Web3 is buried in metrics, most of which paint an unclear picture. Trading volumes, token prices, and flashy headlines often overshadow what really matters, such as the quality of user engagement and the potential for real exponential growth. As the industry moves beyond the hype, reliable, data-driven signals of success are no longer an option, but a necessity.
I have good news. Tools already exist to cut through the noise. By combining multiple on-chain metrics into a single “health index” score that indicates the depth and quality of overall user engagement, we can determine which chains are truly thriving and poised for long-term growth. Can be identified. As 2024 draws to a close, let's dig into what these signals reveal about today's major chains and what to expect in 2025.
Evaluate user quality using aggregated data rather than isolated data
When building a sustainable on-chain ecosystem, optimizing a single user action doesn't make sense. What you need is context. It's a way to not only quantify everything your users are doing, but also how and why it matters. One promising approach to achieving this is to aggregate user behavior into five major categories.
Trading activities from spot trading to smart contract interactions. Medium to long-term token accumulation and other “investment” actions. DeFi engagement for activities such as staking, lending, and providing liquidity. NFT activities such as minting, trading, etc. Participation in governance to quantify DAO or protocol governance contributions.
Importantly, these indicators should not be treated equally. A better approach is to weigh them using a Bayesian model and combine them to produce a single topline “score”. Unlike traditional scoring systems that rely on static thresholds or simple averages, this allows prior knowledge (what you would expect from an “average” wallet) and new evidence (what you would expect from an “average” wallet) to (actual activities). These dynamic, multivariate scores are very difficult to calculate, so they are more likely to yield accurate and actionable insights.
What data tells us about 2024
The above approach provides a new perspective on the user activities of each chain until 2024. Let's highlight some of the more surprising findings.
Solana (top light blue line with a high of about 2.75) received a large share of high-quality users from February to mid-March, but the quality of engagement has declined since then. Interestingly, this decline coincides with SOL’s initial price and trading volume spike in 2024, which has continued throughout the current meme coin mania. Repetitive actions have diminishing returns when evaluated using Bayesian models. This means that for a given wallet, multiple token swaps will improve your score less than engagement across multiple types of activity. This suggests that most Solana users are currently engaged in a narrow range of on-chain activities that are not contributing to Solana's multi-sector growth.
For Ethereum supporters (bottom orange line starting just above 1) who expected this year's ETH ETF to be a game changer, the numbers paint a different picture. Ethereum's low and stable user scores through the first half of 2024 suggest that this year's bullish developments did not stimulate participation in broader ecosystems such as DeFi activity and protocol governance.
It's also worth noting that Axelar (dark blue line starting at 2.5) had the most active users across the widest range of on-chain activities compared to its overall user base, according to the data. Although Axela currently has a much smaller TVL than the legacy chains dominating today's headlines, this is an interesting signal that warrants closer examination and one that you would have missed if you were only looking at market cap and trading volume. It would have been.
The point here is not that Solana is doomed and Axelar will inevitably become the world's largest chain. There is limited value in comparing these types of scores across chains, as each score is proportional to the user quality of the corresponding chain. In other words, a Solana user with a score of 4 could be very different from a 4 on Axelar, given the differences in baseline activity for each chain. As such, these scores are most useful for tracking changes in the quality of user activity across chains over time, rather than for chain-to-chain comparisons.
Predictions for 2025
That being said, what does each chain's user quality performance tell us about next year?
First, it is clear that Solana faces significant challenges and opportunities heading into 2025. The chain's trajectory will depend on its ability to maintain a large casual user base and expand the scope of interactions on the chain. Otherwise, if the meme coin cools down, there could be a major recession. However, data from early 2024 suggests the chain has a large number of high-quality users that can withstand whatever happens in the short term.
2024 demonstrated Axelar's ability to attract a focused user base engaged in diverse and sustained on-chain activities, rather than speculative proliferation. Axelar's challenge now is to scale up its ecosystem without compromising the quality of its user base. This may include prioritizing high-profile partnerships to unlock new audiences while creating a more beginner-friendly onramp across the dApp ecosystem.
As Ethereum's fragmentation moves many active users to the faster and cheaper L2 ecosystem, mainnet activity is likely to become increasingly consolidated around the core features of protocol staking and governance. While these activities are important to the broader EVM ecosystem, this trajectory can be penalized by scoring systems that reward diverse on-chain engagement.
This dynamic highlights the challenges of scoring systems. Prioritizing broad user activities can give an incomplete picture when applied to task-specific networks (or general-purpose chains that are evolving to become more specialized). Therefore, it is important to clearly define what success means for the chain being evaluated and to use a scoring system that captures the corresponding user actions.
A better way to define and drive on-chain growth
Web3 spent too much time tracking the wrong metrics and was unable to aggregate and display the data. In 2025, the winners will be those who find multivariate ways to measure and act on what matters most: the quality of your users.
By incorporating new scoring methods into dashboards, on-chain intelligence platforms can provide more meaningful insights to investors and industry observers. At the same time, Web3 builders can use these scores to clarify top priorities and drive user engagement and value creation. Ultimately, it will help the entire industry move from a hype-driven narrative to a data-backed strategy that unlocks the full potential of Web3 in 2025 and beyond.
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