ethereum and Polygon maintain their lead over new ethereum virtual machine (EVM) chains in attracting new users and increasing trading volumes, as revealed by Flipside's “New EVM Users: Q1 Snapshot” report. report.
As of March 27, ethereum had 13.4 million new users, while Polygon had 12.3 million, representing about 70% of the total number of new EVM users this year. By contrast, Arbitrum has added 4.7 million users since the beginning of 2024.
While the ethereum mainnet maintains its historical dominance, Layer 2 protocols are processing more data. Decentralized finance (defi) remains the key attraction for new users, with ethereum leading trading volume with $12 billion in the first quarter.
Furthermore, the upward trend in defi activity contrasted with the intermittent and volatile swings of the previous year, indicating growing interest and participation in DeFi among beginners in the blockchain space.
Arbitrum came in second on the list, earning $9.5 billion since the start of 2024. The Flipside report attributes this milestone to increased new user activity in the Arbitrum defi space. In contrast, Polygon's high number of new users is attributed to an increase in non-fungible token (nft) activity.
With a record 243,000 new users as of March 16, Base has nearly octupled its new user base since January, due to Coinbase's efforts to simplify cryptocurrencies for beginners.
“While this still places Base well behind the major EVM chains in terms of overall new user volume, it represents impressive growth, particularly as chain activity declined during the final months of 2023,” the report states.
The report notes that the surge coincides with bitcoin reaching a new all-time high and represents the highest single-day new user count among EVM chains this year.
Demonstrating diversity, a significant portion of newly registered users interact with a variety of decentralized applications (dApps) on ethereum. However, the analysis found that ethereum did not have application adoption distributed more evenly across the six chains analyzed.
“This distinction applies to Base, where the difference in new user volume between apps 1 and 2 on the chain was only 16.9%, compared to ~300% for ethereum.”
“The fact that Base is relatively new likely reduced the advantage of early protocols and subsequent network effects, preventing consolidation of users around a single application.”
Token swaps and bridge applications are the most typical entry points for new users on EVM chains, with Uniswap and Orbiter Finance leading the way on ethereum and Base, respectively.
As additional information revealed in the Flipside report, nft trading activity on EVM chains painted a confusing picture.
New user nft trading on ethereum and Base increased steadily, while on Polygon it decreased significantly from its initial peaks; This variation highlights the erratic nature of interest in nfts and suggests that they may not continue to dominate the market narrative in the next cycle as they have in the past.
Additionally, the report also emphasized the role of specific apps in directing user activity across multiple chains. For example, many new Optimism users were attracted to Worldcoin (WLD), indicating long-term community interest in certain projects:
“This notable statistic, coupled with Optimism's low DeFi and nft trading volume relative to other observed chains, may reflect a potential divergence between the evolution of the Optimism ecosystem relative to other EVM chains.”
