Polygon Acquires Almost as Many Users as Ethereum: A Closer Look at the Growing Trend

Ethereum Ranks Above Polygon as Most Popular Blockchain in Terms of Acquired Users, Reports Blockchain Analytics Firm Flipside

Polygon’s user base in 2023 nearly rivalled Ethereum’s, according to a report.

In 2023, Polygon, the layer-2 scaling network for Ethereum, emerged as a serious competitor to its parent blockchain. According to blockchain analytics firm Flipside, Polygon acquired an impressive 15.24 million users, just 160,000 users short of Ethereum’s 15.4 million. This revelation signals a significant shift in the crypto landscape and highlights the growing popularity of layer-2 scaling solutions.

What Defines an Acquired User?

Before diving into the details, let’s clarify what Flipside defines as an acquired user. They consider an acquired user as someone who has conducted at least two transactions on a particular blockchain, with at least one transaction occurring in 2023. This definition ensures that the analysis captures active users who have engaged with the blockchain network during the year.

The Rise and Fall of Polygon

Interestingly, Polygon took an early lead in user acquisition during the first half of 2023. However, Ethereum regained its stronghold and maintained its lead throughout the second half of the year. Flipside’s data shows that Polygon achieved a remarkable milestone in January 2023, with 2.8 million new users joining its network. This accounted for over 40% of Polygon’s total acquired users for the year. Although Polygon experienced a gradual decline in monthly user acquisition compared to other networks, it still demonstrated impressive growth and held its ground.

The Top Contenders

While Ethereum and Polygon battled for the top spot, Bitcoin secured the third position with 10.65 million acquired users. Solana and Arbitrum rounded out the top five blockchains with significant user acquisitions. Flipside’s analysis covered a total of eight tracked blockchains, including Optimism, Avalanche, and Base, and recorded a whopping 62 million acquired users across these networks.

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The Peaking and Decline of User Acquisition

Flipside’s data indicates that user acquisition reached its peak in May but gradually declined thereafter. Interestingly, the increase in acquired users coincided with the collapse of Silicon Valley Bank in March. It is plausible to suggest that this event may have shaken confidence in centralized entities, prompting users to seek decentralized custody alternatives. This trend likely contributed to the surge in user acquisition for various blockchain networks.

Exploring Base’s Journey

Flipside noted that Base, a blockchain included in their analysis, experienced a strong start following its launch in August 2023. However, its user volume gradually diminished during the final months of the year. The firm attributes this decline to the renewed enthusiasm surrounding more established chains. Networks like Ethereum and others had more robust and diverse app ecosystems, providing users with a wider array of options to engage with. However, with the next bull run on the horizon, Base’s user growth may experience a resurgence. Coinbase’s efforts to serve as a crypto gateway for new users could potentially boost Base’s user acquisition numbers.

Q&A: Addressing Readers’ Concerns

Q: What is the significance of Polygon acquiring almost as many users as Ethereum? A: Polygon’s ability to compete with Ethereum in terms of user acquisition indicates the growing adoption of layer-2 scaling solutions. It demonstrates that users are recognizing the benefits and potential of these solutions to address Ethereum’s scalability issues.

Q: Why did Polygon experience a decline in user acquisition over time? A: While Polygon saw a consistent decline in monthly user acquisition over the year relative to other networks, it still maintained favorable growth. The decline may be attributed to Ethereum’s dominance and the allure of more established chains with well-developed app ecosystems.

Q: What impact did the collapse of Silicon Valley Bank have on user acquisition? A: The collapse of Silicon Valley Bank in March 2023 likely shook confidence in centralized entities, leading users to seek decentralized custody alternatives. This event coincided with a surge in user acquisition for various blockchain networks.

Q: Can we expect Base’s user growth to rebound in the future? A: With the next bull run on the horizon, there is a possibility of renewed growth for Base. Coinbase’s efforts to cater to new users as a crypto gateway could provide a boost to Base’s user acquisition.

A Look Ahead

The impressive user acquisition numbers for Polygon and the other top contenders illustrate the growing interest and adoption of blockchain technology. As layer-2 scaling solutions gain more traction, we can expect greater scalability and improved user experiences. The crypto landscape is constantly evolving, and these developments herald a promising future for both users and investors.

References

1. Flipside: Blockchain Analytics Firm Flipside’s Tweet
2. Awesome Linking: Polygon AggLayer to Make Multiple Blockchains Feel Like ‘A Single Chain’
3. Blocking.net: Whales Market Announces Launch of Revolutionary Dapp on the Solana Network
4. Cyber Magazines: Slumdog Billionaire — Incredible Rags-to-Riches Tale of Polygon’s Sandeep Nailwal

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