This network had as many users as Ethereum in 2023: Flipside Data

According to blockchain analytics firm Flipside, Polygon, a layer-2 blockchain network, is on track to match Ethereum's user base by 2023.

Polygon gained 15.24 million users that year, compared to Ethereum's 15.4 million and a difference of around 160,000 wallets.

Polygon sponsored user acquisition in the first half of 2023

Flipside defines a “purchased” user as someone who has made at least two transactions on a particular blockchain, with at least one occurring in 2023. In the first half of 2023, Polygon led the user acquisition race, but was later overtaken by Ethereum. It leads in the last part of the year.

Is the bull really here? How do we say it?

Data.

It's not just the mood that has changed lately. According to the data, user behavior is changing – and with it, the crypto markets.

We cover it all in the Onchain Crypto User Report 🧵📊👇 pic.twitter.com/IsclNOZhJk

— Flipside 📊 (@flipsidecrypto) January 25, 2024

In January, Polygon hit an impressive milestone with 2.8 million users, which is more than 40% of the total for 2023, Flipside reported. While Ethereum maintained its lead throughout the year, Bitcoin took third place with 10.65 million users. Solana and Arbitrum rounded out the top five.

Aggregate data from the eight monitored blockchains, including Optimism (OP), Avalanche (AVAX) and Base (BASE), showed a total of 62 million active users. The flipside was that consumer purchases peaked in May but gradually declined thereafter.

Specifically, Flipside pointed to a connection between the surge in users since March and the collapse of Silicon Valley Bank. The incident could erode trust in central authorities, leading to a shift to decentralized protection options.

The base, which launched in August, got off to a strong start, but in the final months of 2023, user volume declined. Flipside speculated that the slowdown in user growth for Base could be due to renewed enthusiasm for established chains at the end of the year.

Flipside predicts the trends of 2024

Flipside predicts a decline in NFT-related activities and a change in decentralized finance (DeFi) activities in 2023. Looking forward to the upcoming cycle, Flipside suggests that the popularity of NFT trading will continue to dominate the DeFi activities. .

In particular, he highlighted decentralized exchange (DEX) trading and commodity agriculture as key applications, and predicted the arrival of new DeFi applications such as Ethereum's reshoring protocol Eigenlayer.

According to Flipside, by 2024 user behavior is expected to increase its connection to multiple blockchain networks, although most users will continue to engage with a single chain.

The forecast emphasizes the growing trend of user connectivity with Layer 2 networks over the next year.

Although a minority in 2023, users with more than one blockchain were primarily connected to Layer 2s. Flipside speculates that during the next crypto market bull run, increased transaction fees will cause Layer 2 networks to competitively lower their costs to end users, which will increase demand for related governance tokens.