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 not non-compulsory — 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 “health index” rating indicating the depth and high quality of general 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 immediately’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 technique to quantify not simply every part customers are doing, however how and why it issues. One promising strategy to attain that is to combination person behaviors into 5 core classes:
- Transaction Activity, starting from spot trades to sensible contract interactions.
- Token Accumulation within the medium-to-long-term, and different “investment” behaviors.
- DeFi Engagement for actions like staking, lending and liquidity provision.
- NFT Activity similar 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 strategy is to weigh and mix them utilizing a Bayesian mannequin to generate a single top-line “score.” Not like conventional scoring programs that depend on static thresholds or easy averages, this lets us incorporate each prior information (what we anticipate from an “average” pockets) and new proof (precise exercise noticed on-chain). These dynamic, multi-variate scores are a lot tougher to recreation and due to this fact extra prone to reveal correct, actionable insights.
What the information tells us about 2024
The above strategy gives a contemporary perspective on every chain’s person exercise by means of 2024. Let’s zoom in on a number of the extra stunning 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. Apparently, 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 forms of actions, for any given pockets. This means most Solana customers are at the moment engaged in a slim 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 yr’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 yr’s bullish developments didn’t spur broader ecosystem participation similar to DeFi exercise and protocol governance.
It’s additionally value noting that Axelar (the darkish blue line that begins at 2.5) had essentially the most energetic customers throughout the broadest vary of on-chain actions relative to its whole person base, in line with the information. Whereas Axelar is at the moment a lot smaller by TVL than the legacy chains dominating immediately’s headlines, that is an intriguing sign that warrants nearer inspection — and would have been missed if we have 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 develop into 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 completely different from a “4” on Axelar, given the variations in every chain’s baseline exercise. As such, these scores are most helpful when monitoring adjustments within the high quality of a sequence’s general person exercise over time, not cross-chain comparisons.
Predictions for 2025
With that stated, what does every chain’s person high quality monitor file inform us about subsequent yr?
For starters, it’s clear that Solana faces vital challenges and alternatives coming into 2025. The chain’s trajectory is dependent upon its potential to retain its large informal person base and increase their vary of on-chain interactions. Failure to take action might lead to a big hunch 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 potential to draw a concentrated person base engaged in numerous, sustained on-chain actions, somewhat than speculative surges. Now, Axelar’s problem might be upscaling its ecosystem with out diluting the standard of its person base. This will 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 energetic customers to its quicker, 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 important for the broader EVM ecosystem, however this trajectory could also be penalized by scoring programs that reward numerous on-chain engagement.
This dynamic underscores a problem for scoring programs: prioritizing wide-ranging person exercise can current an incomplete image when utilized to task-specific networks (or basic goal chains which are evolving into one thing extra specialised). In consequence, it’s essential 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 technique to outline, and drive, on-chain progress
Web3 has spent too lengthy chasing the fallacious metrics and failing to view the information in combination. In 2025, the winners might 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 your entire trade shift away from hype-driven narratives to data-backed methods that unlock the total potential of Web3 in 2025 and past.
