While Web3 has made notable progress across key innovation and adoption indicators, it is still dealing in minority proportions when compared to Web2. Active on-chain users account for less than 1% of the global population and average retention rate of networks stands at 5.4%. In comparison, 67.1% of the global population uses the internet, and Web2 retention rates are significantly higher, with a good benchmark rate considered between 25-40%.
Two noticeable market trends are distorting Web3 adoption and retention metrics. First, excessive speculation, especially around meme coins, leads to temporary demand and short-lived engagement. Second, the strong investor focus on infrastructure projects has overshadowed the essential development of consumer-facing dApps needed to drive lasting adoption among everyday users.
Building decentralized applications (“dApps”) that provide real utility for everyday users is fundamentally important to scaling Web3 and addressing retention challenges. Consumer-focused Web3 dApps, particularly those centered on speculation, social interaction, or gaming, have shown notable promise in drawing active users, as reflected in the growth of unique active wallets (“UAWs”) over the past year.
Expanding the presence of Web3 dApps across various distribution channels will be key to achieving broader market reach, especially as overlaps with Web2 ecosystems become more prevalent. Tapping into existing product bases like Telegram or creating shortcuts to the blockchain like Blinks can significantly boost exposure and capitalize on the vast network effects of Web2 users.
Fewer than 10% of leading Web3 dApps offer native mobile experiences. Given the growing dominance of mobile internet traffic, enabling mobile accessibility is crucial for engaging users where they are most active.
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