Key Takeaways:
- DAUS are like customers of a traditional company. A high number of DAUs indicates a thriving ecosystem primed for growth.
- It is best to compare DAUs across similar crypto investments. (i.e. Layer-1s, lending protocols, etc.)
- Though DAU is our top metric to evaluate a crypto investment, it’s best used in conjunction with revenue, fees, and market cap to create a holistic understanding of a project
At Bitcoin Market Journal, we talk a lot about Daily Active Users (DAUs) … and for good reason. Daily Active Users (DAUs) is a critical metric reflecting the success and growth of a blockchain network.
For crypto investors, think of DAUs as customers. If there are many DAUs – or DAUs are growing rapidly – it means a crypto “company” is scaling up and potentially an excellent investment. If DAUs are low (or falling steadily), it’s probably not worth your money.
In this guide, we’ll explain how DAUs work, and the best blockchains by DAU.
What Are Daily Active Users (DAU)?
DAU is a metric that reflects the number of unique public addresses transacting on a blockchain each day. This gauge can tell a lot about the health of a crypto company.
Like social media networks, blockchains have network effects: the more people use them, the more helpful they become. When a blockchain has many DAUs, it is a strong signal that it might be a good investment—significantly so if the DAUs grow over time.
Additionally, a large user base means genuine decentralization for any blockchain, which is essential for the network’s security.
Top Blockchains by Daily Active Users
Tron
Daily Active Users (June 2024): 2,165,000
Tron is a public blockchain created in 2017 by Justin Sun, who envisioned an Ethereum alternative for the Asian market. His vision has proven successful, as it’s the 13th largest chain today, with a market cap of over $10.23 billion.
Since its inception, Tron made sure to be compatible with Ethereum. Its native cryptocurrency, TRX, was an ERC-20 token until it moved on to its proprietary chain in 2018.
With over 2.1 million DAUs, Tron has the largest daily active user base. While the DAU metric doesn’t directly influence Tron’s trading volume and revenue, it contributes to the ecosystem's health.
Tron usage spiked following the June 1, 2023 news of Hong Kong accepting applications for crypto trading platform licenses.
BNB Chain
Daily Active Users (June 2024): 902,000
BNB Chain (BNB), created by the global cryptocurrency exchange Binance and previously known as BNB Smart Chain (BSC), is another fast-growing blockchain ecosystem in DeFi. BNB is the fourth-largest cryptocurrency, with a market cap of over $88 billion. This vast market cap is mainly due to the token's use on Binance for perks and fee discounts.
Binance Chain launched in 2020, hosting the native token BNB. In 2021, BSC was introduced to tap into the fast-growing DeFi sector. BSC has been appreciated for its intuitive design, compatibility with Ethereum Virtual Machine (EVM), and low fees.
Eventually, BSC merged with Binance Chain, forming today’s BNB Chain. It hosts about 5,000 dapps while having the governance token on the same chain. The ecosystem accounts for over 5% of TVL in DeFi, with StarryNift being the most popular dapp.
BNB Chain has over 902.41k DAUs, down 18.3% from the previous month. In December 2023, it hit over 3.4 million DAUs. Since that short-term spike, the DAU figure has remained around 900k-1.2 million.
BNB saw its DAU hit record levels in December 2023 in response to a wave of promotions from the Binance exchange.
Polygon
Daily Active Users (June 2024): 1,180,000
Created in India in 2017 and known initially as the Matic Network, Polygon is a layer-2 blockchain that runs alongside the Ethereum blockchain and connects Ethereum-based projects. The platform uses a modified proof-of-consensus system that aims to help Ethereum with its scalability by improving transaction speeds and lowering costs for developers.
Polygon is the 19th largest blockchain, with a market cap of over $5 billion as of June 2024. It is a huge player in the DeFi space, hosting over 53,000 dapps. Polygon has over 1.18 million daily active users, almost quadrupling its numbers since September 2023, when the number hovered around 340,000.
Polygon usage has taken off in 2024 after the project announced sweeping changes to the protocol to usher in Polygon 2.0.
Ronin
Daily Active Users (June 2024): 1,130,000
Ronin is an Ethereum virtual machine-based (EVM) blockchain developed for play-to-earn games and designed to handle transactions much faster and at a lower cost than the Ethereum mainnet.
One of Ronin's most popular play-to-earn games is Axie Infinity. This game allows players to purchase NFT creatures and battle them against each other. However, it has struggled due to dropping DAUs and token prices.
Ronin was launched in February 2021, and its daily active user numbers have seen a couple of significant spikes since then. The first spike occurred in November 2021, when it hit over 758,000. After that, the user count decreased, reaching a low of 12,800 in May 2023. While the number has steadily increased since then, hitting 1.2 million DAUs in March 2024, we do occasionally see slight dips in DAU as seen in the chart.
Ronin attributes its massive growth trajectory to its focus on gaming, including Axie Infinity and Pixels.
Solana
Daily Active Users (June 2024): 901,300
Founded in 2017, Solana is a third-generation blockchain platform designed to work similarly to and improve upon Ethereum. Solana Labs built the blockchain in San Francisco and launched it in 2020. It is currently run by the Solana Foundation based in Geneva.
While not as big a player in the DeFi space as some other blockchains, Solana hosts close to 300 dapps and has a TVL of around $4 billion. It accounts for around 4.5% of TVL in DeFi, with Jupiter Exchange being its most popular app.
Solana’s DAUs have been growing steadily since September 2023, when it sat around 83,9000 DAUs. Now, that number is up to 901k DAUs.
Once billed as an “Ethereum killer,” Solana suffered from its association with FTX. The chain has finally put that behind and the result has been a surge in usage in 2024.
Ethereum
Daily Active Users (June 2024): 386,930
Ethereum is the largest blockchain network using smart contracts. It was launched in 2014 to improve bitcoin’s scalability and bring more functionality by hosting dapps. Today, ETH’s $435.2 billion market cap is second to bitcoin.
Ethereum has been dominant in the DeFi space and accounts for more than half of the total TVL in DeFi. However, cracks may be showing as its level of dominance in terms of users is as low as ever, with Tron, BNB, and other chains gaining traction.
Since Ethereum is a well-established network that has dominated the blockchain space for years, its DAU figure isn’t changing much, remaining in the range of 330 - 430,000 over the past year. The DAU can sometimes break above 1 million – it happened twice during the last 12 months, but the spikes are rare.
However, Ethereum's DAU number doesn’t tell the whole story. Many other chains—such as the L2s Arbitrum and Optimism — are built on Ethereum, and their DAU numbers impact Ethereum without being directly counted as Ethereum users. Since Ethereum is a large and liquid ecosystem, its DAU figure no longer correlates with other metrics.
As a mature blockchain, Ethereum tends to see fairly stable user activity, with much of its real transaction volume occurring on Layer-2 chains.
Bitcoin
Daily Active Users (June 2024): 478,170
Bitcoin is the largest and oldest cryptocurrency. It was launched at the end of 2009 and represents the first use case of blockchain technology.
The decentralized network has a rigid architecture that doesn’t support smart contracts and the development of dapps.
The bitcoin blockchain has been built exclusively for the native cryptocurrency, BTC. Although it was designed as a payment network, it acts more as a Store of Value (SOV) today.
Based on the past year, it appears that when bitcoin’s price is high, more people want to hold (meaning DAU goes down), and when the price drops, more people sell (DAU goes up).
Like Ethereum, bitcoin has a fairly stable user base. When the price reached new highs in Q1, DAUs dropped as more investors held.
Additional User Metrics to Consider
WAU (Weekly Active Users)
Weekly Active Users represents the number of unique users interactive with a cryptocurrency over a 7-day period. Weekly Active Users reflect activities that occur less frequently, smoothing out the variability of daily interaction. Where DAU would be a better measurement for gaming and trading projects, WAU is a better measuring tool for platforms that don’t require daily interaction.
MAU (Monthly Active Users)
Similar to the Daily Active Users and Weekly Active Users, Monthly Active Users represent the number of unique users who interact with a particular cryptocurrency over a 30-day period. Where DAU provides immediate feedback on daily usage, MAU sheds insight on monthly trends and long-term user retention, indicating steady platform growth and long-term stability.
DAU/MAU Ratio
One way to figure out how often users are returning is to calculate the ratio of DAUs to Monthly Active Users (MAUs). This ratio can be calculated by dividing the DAU by the MAU and multiplying by 100. For example, if a blockchain has 1,000 DAUs and 2,000 MAUs, the DAU/MAU ratio is 0.5. This means that 50% of customers use the blockchain daily. Tracking the DAU/MAU ratio can help us see which projects are “sticky.”
Investor Takeaway
DAUs play a crucial role in evaluating the health and growth of crypto investments. This metric demonstrates popularity and stickiness, which is a far better way to invest than simply looking at the price.
While they aren’t the only important metric for assessing crypto projects, intelligent investors should measure DAUs carefully, as they can signal great crypto investments – and warn us away from crypto projects that are all hype, with no users.
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