The cryptocurrency sector has seen a remarkable resurgence in 2024, notably marked by skyrocketing coin valuations. However, this increased market activity hasn’t translated into a parallel growth in user engagement across many established blockchain networks. Insights from the 2024 on-chain user report by Flipside inform us that networks must enhance both the volume and the quality of on-chain activities to attract meaningful user participation and convert them into valued contributors.
One of the standout performers of the year has been Base, a layer-2 network launched by Coinbase, which managed to attract a tremendous user base. In stark contrast, well-established networks, including Bitcoin and several Ethereum-based layer-2 solutions, struggled with user acquisition despite market optimism.
Flipside’s report indicates that Base experienced an astonishing 56-fold increase in monthly user acquisition from a modest commencement in January. By October 2024, new user registrations in the crypto market reached 19.4 million, with Base accounting for an impressive 13.7 million users alone—nearly eight times the number of users joining Polygon, the next most successful chain in this metric.
Furthermore, Base cultivated a thriving ecosystem of super users: 15.1 million individuals engaged in over 100 decentralized finance (DeFi) transactions, marking a 38.4% growth over Ethereum’s 10.7 million super users. Such figures illustrate that a new paradigm is emerging in the blockchain space, where innovative platforms can rapidly scale user engagement when they effectively meet community needs.
Ethereum also maintained a solid trajectory, averaging approximately 1.56 million new users each month. This resilience overshadowed the performance of its layer-2 counterparts, Arbitrum and Optimism, and established Ethereum as a powerhouse in capturing DeFi-related activity. With 10.9 million super users, Ethereum not only solidified its position but comfortably surpassed the combined efforts of its layer-2 partners, which amassed only 6.2 million and 1.8 million users, respectively.
Notably, institutional acceptance is an undeniable driving force behind Ethereum’s continued growth, fueled in part by asset management giants like Grayscale, which has enriched its portfolio with potential new cryptocurrencies.
Despite Bitcoin’s historical rally surpassing the $100,000 mark and the positive sentiment surrounding the launch of spot Bitcoin exchange-traded funds (ETFs) in the U.S., Bitcoin’s user growth remained relatively placid with an increase of 935,900 each month. Observations reveal a significant uptick of 19.2% during its rally in March, yet the momentum faded quickly, leading to a staggering 28.5% decline in user acquisition following the U.S. elections. This trend raises concerns about the inherent speculative nature of existing Bitcoin users versus attracting fresh participants to the network.
On a brighter note, decentralized exchanges like Uniswap have continued to maintain a strong foothold within major blockchain networks, particularly on Base and Ethereum. Their sustained growth speaks volumes about the shifting user preferences towards decentralized finance solutions, emphasizing the need for networks to reevaluate and innovate in their approaches to foster engagement and enhance their user base.
While the crypto industry as a whole has rebounded impressively in 2024, the nuanced tale of individual chain performances highlights a critical need for strategic developments in user engagement and experience to secure a thriving future in this competitive landscape.
