Ethereum, Polygon Dominate EVM New User, Trading Volume Growth in Q1 2024

Despite emerging Ethereum Virtual Machine (EVM) chains, Ethereum and Polygon continue to lead in attracting new users and trading volumes, according to Flipside's "New EVM Users: Q1 Snapshot" report. Ethereum had 13.4 million new users and Polygon had 12.3 million, accounting for about 70% of all new EVM users in Q1 2024, while Arbitrum added 4.7 million. This growth is primarily driven by the dominance of decentralized finance (DeFi), with Ethereum leading in trading volume at $12 billion and Arbitrum at $9.5 billion. Additionally, user activity in EVM chains varies, with Base showing significant growth and a more evenly distributed app adoption compared to Ethereum.

Ethereum and Polygon Dominate New User Growth and Trading Volumes in Q1 2024

In a comprehensive analysis of Ethereum Virtual Machine (EVM) chains, Flipside's "New EVM Users: Q1 Snapshot" report reveals that Ethereum and Polygon continue to lead the pack, attracting the majority of new users and driving significant trading volumes.

As of March 27, Ethereum boasted an impressive 13.4 million new users, while Polygon followed closely behind with 12.3 million. Together, these two giants accounted for approximately 70% of all new EVM users during the first quarter of 2024.

In contrast, Arbitrum, a rising star in the EVM ecosystem, has added a respectable 4.7 million users since the beginning of the year.

Layer-2 Protocols Gaining Momentum

While Ethereum's mainnet maintains its dominance, Layer-2 protocols are steadily gaining ground and processing a growing share of data. These protocols offer faster and cheaper transactions, making them increasingly attractive to users.

Decentralized finance (DeFi) remains the primary catalyst for attracting new users to EVM chains. Ethereum reigns supreme in this domain, capturing $12 billion in trading volume during Q1.

Arbitrum and Polygon Expand DeFi Footprint

Arbitrum ranks second in terms of trading volume, accumulating $9.5 billion since the start of the year. The Flipside report attributes this growth to increased user activity in the platform's DeFi space.

Polygon, on the other hand, has witnessed a surge in non-fungible token (NFT) activity, fueling its high new user numbers.

Base Emerges as a New Player

Base, a new EVM chain from Coinbase, has made a significant impact in a short period of time. As of March 16, it has attracted a remarkable 243,000 new users, nearly octupling its user base since January.

The report highlights Base's efforts to simplify cryptocurrency for novice users as a key factor in its rapid growth.

Diversity in dApp Usage

The analysis reveals a diverse landscape of decentralized applications (dApps) used by new users across EVM chains. Ethereum stands out with a large number of dApps attracting significant user engagement.

However, Base has the highest level of even distribution in app adoption, with a difference of only 16.9% in new user volume between its top and second-most popular apps.

Token Swaps and Bridging Apps Facilitate User Onboarding

Token swaps and bridging apps serve as the primary entry points for new users on EVM chains. Uniswap leads the way on Ethereum, while Orbiter Finance plays a similar role on Base.

NFT Trading Patterns Indicate Volatility

NFT trading activity across EVM chains exhibits a mixed picture. While new users on Ethereum and Base are increasingly engaging in NFT transactions, activity on Polygon has experienced a significant decline from its previous highs.

This volatility underscores the fluctuating nature of interest in NFTs and suggests that they may not maintain their dominance in the market narrative as they have in the past.

Specific Applications Drive User Engagement

The report also highlights the influence of specific applications in shaping user activity on different chains. For instance, a large number of new Optimism users have been drawn to Worldcoin (WLD), hinting at a long-term community interest in certain projects.

Divergence in Ecosystem Evolution

Optimism's low DeFi and NFT trading volume compared to other observed chains suggests a potential divergence in its ecosystem evolution relative to other EVM chains.

Growth Prospects for EVM Chains

The report concludes by emphasizing the ongoing evolution of EVM chains and the potential for continued growth in the future. With ongoing improvements in scalability, reduced transaction fees, and the emergence of new and innovative applications, the EVM ecosystem is well-positioned to attract even more users and drive further adoption of blockchain technology.