Web3 is drowning in metrics, most of which paint an unclear image. Transaction volumes, token costs and flashy headlines typically masks what actually issues: the standard of person engagement and the potential for natural, exponential progress. Because the trade strikes past the hype, dependable, data-driven indicators of success are now not optionally available — they’re important.
Right here’s the excellent news: the instruments to chop by means of the noise exist already. By combining a number of on-chain metrics right into a single “well being index” rating indicating the depth and high quality of total person engagement, we are able to establish which chains are really thriving and poised for long-term progress. With 2024 coming to an in depth, let’s dig into what these indicators reveal about right now’s main chains, and what we are able to anticipate in 2025.
Assessing person high quality utilizing aggregated, not remoted, knowledge
When making a sustainable on-chain ecosystem, it doesn’t make sense to optimize any single person motion. What’s wanted is context — a strategy to quantify not simply every little thing customers are doing, however how and why it issues. One promising method to attain that is to mixture person behaviors into 5 core classes:
- Transaction Exercise, starting from spot trades to good contract interactions.
- Token Accumulation within the medium-to-long-term, and different “funding” behaviors.
- DeFi Engagement for actions like staking, lending and liquidity provision.
- NFT Exercise corresponding to minting, buying and selling and utility-driven interactions.
- Governance Participation to quantify DAO or protocol governance contributions.
Crucially, these metrics shouldn’t be handled equally. A greater method is to weigh and mix them utilizing a Bayesian mannequin to generate a single top-line “rating.” In contrast to conventional scoring techniques that depend on static thresholds or easy averages, this lets us incorporate each prior data (what we anticipate from an “common” pockets) and new proof (precise exercise noticed on-chain). These dynamic, multi-variate scores are a lot more durable to recreation and due to this fact extra more likely to reveal correct, actionable insights.
What the information tells us about 2024
The above method supplies a contemporary perspective on every chain’s person exercise by means of 2024. Let’s zoom in on a number of the extra shocking findings.
Solana (the highest gentle blue line that peaks at ~2.75) attracted an enormous share of high-quality customers between February and mid-March, however engagement high quality has fallen since. Curiously, this downslide coincided with SOL’s first worth and buying and selling quantity spike of 2024, and has continued by means of the present memecoin mania. Repetitive actions have diminishing returns when assessed utilizing a Bayesian mannequin, that means a number of token swaps yield smaller rating enhancements than engagement throughout a number of sorts of actions, for any given pockets. This means most Solana customers are presently engaged in a slender vary of on-chain actions that aren’t contributing to Solana’s multi-sector progress.
As for Ethereum supporters (the underside orange line that begins at simply above 1) who anticipated this 12 months’s ETH ETFs to be a game-changer, the numbers paint a special image. Ethereum’s low and secure person rating by means of H1 2024 means that this 12 months’s bullish developments didn’t spur broader ecosystem participation corresponding to DeFi exercise and protocol governance.
It’s additionally price noting that Axelar (the darkish blue line that begins at 2.5) had probably the most lively customers throughout the broadest vary of on-chain actions relative to its complete person base, in accordance with the information. Whereas Axelar is presently a lot smaller by TVL than the legacy chains dominating right now’s headlines, that is an intriguing sign that warrants nearer inspection — and would have been missed if we had been taking a look at market cap or buying and selling quantity alone.
The takeaway right here isn’t that Solana is doomed and Axelar will inevitably turn out to be the world’s largest chain. There may be restricted worth in evaluating some of these scores throughout chains, since every rating is proportional to the person high quality of its corresponding chain. In different phrases, a Solana person with a rating of “4” could also be very totally different from a “4” on Axelar, given the variations in every chain’s baseline exercise. As such, these scores are most helpful when monitoring modifications within the high quality of a series’s total person exercise over time, not cross-chain comparisons.
Predictions for 2025
With that mentioned, what does every chain’s person high quality observe document inform us about subsequent 12 months?
For starters, it’s clear that Solana faces important challenges and alternatives getting into 2025. The chain’s trajectory is dependent upon its capability to retain its large informal person base and increase their vary of on-chain interactions. Failure to take action may end in a major stoop as soon as memecoins cool off — though knowledge from early 2024 suggests the chain has a big contingent of high quality customers that may endure no matter what occurs short-term.
2024 demonstrated Axelar’s capability to draw a concentrated person base engaged in various, sustained on-chain actions, quite than speculative surges. Now, Axelar’s problem can be upscaling its ecosystem with out diluting the standard of its person base. This will likely contain prioritizing high-profile partnerships to unlock new audiences whereas creating extra newbie-friendly onramps throughout its dApp ecosystem.
Ethereum’s fragmentation has shifted many lively customers to its sooner, cheaper L2 ecosystem, and so we may even see mainnet exercise more and more consolidate round core options protocol staking and governance. These actions are crucial for the broader EVM ecosystem, however this trajectory could also be penalized by scoring techniques that reward various on-chain engagement.
This dynamic underscores a problem for scoring techniques: prioritizing wide-ranging person exercise can current an incomplete image when utilized to task-specific networks (or basic function chains which might be evolving into one thing extra specialised). Because of this, it’s vital to obviously outline what success means for no matter chain is being evaluated and use a scoring system that captures the corresponding person actions.
A greater strategy to outline, and drive, on-chain progress
Web3 has spent too lengthy chasing the flawed metrics and failing to view the information in mixture. In 2025, the winners can be those that discover multivariate methods to measure — and act on — what issues most: person high quality.
By incorporating new scoring strategies into their dashboards, on-chain intelligence platforms can present extra significant insights to buyers and trade observers. On the identical time, Web3 builders can use these scores to make clear prime priorities and drive person engagement and worth creation. Finally, it will assist the whole trade shift away from hype-driven narratives to data-backed methods that unlock the total potential of Web3 in 2025 and past.
