2024 on-chain user report: Base leads Ethereum in new entrants, and the DeFi market presents a "winner takes all"

Original text: Flipside

Compiled by: Yuliya, PANews

With the rapid development of the Web3 ecosystem, 2024 will become a milestone year for the growth of blockchain users. Major blockchain networks have reached record highs in terms of the number of new users and the scale of super users. Emerging public chains such as Base have redefined the possibilities for user growth, while Ethereum and its L2 network have demonstrated the impact of mature ecosystems on continuous growth. Adaptability to evolving user needs.

However, a deeper analysis of on-chain data shows significant differences in the quality of user growth. This phenomenon highlights the need to not only pay attention to quantitative indicators when evaluating on-chain activities, but also to pay attention to the quality dimension of user participation. This report is based on Flipside’s real-time data of on-chain encrypted users in 2024. It comprehensively evaluates the annual cryptocurrency ecological development status by combining traditional performance indicators with multi-dimensional operability indicators, and provides new insights into the health assessment of on-chain users in 2025. analysis framework.

TL;DR

Beneath the veneer of record user growth lies a deeper challenge: how to build ecosystems that create meaningful, lasting engagement rather than flash-in-the-pan speculation. In short, most blockchains are still in their infancy when it comes to converting ordinary users into high-value contributors.

New user status:

• Base set a record of 19.4 million new users in October 2024, of which Base contributed 13.7 million, which is almost 8 times that of the second-place Polygon.
• Although the price of Bitcoin exceeded US$100,000 and hit a record high, its average monthly new users were only 935,900, indicating that speculation by existing users is more common than significant new users entering the market.
• Ethereum added an average of 1.56 million new users every month, surpassing Arbitrum and Optimism, with a month-on-month growth of 33.4% in March. It is worth noting that Arbitrum reached a peak of 3.3 million new users in a single month in May.

Super user performance:

• Base attracted 15.1 million wallets that performed 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 Arbitrum and Optimism combined (6.2 million and 1.8 million respectively), highlighting Ethereum’s advantages in liquidity and convenience.
• Polygon will add 1.5 million super users in 2024 and record 867.7 million super user transactions throughout the year, highlighting its success in application scenarios beyond DeFi.

DEX usage:

• Uniswap has expanded its dominance on major public chains, accounting for 91.3% of new user DEX activity on Base, and its market share on Ethereum increased by 27.72% compared to 2023.
• Despite Uniswap’s continued expansion, Trader Joe’s maintained its lead on Avalanche with a market share of 61.1%, up 6.1% from 2023.
• Different from 2023, the top three DEX rankings of new users and super users observed on each chain remain consistent.

Add new user

In October 2024, the number of new users reached a new monthly high of 19.4 million that year.

This year’s on-chain user growth is mainly led by Base, which contributed 13.7 million new users this month – almost 8 times that of second-place Polygon. Overall, this has been an impressive year for on-chain user growth industry-wide, with new users showing a continued upward trend throughout 2024, with only a small correction in August.

*Note: "New users" here are defined as users who have conducted at least 2 transactions on a certain chain, and their second transaction occurred in 2024.

This continued growth may be influenced by the cryptocurrency’s increased institutional recognition, reflected in the announcement of a series of BTC and ETH ETFs earlier this year.

Other exciting developments in the first half of 2024 may also be fueling this optimism, such as Grayscale’s inclusion of multiple new cryptocurrencies as “assets under consideration” and the September 2024 Federal Open Market Committee ( At the FOMC meeting, the Federal Reserve cut U.S. interest rates by 50 basis points - the first rate cut in four years.

Base performance

Base got off to a slow start in 2024, but its number of new monthly users has surged 56-fold since January.

Base only had 244,700 new users in January, but experienced steady and significant growth throughout the year.

By the time it reached its peak in November, the chain's monthly number of new users had increased 56 times compared to January, with an average of 4.7 million new users per month in 2024.

The chain has benefited greatly from Coinbase’s large user base, which collectively controls approximately $130 billion in assets.

Popular DeFi protocols like Aerodrome may also be attracting users from other EVM chains, while Base is successfully attracting attention in hot areas such as meme currency trading and on-chain AI with new initiatives such as Based Agents.

Bitcoin performance

Despite its record high price, Bitcoin has not attracted a large number of new users this year.

The number of new Bitcoin users has remained relatively flat in 2024, despite significant appreciation in the value of BTC. Overall, Bitcoin has averaged 935,900 new users per month this year, ranking third from the bottom among the seven traditional chains observed in this report.

This suggests that Bitcoin price increases are primarily driven by enthusiasm and speculation among its existing user base, while BTC price growth has been mixedly effective at attracting new users.

In March 2024, BTC’s first major price surge coincided with a 19.2% month-on-month increase in new users, but in November — when BTC reached the long-awaited $100,000 milestone amid continued price gains — new users actually A month-on-month decrease of 28.5%.

Ethereum and Layer 2 performance

Ethereum’s new users overall outpaced its traditional L2, but Arbitrum also saw impressive single-month growth.

In 2024, Ethereum's growth exceeded its two major L2 chains, with an average of 1.56 million new users per month, compared to Arbitrum's 1.2 million and Optimism's 348,800. Excluding December, Ethereum had only four months of month-on-month declines, and reached a peak of 1.9 million new users in a single month in March - a month-on-month increase of 33.4%.

Both Arbitrum and Optimism started the year with considerable momentum, reaching peak new user growth in 2024 in April and May respectively, after which user growth declined throughout the rest of the year.

Notably, Arbitrum’s 3.3 million new users in May exceeded any single-month peak for Ethereum in 2024. Against this backdrop, Arbitrum's new user growth continued to outpace Optimism's throughout the year, driven by the success of its Arbitrum One program and the expansion of its GameFi and SocialFi integrations. With 169 builder grants approved in the first half of 2024, and many behind-the-scenes developments, it remains to be seen whether the chain can regain its position as the world's leading EVM L2 chain.

Performance of new release chains in 2024

Among chains launching in 2024, Aleo reached the highest average new user growth, while Blast faded after setting a single-month record.

As far as newly launched chains are concerned, Aleo achieved the highest new user growth in the months when the chain went online, with an average of 175,200 new users per month, while Blast and Aleo had 134,900 and 90,700 users respectively. This can be attributed to Blast’s sharp decline in user acquisition since July, as well as Sei’s slow start, which did not reach its peak month-on-month user peak of 324,500 users until October despite its mainnet launch long ago.

Whether these chains will regain growth momentum in 2025 is unclear — especially considering Base experienced a similar post-launch slump before surging in 2024. Of the four new chains tracked, Lava’s performance so far has been overshadowed by its competitors, and while Blast set a record for the highest single-month new user growth of any newly released chain in June, it still has a lot to catch up on.

superuser

Base performance

As of December 2024, Base has the largest number of DeFi-related super users, with 15.1 million wallets executing 100 or more transactions.

In addition to acquiring the most new users, Base also attracted the largest number of DeFi-related super users, with 38.4% more users executing 100 or more transactions than second-place Ethereum. This is followed by Ethereum with 10.7 million new super users and Polygon with 7 million.

*Note: The "super user" here is defined as a user who has conducted at least 100 transactions on a certain chain, regardless of the time when the relevant wallet was created or when the last transaction occurred.

Given Base's explosive growth this year, its impressive number of power users may not come as a surprise. This success is likely due to Base surpassing many traditional chains in several hot areas this year, including but not limited to Meme coins and NFT transactions.

On the other hand, Avalanche and Blast have similar numbers of super users this year, averaging about 1.3 million, while Optimism performed slightly better, with 1.7 million users making at least 100 DeFi transactions.

Performance of Polygon

Polygon added the most new super users in 2024, and its non-DeFi related super user activity continues to outperform.

Polygon has attracted 1.5 million new power users so far in 2024—nearly twice as many as second-place Base.

Polygon’s super user activity also exceeds that of all other observed chains, with average monthly super user transactions reaching 867.7 million this year. In addition to Base’s impressive 786.3 million super user transactions, Arbitrum has also performed strongly in 2024 so far, reaching 365.3 million super user transactions.

Polygon’s stellar performance is a continuation of the chain’s years of dominance in superuser activity starting in 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 amount of superuser activity among all observed chains, Polygon ranks third in terms of number of DeFi-related superuser wallets. This shows that the chain has successfully incentivized high transaction volumes through GameFi and other alternative use cases.

Ethereum’s performance

The number of DeFi-related super users on Ethereum exceeds that of Arbitrum and Optimism combined.

So far in 2024, Ethereum has 10.9 million active super users in the DeFi field, second only to Base. This represents a larger DeFi super user base than Arbitrum and Optimism combined (6.2 million and 1.8 million respectively).

Considering that EVM L2 is generally faster and cheaper, this may indicate that many users still find bridging assets across chains to be too inconvenient or risky, or that they value the advantages that come with Ethereum’s deeper liquidity and dominant market position.

Regardless, it’s clear that Ethereum’s L2s need to find more ways to attract activity than just emphasizing their on-chain performance advantages over the Ethereum mainnet.

DEX use

Uniswap’s market dominance

Uniswap’s market share on all major chains has increased, further strengthening its dominance in the DEX field.

Uniswap ranks first on all observed chains except Avalanche and Blast. Its biggest growth has occurred on the Base chain, with Uniswap's user base growing from 36.8% of total DEX activity to 91.3% - an increase that is particularly significant considering Base's exponential user growth this year.

Likewise, Uniswap has seen growth on other major chains:

• Relative DEX activity on Ethereum increased by 27.72% over 2023
• 12.57% growth on Polygon (the chain has historically had more widely distributed DEX activity across its user base)

Ignoring Uniswap’s protocol upgrade, this may reflect a “winner-take-all” trend in the DeFi space that disproportionately favors large existing players with deeper liquidity and greater brand recognition.

Trader Joe's Lead on Avalanche

Despite Uniswap’s rise in the rankings, Trader Joe’s increases its lead over Avalanche:

• Uniswap is now the second most popular DEX on Avalanche (barely in the top five in 2023)
• Trader Joe remains the most popular DEX on Avalanche, accounting for 61.1% of all DEX activity
• Market share increased by approximately 6% since 2023

As the first major DEX built natively on Avalanche, Trader Joe has made many efforts to maintain and expand its leadership position:

• Launched Auto-Pools in April to facilitate LPs’ automatic rebalancing of positions and compound interest rewards
• Liquidity staking enabled for various Avalanche assets
• Active expansion into new chains such as Arbitrum and BNB Chain, proving the viability of its unique Liquidity Ledger (LB) model

DEX usage trend analysis

The DEX preferences of super users and newly acquired users are converging, but trading activity is less concentrated among super users :

• Unlike in 2023, the top three used DEXs for each observed chain are the same among super users and newly acquired users
• Super users’ trading activity is more evenly distributed across multiple DEXs
• This may reflect their familiarity with a wider range of DeFi protocols and a willingness to seek more favorable opportunities outside of mainstream protocols such as Uniswap

Looking to 2025: Opportunities and Challenges of Web3

On-chain data shows that Web3 user growth will continue to rise in 2024. Both traditional chains and new competitors are facing pressure to differentiate themselves and provide attractive usage scenarios for new and old users. In addition, the data clearly shows that the increase in the price of public chain native tokens does not necessarily drive more diverse on-chain activities, and emerging DeFi protocols also encounter difficulties when challenging existing projects that have established advantages.

Here are some key trends to watch heading into 2025:

• Base as a model for ecosystem expansion

Base achieved unprecedented user growth in 2024, setting a benchmark for new user introduction and activation, which may serve as a reference for other new public chains trying to gain momentum. Base’s success in meme currency trading and on-chain AI demonstrates that innovative application scenarios in emerging areas will continue to drive growth in 2025.

However, how to translate these activities into higher user quality through sustained and diverse user engagement remains a key challenge.

• Ethereum’s growing user base is an opportunity for L2

Despite the performance advantages of the L2 network, Ethereum’s growing user base and liquidity advantages further strengthen its position as the base layer of the Web3 economy. Chains like Optimism may improve their strategies to stay competitive and convince Ethereum’s growing number of regular users to enter its on-chain ecosystem.

• Success requires differentiation or economies of scale

Uniswap’s growing dominance points to a “winner-takes-all” trend in most major DeFi markets. Nonetheless, public chains like Avalanche and Polygon are proving that targeted innovations like Trader Joe’s automated pools or Polygon’s GameFi program can carve out sizable market segments.

In 2025, protocols that focus on developing differentiated on-chain products beyond “basic” DeFi activities will be key to gaining more market attention.

• With the entry of new users, each chain will shift from focusing on quantity to quality.

Ecosystem builders who can find ways to incentivize continued and balanced user participation in multiple activities beyond trading, such as governance and staking, will be better positioned for sustainable growth. As wallet growth accelerates, chains that prioritize high-quality participation will see long-term ecosystem health.

Summarize

Overall, as the number of wallets on each chain has grown this year and overall transaction volume has increased, user quality has declined. Given the recent record highs in user activity and token valuations, this reflects an influx of new users into the industry – users who are currently only participating occasionally, but who are likely to be directed towards the various different use cases that Web3 has to offer.

(User quality trends of each public chain)

Key findings include:

Base performance

• Base is one of the biggest success stories of 2024 in terms of user growth.
• Therefore, the chain’s lower user quality score is not a negative on Base’s overall performance. Rather, it highlights the narrow range of on-chain activities in which its large new user base is currently engaged — while also underscoring the upside potential of steering these users toward deeper, more faceted on-chain activities.

Ethereum’s performance

• Ethereum saw the biggest drop in user quality ahead of the launch of multiple SEC-approved ETH ETFs.
• This suggests that institutional buying may trigger wallet growth, but without more incentives and easy access (such as protocol governance), it will not necessarily lead to broader and deeper on-chain activity.

Performance of Blast

• Blast’s user base demonstrated broad and deep engagement at launch, reflecting the chain’s ability to incentivize a variety of gamified on-chain activities.
• While Blast's user growth declined significantly in the fourth quarter of 2024, its remaining users remain active on multiple fronts, indicating that the chain has the potential to transcend its initial popularity and achieve greater things.