As revealed in Flipside’s “New EVM Users: Q1 Snapshot” report, Ethereum and Polygon maintain the lead on the latest Ethereum Virtual Machine (EVM) chain when it comes to attracting new users and increasing transaction volume.
As of March 27, there were 13.4 million new users on Ethereum and 12.3 million new users on Polygon, accounting for about 70% of the total number of new EVM users this year. By contrast, Arbitrum has added 4.7 million users since the start of 2024.
While Ethereum’s mainnet maintains its historical dominance, Layer-2 protocols are processing more data. Decentralized finance (defi) remains a major attraction for new users, with Ethereum leading the way with $12 billion in trading volume in the first quarter.
Moreover, the upward trend in DeFi activity contrasts with the intermittent and volatile fluctuations of previous years, indicating growing interest and participation in DeFi among newcomers to the blockchain space.
Arbitrum ranks second on the list, with $9.5 billion in revenue since the beginning of 2024. The Flipside report attributes this milestone to increased new user activity in Arbitrum’s DeFi space. In contrast, Polygon’s high number of new users is due to increased non-fungible token (NFT) activity.
With 243,000 new users as of March 16, Base has seen its new user base nearly eight-fold since January due to Coinbase’s efforts to simplify cryptocurrency for beginners.
“While this still leaves Base well behind the major EVM chains in terms of overall new user volume, it nonetheless represents impressive growth, especially as activity on the chain has weakened in the final months of 2023,” the report said.
The report points out that this surge coincides with Bitcoin hitting a new all-time high and marks the highest daily number of new users for any EVM chain this year.
Demonstrating its diversity, a significant portion of newly registered users interact with a variety of decentralized applications (dApps) on Ethereum. However, the analysis found that Ethereum had the least evenly distributed app adoption rate among the six chains analyzed.
“This difference applies to Base: the difference in new user volume between 1 and 2 apps on the chain was only 16.9% compared to ~300% on Ethereum.”
“The fact that Base is relatively new will likely reduce the first-mover advantage and resulting network effects of nascent protocols, hindering user consolidation around a single app.”
Token swaps and bridging apps are the most common entry points for new users to the EVM chain, with Uniswap and Orbiter Finance leading the way on Ethereum and Base respectively.
As further insights from the Flipside report reveal, NFT trading activity across the EVM chain paints a confusing picture.
New user NFT transactions on Ethereum and Base have steadily increased, while on Polygon they have declined significantly from initial peaks. These variations highlight the erratic nature of interest in NFTs and suggest that NFTs may not continue to dominate the market narrative in future cycles as they have in the past.
The report also highlighted the role of specific applications in directing user activity across various chains. For example, many new Optimism users have been attracted to Worldcoin (WLD), indicating long-term community interest in that particular project.
“This surprising statistic may reflect the lower DeFi and NFT trading volume on Optimism compared to other chains observed, as well as potential differences between Optimism’s ecosystem evolution compared to other EVM chains.”