Summary: For investors, Daily Active Users (DAU) are like customers of a traditional company. A high number of DAUs indicates a thriving ecosystem, attracting more developers and users and creating a virtuous circle of growth and innovation. Here, we look at the top blockchains by DAUs in 2024.
At Bitcoin Market Journal, we talk a lot about Daily Active Users (DAUs) … and for good reason. As we’ve often pointed out, Daily Active Users (DAUs) is a critical metric reflecting the success and growth of a blockchain network. Still, most investors look at other metrics like price and market cap, ignoring DAUs.
For crypto investors, think of DAUs as customers. If many DAUs or DAUs grow rapidly, it means a “company” scaling up and potentially an excellent investment. If DAUs are low (or fall steadily over several years), it’s probably not worth your money.
Read on to find the best blockchains by DAU.
What Are Daily Active Users?
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 blockchain ecosystem.
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.
Tron
Daily Active Users (March. 2024): 1,700,000
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 10th largest chain today, with a market cap of over $11.091 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 1.8 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 (March 2024): 1,400,000
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 $87 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 6% of TVL in DeFi, with StarryNift being the most popular dapp.
BNB Chain has over 1.4 million DAUs, up 9% from the previous month. In October 20222, it hit over 2.1 million DAUs. Since that short-term spike, the DAU figure has remained around 1.2-1.4 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 (March 2024): 1,100,000
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 13th largest blockchain, with a market cap of over $10 billion as of March 2024. It is a huge player in the DeFi space, hosting over 53,000 dapps. Polygon has over 1.1 million daily active users, almost quadrupling its numbers since September 2023, when the number hovered around 340,000. The number of active wallets on Polygon’s platform has also increased, with a growth of 44.25% in February 2024.
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 (March 2024): 1,200,000
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. However, the number has steadily increased since then, hitting 1.2 million DAUs in March 2024.
Ronin attributes its massive growth trajectory to its focus on gaming, including Axie Infinity and Pixels.
Solana
Daily Active Users (March 2024): 1,200,000
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 500 dapps and has a TVL of around $3 billion. It accounts for around 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 1.2 million DAUs.
Once billed as an ‘Ethereum killer’, Solana suffered through its connection to FTX. The chain has finally put that behind and the result has been a surge in usage in 2024.
Ethereum
Daily Active Users (March. 2024): 431,800
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 $423.085 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. The September 2023 spike seems to have no basis other than being the anniversary of “The Merge”.
Bitcoin
Daily Active Users (March 2024): 525,200
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 acts as a Store of Value (SOV) today, it was meant to be a decentralized peer-to-peer (P2P) money system.
Even though bitcoin doesn’t support dapps, BTC alone is quite active, driving the entire crypto market. According to Token Terminal, the number of DAUs is over 525,2000 today, down about 200,000 yearly.
Today, bitcoin’s DAU figure doesn’t show a correlation with anything. In fact, during the last three years, DAU's performance has been a horizontal channel, although BTC’s price and trading volume have fluctuated a lot.
Like ethereum, bitcoin has a fairly stable user base. While DAU trended lower in the second half of 2023, that seems to have leveled off.
What Is the Relationship Between DAUs and Project Success?
A rapid increase in DAUs demonstrates that a blockchain has, most likely, done something to attract new users. This may occur because of various factors:
- The network has launched recently and addresses some critical issues;
- The network has been upgraded, and added unique features that attract users;
- The network hosts a dapp that has surged in popularity and brings more activity.
Also, it’s interesting to observe the correlation between DAUs and market cap, revenue, and transaction volume. Generally, there are three scenarios:
- Large chains like bitcoin and Ethereum have DAU figures that move horizontally for years and don’t show any correlation to price.
- Mid-cap chains, such as Tron or BNB Chain, show a correlation between DAU and market cap.
- Fast-growing chains with lower market cap, such as NEAR or Starknet, show a correlation between their DAU figure and fees and revenue.
The Benefits of DAUs for Crypto Projects
Any blockchain network should aim for a high DAU figure: it means more users driving the ecosystem, with more growth and wealth generation potential. Generally, more users also mean a network with many nodes, meaning it’s more secure and decentralized.
A more extensive user base can directly impact the ecosystem's health. It encourages more developers to build great dapps, attracting even more users, and creating a virtuous circle.
Eventually, blockchains with larger user bases gain more reputation, trust, and recognition among industry stakeholders.
What Are the Challenges of Managing DAU?
Any blockchain benefits from a large user base, but growth brings growing pains. As a rule, more activity requires more scalability, so blockchain developers should focus on transaction speed and lower fees.
More often, scalability may be achieved at the expense of less decentralization, which is another drawback. Generally, blockchains try to find the perfect balance between decentralization, scalability, and security – the so-called blockchain trilemma.
Layer 2 solutions, such as Starknet, Polygon, Arbitrum, and Optimism, have been developed to bring scalability and cheaper transactions to Ethereum. Due to high demand (too many DAUs), Ethereum often struggles with network congestion.
Another challenge is that DAUs are not perfect: each user can have multiple wallet addresses, which leaves the door to manipulation, especially in the case of smaller networks.
One way to overcome this 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 guide investing decisions.
Investor Takeaway
DAUs play a crucial role in evaluating the health and growth of blockchain investments. This metric reflects the lifeblood of any blockchain project, demonstrating popularity and resilience, which lead to innovation and growth. Their numbers often reflect the growth trajectory and possible mass adoption of a blockchain ecosystem.
While they aren’t the only important metric for assessing DeFi projects, 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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