Original: Flipside
Compiled by: Yuliya, PANews
With the rapid development of the Web3 ecosystem, 2024 has become a milestone year for blockchain user growth. Major blockchain networks have set historical highs in both new user counts and super user scales, with emerging public chains like Base redefining the possibilities of user growth, while Ethereum and its L2 networks demonstrate the adaptability of mature ecosystems to evolving user demands.
However, a deeper analysis of on-chain data reveals significant differences in the quality of user growth. This phenomenon highlights that when assessing on-chain activity, it is essential not only to focus on quantitative metrics but also to emphasize the quality dimension of user engagement. This report, based on Flipside's real-time data on on-chain crypto users for 2024, comprehensively assesses the annual cryptocurrency ecosystem development status by combining traditional performance metrics with multi-dimensional actionable indicators, providing a new analytical framework for assessing on-chain user health in 2025.
TL;DR
Beneath the surface of record user growth lies a deeper challenge: how to build ecosystems that create meaningful, lasting engagement rather than fleeting speculative behavior. In short, most blockchains are still at an early stage in converting ordinary users into high-value contributors.
New User Situation:
Base set a record of 19.4 million new users in October 2024, with Base contributing 13.7 million, nearly eight times that of the second-place Polygon.
Despite Bitcoin's price breaking the $100,000 mark, its monthly average of new users was only 935,900, indicating that speculative activities among existing users were more common rather than significant new user entry.
Ethereum averaged 1.56 million new users per month, surpassing Arbitrum and Optimism, with a month-over-month increase of 33.4% in March. Notably, Arbitrum reached a peak of 3.3 million new users in May.
Super User Performance:
Base attracted 15.1 million wallets executing 100+ DeFi transactions, 38.4% more than second-place Ethereum's 10.7 million super users.
Ethereum's 10.9 million DeFi-related super users exceed the combined total of Arbitrum and Optimism (6.2 million and 1.8 million, respectively), highlighting Ethereum's advantages in liquidity and convenience.
Polygon added 1.5 million super users in 2024, recording 867.7 million super user transactions for the year, underscoring its success in use cases beyond DeFi.
DEX Usage Overview:
Uniswap expanded its dominance on major public chains, accounting for 91.3% of new user DEX activity on Base, with a market share increase of 27.72% on Ethereum compared to 2023.
Despite Uniswap's continuous expansion, Trader Joe still maintains its leading position on Avalanche, with a market share of 61.1%, up 6.1% from 2023.
Unlike 2023, the current observed rankings of the top three DEXs in terms of new users and super users on each chain remain consistent.
New Users
In October 2024, new users reached a monthly high of 19.4 million.
This year's on-chain user growth has been primarily led by Base, which contributed 13.7 million new users this month—nearly eight times that of second-place Polygon. Overall, this has been an impressive year for on-chain user growth across the industry, with a sustained upward trend in new users throughout 2024, showing only a slight pullback in August.
*Note: Here, 'new users' are defined as users who have conducted at least 2 transactions on a chain, with their second transaction occurring in 2024.
This ongoing growth may have been influenced by the increased institutional recognition of cryptocurrencies, evidenced by a series of BTC and ETH ETFs announced earlier this year.
Other exciting developments in the first half of 2024 may have also fueled this optimism, such as Grayscale listing several new cryptocurrencies as 'assets under consideration' and the Federal Open Market Committee (FOMC) meeting in September 2024, where the Fed lowered U.S. interest rates by 50 basis points—its first rate cut in four years.
Performance of Base
Base started slowly in 2024, but its monthly new user numbers have surged 56 times since January.
Base had only 244,700 new users in January, but experienced stable and significant growth throughout the year.
By November, the chain's monthly new user count had increased 56 times compared to January, averaging 4.7 million new users per month in 2024.
The chain benefits greatly from Coinbase's massive user base, which collectively holds about $130 billion in assets.
Popular DeFi protocols like Aerodrome may have also attracted users from other EVM chains, while Base has successfully generated attention in popular areas like meme token trading and on-chain AI through new initiatives (such as Based Agents).
Bitcoin's Performance
Despite Bitcoin's price reaching new historical highs, it did not attract a large number of new users this year.
In 2024, the number of new users of Bitcoin remained relatively stable, despite a significant appreciation in BTC value. Overall, Bitcoin averaged 935,900 new users per month this year, ranking third from the bottom among the seven traditional chains observed in this report.
This indicates that the rise in Bitcoin's price is primarily driven by the enthusiasm and speculative activities of its existing user base, while the effect of BTC's price increase on attracting new users has been mixed.
In March 2024, BTC's first major price surge coincided with a 19.2% month-over-month increase in new users, but in November—when BTC reached the long-anticipated $100,000 milestone amidst a continuous price increase—new users actually decreased by 28.5% month-over-month.
Performance of Ethereum and Layer 2
Ethereum's new users overall surpassed those of its traditional L2s, but Arbitrum also showed impressive single-month growth.
In 2024, Ethereum's growth surpassed its two main L2 chains, averaging 1.56 million new users per month, while Arbitrum had 1.2 million and Optimism had 348,000. Excluding December, Ethereum only had four months with month-over-month declines, peaking at 1.9 million new users in March—a month-over-month increase of 33.4%.
Arbitrum and Optimism both started the year with considerable momentum, reaching peaks in new user growth in April and May 2024, with user growth declining for the remainder of the year.
It is worth noting that Arbitrum's addition of 3.3 million new users in May surpassed Ethereum's peak in any single month in 2024. Against this backdrop, Arbitrum's user growth has continued to outpace Optimism throughout the year, thanks to the success of its Arbitrum One program and the expansion of GameFi and SocialFi integrations. In the first half of 2024, 169 builder grants were approved, along with many behind-the-scenes advances, and it remains to be seen whether this chain can regain its position as the world's leading EVM L2 chain.
Performance of Newly Launched Chains in 2024
Among the chains launched in 2024, Aleo achieved the highest average new user growth, while Blast gradually faded after setting a single-month record.
Among newly launched chains, Aleo achieved the highest user growth in the month of launch, with an average of 175,200 new users, while Blast and Aleo had 134,900 and 90,700 new users, respectively. This can be attributed to the sharp decline in user acquisition for Blast since July and the slow start of Sei, which, despite launching its mainnet long ago, only reached a month-over-month peak of 324,500 users in October.
It remains unclear whether these chains can regain growth momentum in 2025—especially considering that Base also experienced a similar post-launch decline before its surge in 2024. Among the four new chains tracked, Lava's performance so far has been overshadowed by competitors, and although Blast set a record for the highest monthly new user growth among all newly launched chains in June, there is still much ground to make up.
Super Users
Performance of Base
As of December 2024, Base has the most DeFi-related super users, with 15.1 million wallets executing 100 or more transactions.
In addition to having the most new users, Base also attracted the largest number of DeFi-related super users, with the number of users conducting 100 or more transactions being 38.4% higher than the second-place Ethereum. Following closely are Ethereum's 10.7 million new super users and Polygon's 7 million.
*Note: Here, 'super users' are defined as users who have conducted at least 100 transactions on a chain, without regard to the wallet creation date or the date of the last transaction.
Given Base's explosive growth this year, its impressive number of super users may not be surprising. This success is likely attributed to Base surpassing many traditional chains in several popular areas this year, including but not limited to meme tokens and NFT trading.
On the other hand, 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 conducting at least 100 DeFi transactions.
Performance of Polygon
Polygon added the most new super users in 2024, with its non-DeFi-related super user activity continuing to perform outstandingly.
Polygon has attracted 1.5 million new super users in 2024 to date—almost double that of second-place Base.
Polygon's super user activity also surpassed all other observed chains, with an average monthly super user transaction volume of 867.7 million this year. In addition to Base's impressive 786.3 million super user transactions, Arbitrum has also performed strongly in 2024, reaching 365.3 million super user transactions.
Polygon's outstanding performance is a continuation of the chain's years of dominance in super user activity since 2021. The chain's performance in 2021 continues to hold the record for super user activity among all observed chains, reaching 1.14 billion transactions.
However, despite having the highest super user activity among all observed chains, Polygon ranks third in terms of the number of DeFi-related super user wallets. This indicates that the chain has successfully incentivized high transaction volumes through GameFi and other alternative use cases.
Ethereum's Performance
Ethereum's number of DeFi-related super users exceeds the total of Arbitrum and Optimism combined.
As of 2024, Ethereum has 10.9 million active super users in DeFi, second only to Base. This represents a larger DeFi super user base than the combined totals of Arbitrum and Optimism (6.2 million and 1.8 million, respectively).
Considering that EVM L2s are generally faster and cheaper, this may suggest that many users still view cross-chain bridging of assets as too inconvenient or risky, or they place more value on Ethereum's deeper liquidity and the advantages of its market dominance.
Regardless, it is clear that Ethereum's L2 needs to find more ways to attract activity rather than just emphasizing their on-chain performance advantages relative to Ethereum's mainnet.
DEX Usage
Uniswap's Market Dominance
Uniswap's market share has increased across all major chains, further strengthening its dominance in the DEX space.
In addition to Avalanche and Blast, Uniswap ranks first across all observed chains. Its largest growth occurred on the Base chain, where Uniswap's user base grew from accounting for 36.8% of total DEX activity to 91.3%—a particularly significant increase given Base's exponential growth in users this year.
Similarly, Uniswap also saw growth on other major chains:
Relative DEX activity on Ethereum has increased by 27.72% compared to 2023.
Polygon saw a growth of 12.57% (the chain has historically had a broader distribution of DEX activity across its entire user base)
Excluding Uniswap's protocol upgrades, this may reflect a 'winner-takes-all' trend in the DeFi space, disproportionately favoring larger existing players with deeper liquidity and higher brand recognition.
Trader Joe's Leading Position on Avalanche
Despite Uniswap's rise in rankings, Trader Joe has still increased its lead on Avalanche:
Uniswap is now the second most popular DEX on Avalanche (barely making the top five in 2023).
Trader Joe remains the most popular DEX on Avalanche, accounting for 61.1% of all DEX activity.
Since 2023, its market share has grown by about 6%.
As the first major DEX natively built on Avalanche, Trader Joe has made numerous efforts to maintain and expand its leading position:
Launched Auto-Pools in April, facilitating LPs in automatically rebalancing positions and compounding rewards.
Enabled liquid staking for various Avalanche assets.
Actively expanding to new chains like Arbitrum and BNB Chain, demonstrating the viability of its unique liquidity book (LB) model.
DEX Usage Trend Analysis
The DEX preferences of super users and newly acquired users are converging, but the concentration of trading activity among super users is lower:
Unlike 2023, the top three DEXs for each observed chain are the same in terms of super users and newly acquired users.
Super user transaction activity is distributed more evenly across multiple DEXs.
This may reflect their familiarity with a broader range of DeFi protocols and a willingness to seek more favorable opportunities outside mainstream protocols like Uniswap.
Looking ahead to 2025: Opportunities and Challenges in Web3
On-chain data shows that Web3 user growth has continued to rise in 2024, with traditional chains and new competitors both facing pressure to differentiate themselves and provide attractive use cases for both new and existing users. Moreover, data clearly indicates that the rise in public chain native token prices does not necessarily drive more diversified on-chain activities, while emerging DeFi protocols face significant challenges when competing against established projects.
Here are some key trends to watch as we move into 2025:
Base as a Model for Ecosystem Expansion
Base achieved unprecedented user growth in 2024, setting a benchmark for new user acquisition and activation, which may serve as a reference for other new public chains seeking development momentum. Base's success in meme token trading and on-chain AI indicates that innovative application scenarios in emerging fields will continue to drive growth in 2025.
However, how to translate these activities into higher user quality through sustainable and diverse user engagement remains a key challenge.
Ethereum's growing user base presents an opportunity for L2s.
Despite the performance advantages of L2 networks, Ethereum's growing user base and liquidity advantages further reinforce its position as the foundational layer of the Web3 economy. Chains like Optimism may need to refine their strategies to remain competitive and persuade Ethereum's growing ordinary users to enter their on-chain ecosystems.
Success requires differentiation or economies of scale.
Uniswap's growing dominance indicates that most major DeFi markets exhibit a 'winner-takes-all' trend. Nevertheless, public chains like Avalanche and Polygon are proving that targeted innovations, such as Trader Joe's automatic pools or Polygon's GameFi programs, can carve out substantial market segments.
In 2025, protocols focusing on developing differentiated on-chain products that extend beyond 'basic' DeFi activities will be key to gaining more market attention.
With the influx of new users, each chain will shift its focus from quantity to quality.
Ecosystem builders who can find ways to incentivize users to engage in multiple activities beyond trading (such as governance and staking) will be more conducive to sustainable growth. As wallet growth accelerates, chains prioritizing high-quality engagement will see long-term ecosystem health development.
Summary
Overall, as the number of wallets across chains and overall transaction volumes increased this year, user quality declined. Given the recent historical highs in user activity and token valuations, this reflects that the industry has witnessed a surge of new users—who currently participate sporadically but are likely to be guided towards the various different use cases Web3 offers.
(Trends in User Quality Across Public Chains)
Key findings include:
Performance of Base
Base is one of the biggest success stories in user growth in 2024.
Thus, the chain's lower user quality rating does not negate Base's overall performance. Rather, it highlights that its vast new user base currently engages in a narrower range of on-chain activities—while also emphasizing the potential for guiding these users towards deeper, more diverse on-chain activities.
Ethereum's Performance
Ethereum experienced the largest decline in user quality before the launch of multiple SEC-approved ETH ETFs.
This suggests that institutional buying may trigger wallet growth, but without more incentives and convenient entry points (such as protocol governance), it may not necessarily lead to broader and deeper on-chain activities.
Performance of Blast
Blast's user base demonstrated broad and deep engagement at launch, reflecting the chain's capacity to incentivize various gamified on-chain activities.
Although Blast's user growth significantly declined in the fourth quarter of 2024, its remaining users remain active in multiple ways, indicating that the chain has the potential to surpass its initial hype and achieve greater success.
