Ethereum and Polygon Lead EVM User Growth and Trading Activity in Q1

In the first quarter of 2024, Ethereum and Polygon have emerged as leaders in Ethereum Virtual Machine (EVM) user growth and trading activity, as reported by blockchain analytics firm Flipside. This achievement underscores their significant influence and continued dominance in the blockchain ecosystem, particularly in decentralized finance (DeFi) and non-fungible tokens (NFTs).

User Growth and Trading Activity

As of March 27, 2024, Ethereum recorded an impressive 13.4 million new users, while Polygon followed closely with 12.3 million new users. Combined, these two networks accounted for approximately 70% of all new EVM users in the first quarter. This surge in user growth highlights the strong demand for platforms that offer robust decentralized applications (dApps) and efficient trading mechanisms.

Ethereum’s Continued Dominance

Ethereum’s mainnet continues to be the dominant force in the EVM landscape. The platform’s robust infrastructure supports a wide range of DeFi applications, which remain the primary attraction for new users. In Q1, Ethereum led the trading volume with $12 billion, reflecting a consistent upward trend in DeFi activity compared to the previous year’s volatile swings.

Polygon’s Strategic Positioning

Polygon’s high new user numbers are largely attributed to a surge in NFT activity. The platform’s low transaction fees and high throughput make it an attractive option for NFT creators and traders. Polygon’s ability to provide a seamless user experience for minting and trading NFTs has been a significant driver of its growth.

Arbitrum’s Strong Performance

Arbitrum also showed notable growth, adding 4.7 million users since the beginning of 2024. This increase is primarily due to the rising activity in its DeFi sector. Arbitrum’s Layer-2 solution offers enhanced scalability and lower transaction costs, making it a favorable choice for DeFi enthusiasts.

Base’s Remarkable Growth

Base, a relatively new entrant in the EVM space, experienced significant growth with a record 243,000 new users as of March 16. This nearly eightfold increase in its user base since January is largely due to Coinbase’s efforts to simplify cryptocurrency access for beginners. Base’s performance highlights the potential for new chains to capture user interest rapidly, especially when backed by major industry players like Coinbase.

Diversity in dApp Interaction

The Flipside report highlighted that Ethereum had the highest trading volume but did not have the most evenly distributed app adoption among the analyzed chains. Base, on the other hand, showed a more balanced user engagement across its applications, indicating a diverse range of user interests and reducing the dominance of any single app.

Impact of NFTs

NFT trading activity presented a mixed picture across EVM chains. While Ethereum and Base saw a steady increase in new user NFT trading, Polygon experienced a decline from its early peaks. This fluctuation underscores the volatile nature of the NFT market and suggests that NFTs may not maintain their previous dominance in driving user activity.

Applications Driving User Activity

Specific applications played a crucial role in attracting new users to different chains. On Ethereum, token swaps and bridging apps like Uniswap led the way. Meanwhile, on Base, Orbiter Finance was a major draw. Optimism saw a significant influx of new users due to interest in Worldcoin (WLD), demonstrating how specific projects can significantly influence user engagement.

Conclusion

The first quarter of 2024 has reaffirmed Ethereum and Polygon’s leading positions in the EVM ecosystem. Their substantial user growth and high trading volumes reflect their continued appeal and robustness in supporting DeFi and NFT activities. As new entrants like Base and Arbitrum gain traction, the competitive landscape of EVM chains is becoming increasingly dynamic.

This ongoing evolution highlights the importance of innovation, scalability, and user-friendly experiences in attracting and retaining users. Ethereum and Polygon’s ability to maintain their leadership amidst growing competition will depend on their continued innovation and responsiveness to user needs. As the EVM ecosystem expands, these platforms will play a pivotal role in shaping the future of decentralized finance and blockchain technology.