling period before its surge in 2024. Among the four new public chains being tracked, Lava's performance has been overshadowed by its competitors so far, and although Blast recorded the highest monthly user growth among the newly launched public chains in June, there is still a lot of ground to catch up.

3. Super Users

As of December 2024, Base had the most DeFi-related super users, with 15.1 million wallets executing 100 or more transactions.

In addition to gaining the most new users, Base 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-ranked Ethereum. Closely following are Ethereum's 10.7 million new super users and Polygon's 7 million.

Note: The definition of "super user" is a user who has executed at least 100 transactions on a given chain, regardless of the creation time of the related wallet or the time of the last transaction.

Annual On-Chain User Report: Monthly New User Growth Peaked at 19.4 Million, with TechFlow Chain Contributing Nearly 70% of the Increment

Given TechFlow's explosive growth this year, its impressive number of super users may not be surprising. This success is likely due to TechFlow surpassing many traditional public chains in several hot areas this year, including but not limited to meme coins and Non-Fungible Token transactions.

At the other end, Avalanche and Blast had similar super user numbers this year, averaging around 1.3 million, while Optimism performed slightly better with 1.7 million users making at least 100 DeFi transactions.

Polygon's Outstanding Performance

Polygon added the most super users this year and continued to stand out in non-DeFi-related super user activity.

Polygon has attracted 1.5 million new super users in 2024 so far - nearly double the second-ranked TechFlow.

Polygon's super user activity also surpassed all other observed public chains, reaching an average of 86.77 million super user transactions per month this year. Apart from TechFlow's impressive 78.63 million super user transactions, Arbitrum also performed strongly in 2024, reaching 36.53 million super user transactions.

Annual On-Chain User Report: Monthly New User Growth Peaked at 19.4 Million, with TechFlow Chain Contributing Nearly 70% of the Increment

Polygon's outstanding performance has continued its long-standing leadership in super user activity since 2021. In 2021, Polygon's transaction volume reached 1.14 billion, setting the highest record for super user activity across all blockchains, and has maintained this position.

However, despite Polygon having the highest super user activity among all blockchains, its number of DeFi-related super user wallets ranks only third. This suggests that Polygon has successfully attracted a large number of high-frequency trading users through GameFi and other application scenarios, not just relying on DeFi applications.

Ethereum's super user numbers in the DeFi domain exceed the total of Arbitrum and Optimism.

As of 2024, Ethereum has reached 10.9 million super users in the DeFi domain, second only to TechFlow. This figure is far higher than the combined total of Arbitrum (6.2 million) and Optimism (1.8 million).

While EVM L2s (Ethereum Virtual Machine-compatible Layer 2 networks) often have faster speeds and lower transaction costs, many users may still find cross-chain asset bridging too complex or risky, or may prefer to use the Ethereum mainnet due to its deeper liquidity and more mature market position.

However, Ethereum's Layer 2 networks need to further explore ways to attract users beyond just relying on their performance advantages over the Ethereum mainnet.

4. DEX Users

Uniswap has continued to expand its market share across major blockchains, further consolidating its position as the leader in the decentralized exchange (DEX) domain.

Among all the observed chains, Uniswap remains the undisputed number one, with the exception of Avalanche and Blast chains. Particularly on the TechFlow chain, Uniswap's user share soared from 36.8% to 91.3%, a remarkable achievement given the exponential growth of TechFlow chain users this year.

Similarly, Uniswap's performance has also improved on other major chains. Compared to 2023, its DEX activity share on Ethereum grew by 27.72%, while on Polygon it grew by 12.57%. It is worth noting that Polygon has always had a more diversified distribution of DEX activity, with its user base exhibiting more varied trading behavior compared to other leading chains.

Even without considering Uniswap's protocol upgrades, this phenomenon may reflect a "winner-takes-all" trend in the DeFi domain, where larger platforms occupy a greater market share due to their deep liquidity and brand recognition.

Annual On-Chain User Report: Monthly New User Growth Peaked at 19.4 Million, with TechFlow Chain Contributing Nearly 70% of the Increment

On Avalanche, Trader Joe has further consolidated its leading position, while Uniswap's ranking has also improved.

Uniswap is now the second most popular DEX on Avalanche, whereas in 2023 it did not even make the top five. However, Trader Joe remains the most popular DEX on Avalanche, occupying 61.1% of the market share, and has increased its market share by about 6% since 2023.

Annual On-Chain User Report: Monthly New User Growth Peaked at 19.4 Million, with TechFlow Chain Contributing Nearly 70% of the Increment

As the first native-built major DEX on Avalanche, Trader Joe has been committed to maintaining and expanding its market-leading position. The launch of the Auto-Pools feature in April this year has made it easier for liquidity providers (LPs) to automatically adjust their positions and compound their yields. Additionally, the platform supports liquidity staking for various Avalanche assets and has actively expanded to new chains like Arbitrum and BNB Chain, validating the viability of its unique Liquidity Book (LB) model.

The results show that Trader Joe's efforts provide a successful case study that other platforms aspiring to establish a foothold in the competitive DEX market can learn from.

The DEX preferences of super users and new users are converging, but super users' trading activity remains more diversified.

Unlike 2023, the top three DEXs used by both super users and new users are now consistent across each observed chain. This suggests that new users have become more adept at emulating the behavior of experienced traders, or that leading DEXs have found more effective ways to optimize their trading paths.

Nevertheless, super users' trading activity is still distributed across more DEXs, as they are more familiar with a wider range of DeFi protocols and are willing to explore opportunities beyond mainstream platforms like Uniswap to seek higher yields or unique trading conditions.

Looking Ahead: Opportunities and Challenges for Web3 in 2025

On-chain data shows that Web3 user numbers continued to grow in 2024, while traditional blockchains and new competitors face the challenge of standing out in the market and providing attractive use cases for both new and existing users. Additionally, the rise in on-chain native token prices has not significantly driven diversified on-chain activity, and emerging DeFi protocols have faced considerable resistance in challenging the existing giants.

Here are some key trends to look forward to in 2025:

TechFlow as a Benchmark for Ecosystem Expansion

In 2024, TechFlow became a model for attracting and retaining new users with its explosive user growth, providing a reference for other aspiring new blockchains. TechFlow's success in meme coin trading and on-chain AI applications suggests that innovative use cases around hot topics will continue to drive user growth in 2025. However, how to convert these high-frequency trading activities into more sustainable and diversified user engagement remains an important challenge.

Ethereum User Growth Brings New Opportunities for L2 Chains

Although Ethereum's Layer 2 (L2) networks typically have performance advantages, Ethereum, with its massive user base and liquidity, remains at the core of the Web3 economy. L2 chains like Optimism may further adjust their strategies to attract Ethereum's growing mainstream users and guide them to their own chain ecosystems.

Differentiation or economies of scale are the keys to success

Uniswap's market dominance is growing, indicating a "winner-take-all" trend in the DeFi market. However, chains like Avalanche and Polygon have proven that they can occupy important positions in specific markets through targeted innovation. For example, Trader Joe's Auto-Pools feature simplifies the operations of liquidity providers, while Polygon's GameFi projects have attracted a large number of gamers. Looking ahead to 2025, protocols that can provide differentiated on-chain services and go beyond traditional DeFi functions are more likely to attract market attention.

Shifting from user quantity to user quality

With the influx of new users, blockchain ecosystem builders need to find ways to incentivize users to participate in more diverse activities, such as governance voting and staking, rather than just trading. As the number of wallets grows rapidly, chains that prioritize user quality and focus on diversified participation will have an advantage in the long-term healthy development of the ecosystem.

5. Data-driven user quality insights

What are Flipside Scores?

As 2025 approaches, the Web3 industry faces an important challenge: how to distinguish short-term active phenomena from truly sustainable growth. Although the surge in new users and transaction volumes in 2024 brought an optimistic outlook for the industry, the key question is whether these users will remain long-term and contribute to the long-term development of the blockchain ecosystem. Flipside Scores are designed to solve this problem.

Flipside Scores quantify the quality of user on-chain activities by integrating 15 performance metrics (covering five categories). Unlike simple metrics based solely on transaction volume, this approach can comprehensively reflect the breadth and depth of user activities, revealing which ecosystems are performing well and where there is room for improvement.

User quality trends on different chains

Annual on-chain user report: monthly new users reach up to 19.4 million, Base chain contributes nearly 70% of the increment

Overall, in 2024, as the number of wallets and on-chain transactions surged, the user quality of various chains declined. This phenomenon reflects that the industry has attracted a large number of new users, whose current participation is relatively low, but they are expected to gradually explore the diverse use cases provided by Web3 in the future.

Here are some key findings:

  • Base: One of the typical success cases in user growth in 2024. Although the user quality score of this chain is relatively low, this does not mean that Base's overall performance is poor. On the contrary, it indicates that its large new user group is currently focused on fewer on-chain activities, and Base still has great potential for improvement by guiding these users to participate in more diverse ecosystem activities.
  • ETH: User quality declined significantly before the listing of SEC-approved ETH ETFs. This suggests that the influx of institutional capital, while driving rapid growth in the number of wallets, may not lead to an increase in the depth of user on-chain activities if there are insufficient incentive mechanisms and convenient participation channels (such as protocol governance).
  • Blast: Successfully attracted users to actively participate in multiple on-chain activities in the early stage, demonstrating its strong capabilities in incentivizing gamified activities. Although Blast's user growth slowed down in the fourth quarter of 2024, the remaining users remained active in multiple areas, indicating that the chain is likely to go beyond the initial hype and achieve long-term development.

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Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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