Ethereum’s User Growth
As the year comes to a close, we’ll see plenty of year in review articles. This is one of them, but with a very specific purpose. We have talked to dozens of companies as we began the process of building SimpleID. Through those conversations, we’ve learned a lot about where founders in the Web3 space think the market is, where they think it’s going, and what the biggest problems are. Today, we’re going to focus on the problems with growth. But first, let’s look at the raw numbers.
According to DappRadar, the peak daily users in 2018 across all Ethereum apps was 23,419 (7/21/2018). The peak daily users across all Ethereum apps in 2019 was slightly less at 22,528 (12/4/19). While it’s important to see the average daily active user number increase (which we’ll cover in more detail later in this post), there are other metrics to explore as well.
2018 saw a total of 239,564,725 transactions across the Ethereum network. 2019 isn’t quite over, and there have already been almost 600,000,000 transactions on the network. Transaction growth is a good indication of interest and activity. But it must coincide with user growth. More on that in a minute.
So far this year, we’ve seen total Ethereum addresses grow from just over 54,000,000 to over 81,000,000. Sure, that growth is impressive. But the growth in wallet address does not correlate to a growth in unique users on the Ethereum network.
With that in mind, let’s explore the problems we’ve seen in Ethereum’s user growth as communicated through discussions with app founders in the space. Here are the bullet points:
- 67% say user experience or onboarding remain the biggest problem they face
- Only 41% have any sort of email communication channel with their users
- 70% say they targeted messaging to the right user at the right time was important
- 75% say they wish they had on-chain analytics available to their specific user pools
As we dig into these raw numbers, we find some interesting points. These companies care about communicating with their users, but the majority of them don’t even have a channel for doing so. We saw that in glaring clarity during the multi-collateral DAI transition when Twitter was used as the megaphone for notifying people of the need to migrate their positions.
The simple ability to communicate with the people using these Ethereum applications is important, but we found that founders and developers also wanted ways of ensuring they were communicating with the right users. This is where on-chain analytics come in. Blockchains, for the most part, are transparent ledgers. The data is there for everyone. Anonymity comes through secondary processes. Yet, despite all the public data, understanding how your users might be interacting with other Ethereum apps is difficult. That type of information could help inform communication methods and content.
And of course, we cannot ignore the ever-present problem facing the blockchain space as a whole: User Experience. As mentioned in a previous post, the experience of onboarding new users is improving every day. SimpleID is helping contribute to those improvements, and we are confident others in the space will continue to up their game. But it’s still a problem. It’s still a barrier according to most of the founders we spoke with.
So, when we look at the picture holistically, we see a problem for Ethereum’s user growth emerging not just in one area, but in a variety of areas. Those areas, in our opinion, combine to make up the concept of engagement. SimpleID is building the platform to solve Ethereum’s user engagement and retention problems, and we hope you’ll help us shape the early days of the project. Sign up for our beta program if you’re building an application. Reach out to us via email. Hit us up on Discord.
We can no longer shy away from the fact that user growth, as traditionally defined by Web2, is increasingly important to Web3. An increase in network transactions and an increase in wallet address is not enough to sustain an entire movement. To do that, we need people. We need more individuals. We need the remaining 99%. Let’s make that happen together.
Connect with us!