Polygon, a layer 2 scaling network, will nearly match ethereum's user base in 2023, blockchain analytics firm Flipside reported.
Polygon acquired 15.24 million users that year, closing in on ethereum's 15.4 million, a difference of around 160,000 wallets.
Polygon led user acquisition in H1 2023
Flipside defines an “acquired” user as someone who made at least two transactions on a specific blockchain, with at least one of them occurring in 2023. For the first half of 2023, Polygon led the user acquisition race, but then It was surpassed by ethereum, maintaining its lead during the latter part of the year.
Is the bull really here? How can we know?
Data.
The sentiment isn't the only thing that's 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
– The other side (@flipsidecrypto) January 25, 2024
In January, Polygon achieved a notable milestone with 2.8 million acquired users, making up more than 40% of the total number by 2023, according to Flipside. ethereum secured the lead throughout the year, while bitcoin took third position with 10.65 million users acquired. Solana and Arbitrum completed the top five positions in the ranking.
Aggregated data from all eight tracked blockchains, including Optimism (OP), Avalanche (AVAX), and Base (BASE), revealed a total of 62 million acquired users. Flipside noted that user acquisition peaked in May, but then gradually declined.
In particular, Flipside suggested a connection between the increase in users acquired starting in March and the collapse of Silicon Valley Bank. The event potentially eroded trust in centralized entities, prompting a shift toward decentralized custody alternatives.
Base, launched in August, also got off to a strong start, but its user volume declined in the final months of 2023. Flipside speculated that Base's slowing user growth could be attributed to renewed enthusiasm for more established chains towards the end of the year. .
Flipside predicts trends for 2024
In its predictions on future trends, Flipside noted a decline in nft-related activities and a shift toward decentralized finance (DeFi) activities during 2023. Anticipating the next cycle, Flipside suggested that DeFi activities would continue to dominate, surpassing the prominence of the nft trading. .
Specifically, he highlighted decentralized exchange (DEX) trading and yield farming as predominant ongoing applications, while forecasting the emergence of new DeFi applications such as the ethereum recovery protocol Eigenlayer.
According to Flipside, user behavior in 2024 is expected to involve increased interaction with multiple blockchain networks, although most users will likely be limited to interacting with a single chain.
The prediction further emphasized a growing trend of user interaction with Layer 2 networks over the next year.
Despite being a minority in 2023, users with more than one blockchain predominantly interacted with Layer 2. Flipside speculated that rising transaction fees during the next crypto market bull run could lead to Layer networks 2 to reduce their costs for end users competitively, which could generate greater interest in the associated governance tokens.
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