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2023 Marks a Surge in Crypto User Growth Across Major Chains. What 2024 Holds for Crypto? Analyzing Using Data from Flipside Crypto

Significant growth in crypto user base in 2023

The crypto space witnessed a remarkable surge in user engagement in 2023, with eight major blockchain networks acquiring a combined total of 62 million users. This significant growth, highlighted in a recent report by Flipside Crypto and shared with Cryptostake, reflects the dynamic expansion of the cryptocurrency sector. 

Flipside Crypto's analysis revealed: 

"Crypto recently has been fluctuating through extremes... but ultimately, the past many months have concluded on a high note, with user growth and activity surging across nearly every major chain." 

This uptick in user acquisition is especially noteworthy given the volatile nature of the crypto market over the last year.

Diverse trends across major blockchains

2023 was not just a year of user growth but also of diverse activity across various blockchains. Ethereum (ETH) and Polygon (MATIC) led the charge, each boasting around 15 million new users. Meanwhile, Bitcoin added 10.7 million users, reflecting its enduring appeal. 

However, other chains experienced more modest increases. A notable peak in user acquisition occurred in May 2023, coinciding with 5.8 million users executing their second on-chain transaction, as reported by Flipside. This surge was partly attributed to the fallout from Silicon Valley Bank's collapse, prompting a shift towards decentralized financial solutions. 

Each blockchain exhibited unique trends; for instance, Polygon set a January record with 2 million new users, while Avalanche (AVAX) saw a significant uptick in March, driven by the launch of a euro stablecoin. Moreover, Layer 2 networks like Arbitrum (ARB) and Optimism (OP) attracted substantial attention, likely buoyed by airdrops.

Predictions for 2024: DeFi and Layer 2 networks take the lead

Looking ahead to 2024, Flipside Crypto anticipates a shift in the crypto, with decentralized finance (DeFi) activities taking precedence over NFT trading. The report suggests an interest in decentralized exchange (DEX) trading and yield farming, alongside innovative applications like the Ethereum restaking protocol Eigenlayer. This trend underscores a growing inclination towards multi-chain interactions, although most users are expected to remain loyal to a single blockchain.

A key prediction for the coming year is the increased engagement with Layer 2 networks. While 2023 saw a minority of users exploring multi-chain environments, those who did showed a strong preference for Layer 2 solutions. Flipside anticipates that rising transaction fees during the next crypto bull run could lead to competitive cost reductions in Layer 2 networks, potentially sparking greater interest in their governance tokens. 

Furthermore, the emergence of new blockchain networks, designed to meet requirements and offering diverse use cases, is also on the horizon for 2024.