Web3 is drowning in metrics, most of which paint an unclear picture. Transaction volumes, token prices, and flashy headlines often obscure what really matters: the quality of user engagement and the potential for organic, exponential growth. As the industry moves beyond hype, reliable, data-driven signals of success are no longer optional – they are essential.
Here’s the good news: the tools to eliminate noise already exist. By combining multiple on-chain metrics into a single “health index” score that indicates the depth and quality of overall user engagement, we can identify which chains are truly thriving and poised for long-term growth. Now that 2024 is coming to a close, let’s dive into what these signals reveal about today’s top chains and what we can expect in 2025.
Assess user quality using aggregated, not isolated, data
When creating a sustainable on-chain ecosystem, it does not make sense to optimize any action of a single user. What’s needed is context: a way to quantify not only everything users do, but also how and why it matters. A promising approach to achieve this is to aggregate user behaviors into five main categories:
- Transaction activityranging from spot trading to smart contract interactions.
- Token accumulation in the medium and long term, and other “investment” behaviors.
- DeFi Commitment for activities such as betting, lending and liquidity provision.
- NFT activity such as minting, commerce, and utility-driven interactions.
- Participation in governance to quantify protocol or DAO governance contributions.
Fundamentally, these metrics should not be treated equally. A better approach is to weigh them and combine them using a Bayesian model to generate a single top-line “score.” Unlike traditional scoring systems that rely on static thresholds or simple averages, this allows us to incorporate both prior knowledge (what we expect from an “average” wallet) and new evidence (actual activity observed on-chain). These dynamic, multivariate scores are much more difficult to manipulate and are therefore more likely to reveal accurate and actionable information.
What the data tells us about 2024
The above approach provides new insight into each chain’s user activity through 2024. Let’s take a look at some of the most surprising findings.
Solana (the light blue top line peaking at ~2.75) attracted a large proportion of high-quality users between February and mid-March, but the quality of engagement has declined since then. Interestingly, this drop coincided with SOL’s first price and trading volume surge in 2024, and has continued during the current memecoin mania. Repetitive actions have diminishing returns when evaluated using a Bayesian model, meaning that multiple token swaps produce smaller score improvements than participation in multiple types of activities, for any given wallet. This suggests that the majority of Solana users are currently engaged in a limited range of on-chain activities that do not contribute to Solana’s multi-sector growth.
As for Ethereum supporters (the lower orange line starting just above 1) who were hoping this year’s ETH ETFs would be a game-changer, the numbers paint a different picture. The low and stable Ethereum user score through the first half of 2024 suggests that this year’s bullish developments did not spur broader participation in the ecosystem, such as DeFi activity and protocol governance.
It’s also worth noting that Axelar (the dark blue line starting at 2.5) had the most active users across the widest range of on-chain activities relative to its total user base, according to the data. While Axelar is currently much smaller per TVL than the legacy chains that dominate today’s headlines, this is an intriguing sign that deserves closer inspection, and would have been overlooked if we had looked solely at market cap or volume of operations.
The conclusion here is not that Solana is doomed and that Axelar will inevitably become the largest chain in the world. There is limited value in comparing these types of scores across chains, as each score is proportional to the user quality of its corresponding chain. In other words, a Solana user with a score of “4” may be very different from a “4” on Axelar, given the differences in the initial activity of each chain. As such, these scores are most useful when tracking changes in the quality of a chain’s overall user activity over time, not in cross-chain comparisons.
Predictions for 2025
That said, what does each network’s user quality track record tell us about the year ahead?
For starters, it’s clear that Solana faces significant challenges and opportunities heading into 2025. The chain’s trajectory depends on its ability to retain its huge casual user base and expand its range of on-chain interactions. Failure to do so could result in a significant drop once memecoins cool down, although data from early 2024 suggests the chain has a large contingent of quality users that will endure regardless of what happens in the near term.
2024 demonstrated Axelar’s ability to attract a concentrated user base that engages in diverse and sustained on-chain activities, rather than speculative waves. Now, Axelar’s challenge will be to improve its ecosystem without diluting the quality of its user base. This may involve prioritizing high-profile partnerships to unlock new audiences while creating more newbie-friendly on-ramps throughout your dApp ecosystem.
Ethereum’s sharding has shifted many active users to its faster and cheaper L2 ecosystem, so we may see mainnet activity increasingly consolidate around core governance and protocol functions . These activities are fundamental to the broader EVM ecosystem, but this trajectory can be penalized by scoring systems that reward diverse participation in the chain.
This dynamic underscores a challenge for scoring systems: prioritizing a broad range of user activities can present an incomplete picture when applied to task-specific networks (or general-purpose chains that are evolving into something more specialized). As a result, it is important to clearly define what success means for any chain being evaluated and use a scoring system that captures corresponding user actions.
A better way to define and drive chain growth
Web3 has spent too much time chasing the wrong metrics and failing to see the data together. In 2025, the winners will be those who find multivariate ways to measure (and act on) what matters most: user quality.
By incorporating new scoring methods into their dashboards, on-chain intelligence platforms can provide more meaningful insights to investors and industry observers. At the same time, Web3 creators can use these scores to clarify top priorities and drive user engagement and value creation. Ultimately, this will help the entire industry move from hype narratives to data-backed strategies that unlock the full potential of Web3 in 2025 and beyond.
