Blockchain protocols have witnessed significant user growth, driven by varying factors from Ethereum-based re-staking to the continuous expansion of older networks like Polygon.
Notably, June 14 marked a peak in activity, with 181 protocols engaging 588 million token holders. Despite the buzz around these networks, the newer Base blockchain has yet to be included in this rising trend.
Protocols with the biggest 7d uptick in tokenholder count.Why are investors buying into these protocols specifically? pic.twitter.com/fCt0ph8Pl2
— Token Terminal (@tokenterminal) June 16, 2024
Driving factors behind user influx
The recent uptick in user engagement can be attributed to hype and genuine performance improvements across these networks. Protocols like Aerodrome and Ondo have shown consistent user growth, setting new records almost daily. In particular, the re-staking Layer 3 protocol Pendle has seen its token holders double since March. Moreover, Ether. Fi has broken new ground by reaching 70.8K token holders, highlighting its increasing appeal among blockchain users.
Polygon’s gradual growth illustrates a broader adoption across games and DeFi protocols, necessitating MATIC ownership for participation. Similarly, smaller projects like Morpho are gradually increasing their user base while experiencing a rapid uptick in transaction fees. Additionally, COW Protocols has gained attention on social media, increasing stable user activity across its applications.
Trends in gaming and DeFi sectors
Gaming protocols, as reported by DappRadar, have seen a notable resurgence, marking a shift away from the play-to-earn model to more sustainable incentives like airdrops and whitelisting. In May alone, gaming applications expanded their user count by 7%, contributing to an overall retention of more than 10 million monthly active wallets. Daily active wallets in the gaming sector have grown to 3.13 million.
1/ The DappRadar x @BGameAlliance Games Report for May 2024 is live!In May, gaming dapps hit a new ATH with 3.13M dUAW, led by strong performances from @Ronin_Network and @Immutable.Overview in the thread Read the full report https://t.co/X6KwS0KK1M
— DappRadar Insights (@InsightsByDR) June 13, 2024
Despite this growth, the DeFi sector has experienced a decline from a peak of 6.9 million users in March to 5.4 million in May. The DeFi wallets increased from 35 million at the beginning of the year to 59 million by the end of May, although this number may not reflect unique users.
Blockchain performance and user engagement
On the broader blockchain landscape, Ethereum continues to dominate in scalability and diverse product offerings. In contrast, blockchains like Avalanche C-Chain have remained stagnant. Near Protocol, Telegram (TON), and Polygon have shown stable performance based on wallet count in recent months.
Arbitrum has emerged as a noteworthy performer among newer blockchains, experiencing significant growth over the past three months. Despite this, the blockchain space struggles with genuine user engagement, overshadowed by automated bot activity and DeFi speed trading. Solana, TRON, and Near Protocol lead in terms of active wallet counts, although the focus remains mainly on a few smart contracts, such as those for stablecoins and MEV bots.
The blockchain sector continues to evolve, with growth being driven by a mix of hype, strategic incentives, and genuine performance improvements across various networks. Understanding these dynamics will be crucial for users and investors navigating the blockchain space as the ecosystem matures.
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