In this second installment of our research series, our spotlight is active addresses. This article focuses on wallets and active address data to see which networks people are using the most. This data can give us important hints about where blockchain ecosystem is heading towards.
Analyzing active addresses in blockchain is not simple, especially when it comes to combining data points from different sources. For this article, we have used data from a range of sources including The Block, Glassnode, Artemis, and TONStat. We also created a scatter chart for a combined visualization of the activity in major networks. This chart makes it easy to spot which blockchain networks are gaining momentum and which ones might be seeing a decrease in user activity.
Let’s delve into the details. The daily active address data from Glassnode shows us the strong correlation between spikes in active addresses and bull runs of 2017 and 2021 in the crypto market. Over the last couple of months leading into 2023, there’s a visible uptick in Bitcoin’s daily active addresses, hinting at a potential resurgence of interest in Bitcoin.
Ethereum’s daily active addresses chart paints a different story. While there have been instances in the past where spikes in active addresses aligned with bullish market behavior, the recent trend is a cause for consideration. Post-2021, Ethereum displays a consistent downtrend in daily active addresses, even when Bitcoin seems to be gathering momentum.
This trend is even more evident when we zoom out and look at the monthly active address data.
The following data from Artemis also confirms Ethereum’s downtrend. This is in contrast to chains like Polygon and Avalanche, both of which have displayed a steady upward trajectory since early 2021, suggesting a shift to alternative layer 1’s and Ethereum’s scaling solutions.
In this sense, Binance backed BNB Chain’s activity shows strong presence in the market. While Arbitrum and Optimism, both layer-2 solutions for Ethereum, also indicate growth in their active user base, with Arbitrum having a notable spike in mid-2022. On the other hand, Base blockchain is recently entered the competition as a blockchain developed by Coinbase, another popular centralized exchange.
Another popular Layer 1, Solana Network had shown great adoption by the end of the previous bullrun. Although it still shows activity, the huge downward trajectory is evident on the report that is published by The Block.
On a daily scale, there’s a peak of active addresses in the beginning of February, followed by a significant drop and a minor recovery by the end of May. The monthly chart underscores this trend, with a surge in active addresses in mid-2021, followed by a steady decline, indicating reduced network engagement over time.
One interesting observation from our research is the performance of the Telegram Open Network (TON). Despite the bear market, TON accounts shows remarkable and consistent growth over the past year.
Starting from November 2022, there were around 350k active wallets. This figure has experienced a consistent and notable rise, reaching close to 850k active wallets by September 2023. This almost threefold increase demonstrates the platform’s growing adoption and user engagement during this period. Telegram’s approach to wallet creation bypasses the complex steps allowed the rise in on-chain active wallets seen in the chart. This design, which enables account abstraction comes with a trade-off: a more centralized structure.
In summary, our research on wallets and active addresses reveals several key findings. Bitcoin continues to maintain a strong presence with sustained interest and potential for future growth, while Ethereum has experienced a consistent downtrend in daily active addresses. Alternative layer 1 solutions and layer 2’s like Avalanche and Polygon are gaining traction, indicating a shift in interest away from Ethereum. The remarkable growth of the Telegram Open Network (TON) highlights its growing adoption and user engagement. Overall, monitoring active addresses is crucial for understanding user behavior and market trends in the dynamic blockchain landscape.
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