The cryptocurrency industry had a remarkable year in 2024, marked by increasing coin prices. However, on-chain user activity didn’t grow uniformly across all relevant chains. According to a report from the blockchain growth platform Flipside, there was a need for networks to offer both quantity and quality of on-chain activity to attract users and turn them into valuable contributors.
The report found that the layer-2 network launched by Coinbase, called “Base,” experienced tremendous growth in user count throughout the year. On the other hand, some other networks like Bitcoin and certain Ethereum-based layer-2 chains struggled to maintain their growth or even attract new users.
Base Takes the Lead Base had an incredible year in terms of user growth. Its monthly acquired users increased by 56 times from January, reaching a record high of 19.4 million in October. Despite starting slow, it managed to contribute 13.7 million new users, which is nearly eight times more than the second-highest contributor, Polygon.
Moreover, Base saw 15.1 million super users execute over 100 decentralized finance (DeFi) transactions each month. This figure is 38.4% higher than the next chain, Ethereum, which had 10.7 million super users. Ethereum Follows Closely Behind While Base had an impressive year, Ethereum also saw significant growth in its user activity.
It averaged 1.56 million acquired users per month, outperforming its layer-2 networks Arbitrum and Optimism. Its DeFi-related super users totaled 10.9 million, more than double the figures for Arbitrum and Optimism, which had 6.2 million and 1.8 million users respectively. Institutional Acceptance and Other Factors Flipside attributed much of this growth to increasing institutional acceptance of cryptocurrencies.
They pointed out that the leading asset manager Grayscale listed several new cryptocurrencies as “assets under consideration,” indicating that institutional investors are increasingly interested in digital assets. However, there were some signs of caution too. For example, while Bitcoin’s acquired users increased by 935,900 monthly despite its historic surge and the launch of spot Bitcoin ETFs in the US, they dropped 28.5% during the post-US election rally in November.
This suggests that much of the growth was due to speculative activities rather than genuine interest in using the network. In conclusion, while some chains like Base and Ethereum saw impressive growth in user activity this year, others like Bitcoin struggled to maintain momentum. As the industry continues to evolve, it remains crucial for networks to focus on attracting both quantity and quality of on-chain users to sustain long-term success.
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