Source: Coindesk
Authors: Angela Minster, Eric Stone, Nelson Wang
Compiled by: BitpushNews
The true pioneers of Web3 will undoubtedly be those who can distill the golden rules that drive growth from raw data.
The crypto space has been inundated with various metrics, most of which paint an unclear picture. Trading volume, token prices, and exaggerated headlines often obscure what truly matters: the quality of user engagement and the potential for organic, exponential growth. As the industry moves away from hype, reliable, data-driven success signals are no longer optional—they are essential.
The good news is: the tools to eliminate noise already exist. By combining multiple on-chain metrics into a single 'health index' score that indicates the depth and quality of overall user engagement, we can identify which chains are truly thriving and ready for long-term growth. As 2024 comes to a close, let’s dive into what these signals reveal about the current mainstream blockchains and what we expect for 2025.
Evaluate user quality using aggregated data rather than isolated data.
When creating a sustainable on-chain ecosystem, optimizing any single user action makes no sense. What is needed is context—a method that not only quantifies everything users are doing, but also quantifies the importance of those actions. One promising way to achieve this is to categorize user behavior into five core categories:
Trading activity, from spot trading to smart contract interactions.
Medium to long-term token accumulation and other 'investment' behaviors.
DeFi participation, for activities such as staking, lending, and liquidity provision.
NFT activities, such as minting, trading, and utility-driven interactions.
Governance participation, quantifying contributions to DAOs or protocol governance.
It is crucial not to simply aggregate all metrics into an average score. A better approach is to use Bayesian models to weight and combine them, generating a single, most important 'score.' Traditional scoring systems rely on static thresholds or simple averages, whereas Bayesian models differ by allowing us to incorporate prior knowledge (our expectations of 'normal' wallets) and new evidence (actual activities observed on-chain) simultaneously. These dynamic, multi-variable scores are harder to manipulate and therefore more likely to reveal accurate, actionable insights.
What does the data from 2024 tell us?
The approaches mentioned above provide a new perspective on user activity for each chain before 2024; let’s take a look at some more surprising findings.
Solana (the light blue line peaking around 2.75 in the chart) attracted a large number of high-quality users during the period from February to mid-March, but the quality of user engagement has declined since then.
Interestingly, this decline coincided with a spike in SOL's price and trading volume in 2024, and has continued through the current memecoin craze.
When evaluated using Bayesian models, the returns on repetitive actions diminish, meaning that for any given wallet, the score increase from multiple token swaps is less than the score increase from engaging in a variety of activities. This suggests that most Solana users currently only participate in a limited range of on-chain activities, which do not contribute to Solana's multi-faceted growth.
As for Ethereum supporters (the bottom orange line starting just above 1), they expect this year's ETH ETF to be a game changer, but the numbers tell a different story.
By the first half of 2024, Ethereum's user scores remained low and stable, indicating that this year's bullish developments have not stimulated broader ecosystem participation, such as DeFi activities and protocol governance.
According to the data, it is noteworthy that, relative to its total user base, Axelar (the dark blue line starting from 2.5) has the most active users engaged in the broadest range of on-chain activities. While Axelar's current TVL is significantly smaller than the traditional blockchains that dominate today's headlines, this is an interesting signal worthy of close examination—one that would be overlooked if we only looked at market cap or trading volume.
The key point here is not to say that Solana is doomed to fail, nor that Axelar will inevitably become the largest blockchain in the world. The value of comparing these types of scores across chains is limited, as each score is proportional to the quality of users on its corresponding chain. In other words, given the differences in baseline activity across each chain, a Solana user with a score of '4' may be very different from a user with a '4' on Axelar. Therefore, these scores are most useful for tracking the overall quality of user activity on a chain over time, rather than for cross-chain comparisons.
2025 Forecast
That said, what can the user quality records of each chain tell us about next year?
First, it is clear that Solana faces significant challenges and opportunities as it enters 2025. The chain's development trajectory depends on its ability to retain its large casual user base and expand their on-chain interactions. If it fails to do so, a significant decline may follow once the memecoin craze subsides—though data from early 2024 suggests that regardless of short-term events, the chain has a substantial base of high-quality users who are likely to stick around.
2024 has proven that Axelar can attract a concentrated user base engaged in diverse, sustained on-chain activities, rather than speculative spikes. The challenge now for Axelar will be to expand its ecosystem without diminishing the quality of its user base. This may involve prioritizing high-profile partnerships to unlock new audiences while creating more beginner-friendly entry points within its dApp ecosystem.
Ethereum's fragmentation has shifted many active users to its faster, cheaper L2 ecosystems, so we may see mainnet activity increasingly consolidating around core functionality protocols for staking and governance. These activities are crucial for the broader EVM ecosystem, but this trajectory may be punished by scoring systems that reward diverse on-chain participation.
This dynamic highlights the challenges faced by scoring systems: prioritizing a broad range of user activities may present an incomplete picture when applied to specific task networks (or those evolving into more specialized general chains). Therefore, it is crucial to clearly define what success means for any chain being assessed and to use a scoring system capable of capturing the corresponding user actions.
A better way to define and drive on-chain growth
Web3 has spent too long chasing the wrong metrics and has failed to view the data comprehensively. In 2025, the winners will be those who find multi-variable methods to measure and address the most important element—user quality.
By incorporating new scoring methods into their dashboards, on-chain intelligence platforms can provide more meaningful insights for investors and industry observers. Meanwhile, Web3 builders can use these scores to clarify priorities and drive user engagement and value creation. Ultimately, this will help the entire industry shift from hype-driven narratives to data-supported strategies, unlocking the full potential of Web3 in 2025 and beyond.
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