We need more on-chain crypto users

TLDR: Many crypto people think the bear market is caused by the lack of new crypto users. After investigating the historical data, i surprisingly find the increasing rate of new unique ETH address is not slowing down in the bear market. Instead, the daily on-chain active addresses stops growing after the end of 2021. Therefore, I think “new crypto users number” is too general to be used to set a goal. It’s crucial to help more off-chain crypto users turn into on-chain users.

Tons of new users are still entering crypto space right now

Lots of crypto researchers think the lack of new crypto users causes the bear market. And the key to the next bull run is to onboard more new users. However, as statistics goes, the increasing rate of new unique wallet addresses doesn’t increase rapidly in the last bull run and doesn’t slowdown in the current bear market. Crypto is still attracting around 100000 new users every day. 

ETH Total Unique Addresses
ETH Total Unique Addresses

Active on-chain users drive the bull cycle

So what happened in the last bull cycle? If we look at the daily active ETH addresses chart instead, we can find that there is huge increase of addresses number from the Jan of 2020 to the may of 2021 when the ETH price goes from 150 dollars to 3700 dollars. And the daily on-chain active addresses stops growing after the end of 2021.Therefore, i think the active crypto addresses number is a better metric to predict the next bull cycle.

ETH Active Addresses
ETH Active Addresses

On-chain users and Off-chain users

When we say “onboard next billions of crypto users” on twitter, we should separate general crypto users into on-chain crypto users and off-chain crypto users. Off-chain crypto users refer to those users who have/trade crypto in CEX or know a bit about crypto but never have any on-chain transactions. On-chain crypto users can be defined as users who actively do on-chain transactions.

Right now, CEX like Binance/Coinbase, web2 social products like Reddit and some crypto games like Digidaigaku does a good job at onboarding off-chain crypto users. And many innovative on-chain protocols like GMX, Uniswap and Blur uses some native token incentives to help existing on-chain users engage more with blockchain.

Off-chain and On-chain
Off-chain and On-chain

Closing the gap

However, i find there is still a large gap between the off-chain crypto users and first-time on-chain users. The total new unique ETH address increased 34M in the past year. But the Daily active address decreased from 500k to 400k. Lots of ppl created their wallet and then left. So i think it’s crucial to solve this problem to help more and more off-chain crypto users become on-chain crypto users. That’s why I’m exploring  ███ recently. My DM is open, welcome to discuss!

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