How many users are there in the crypto world? Bitcoin has 1.14 million daily active addresses, and DeFi users may be "involuted"

The Internet wave swept in in 1998. According to Internet World Stats (IWS), the number of Internet users has increased by 1,300% in the past 20 years. As of December 31, 2020, the number of Internet users worldwide reached 5.053 billion, accounting for about 64.2% of the world's population.

Ten years later, in 2008, mobile Internet emerged. According to Statista, as of January 2021, the number of active mobile Internet users worldwide was approximately 4.32 billion, and the number of active mobile social media (App) users was approximately 4.15 billion.

When the two previous technological revolutions were in the ascendant, cryptocurrencies suddenly became popular in the bull market in 2017. After more than a decade of development, attracted by the myth of making money in the bull market, how many users have entered the crypto world?

PAData analyzed the number of independent addresses, non-silent addresses, and active addresses of public chains such as Bitcoin, and the number of independent addresses and active addresses of DeFi and found that:

1) The total number of valid addresses (balance greater than 0.01) for Bitcoin and Ethereum is 22.11 million. Considering that each user can hold multiple addresses and there is overlap between users, when assuming that every 5 independent addresses correspond to 1 independent user and the user overlap rate of the two public chains is 30%, the total number of Bitcoin and Ethereum users is estimated to be approximately 3.8891 million. If we infer that the market value accounts for 80%, then the total number of users on the blockchain is estimated to be approximately 4.8614 million. Of course, there are more users who hold coins through exchanges, and this data is difficult to estimate in the black box.

2) The average daily active addresses of Bitcoin are about 1.14 million, accounting for 12.82% of the total number of valid addresses (balance greater than 0.01); the average daily active addresses of Ethereum are about 580,000, accounting for 4.38% of the total number of valid addresses (balance greater than 0.01). The average daily active addresses of other public chains are approximately between 50,000 and 200,000.

3) Although the number of independent addresses of DeFi has exceeded 1.67 million, the number of active addresses is only 42,500. Assuming that the ratio of active Bitcoin addresses to the total number of valid addresses is used, the estimated number of valid addresses of DeFi is about 331,500. Also assuming that 5 addresses correspond to 1 independent user, the estimated number of independent users of DeFi is about 66,300.

4) This year, with the rapid growth of total addresses, the proportion of active addresses has dropped by about 0.5 percentage points, which means that most of the newly added independent addresses are likely to be "wool addresses". However, the total amount of locked positions per 10,000 active addresses has increased by 23.27% this year, which shows the possibility of "involution" of DeFi users, that is, active users continue to expand the scale of investment.

There are 22.11 million valid Bitcoin and Ethereum addresses.

The number of users on the blockchain is about 5 million

Bitcoin and Ethereum are the two most representative public chains in the blockchain. Understanding the number of valid addresses of these two public chains is the basis for predicting the scale of blockchain users.

According to statistics from glassnode, as of March 21, there were 803 million Bitcoin addresses, an increase of 282.09% from the beginning of 2017. However, not all addresses are valid addresses, and the balance of many of them is already 0. These addresses are "silent" addresses, which are basically impossible to interact with Bitcoin because they have never been used after registration or cannot pay the handling fee.

Data shows that the number of Bitcoin addresses with non-zero balances is currently about 36.77 million, an increase of about 184.59% from the beginning of 2017, which is lower than the increase in the total number of addresses. Considering the special UTXO model adopted by Bitcoin, there may be a large number of change addresses among these addresses with non-zero balances. Change addresses may also become "silent" addresses because they cannot pay transaction fees.

It is generally believed that addresses with a balance greater than 0.01 are more likely to be non-silent addresses. Therefore, these addresses are also considered valid addresses, that is, addresses that may still interact with the chain in the future. According to statistics, the number of addresses with a balance greater than 0.01 on Bitcoin is currently about 8.8939 million, accounting for about 24.19% of the number of non-zero addresses.

Looking at Ethereum, according to statistics from glassnode, as of March 21, there were more than 106 million Ethereum addresses, about 146 times more than at the beginning of 2017. Like Bitcoin, addresses with a balance of 0 are either newly registered and unused addresses, or addresses that have just returned to zero after use. In short, the possibility of these addresses interacting with Ethereum is very low, and they can be regarded as "silent" addresses.

Currently, the total number of addresses with non-zero balances on Ethereum is about 55.88 million, accounting for about 52.27% of the total number of addresses, which has increased 123 times compared to 2017. According to statistics from BitInfoCharts, the average transaction fee on Ethereum is about 0.01 ETH recently, so addresses with balances below 0.01 ETH can also be regarded as "silent" addresses.

Excluding addresses with a balance of less than 0.01 ETH, the current number of valid addresses on Ethereum is approximately 13.22 million, accounting for approximately 23.66% of the number of non-zero addresses. Since the second half of last year, affected by the rapid development of DeFi, the number of valid addresses on Ethereum has also shown a rapid development trend. So far, the number of non-zero addresses on Ethereum has increased by 31.10%, and the number of valid addresses (balance greater than 0.01) has increased by 64.32%.

Currently, the total number of valid addresses (balance greater than 0.01) for Bitcoin and Ethereum is 22.11 million. Considering that each user can hold multiple addresses and there is overlap between users, when assuming that every 5 independent addresses correspond to 1 independent user and the user overlap rate of the two public chains is 30%, the total number of Bitcoin and Ethereum users is expected to be approximately 3.8891 million. If we infer that the market value of the two accounts for 80%, then the total number of users on the blockchain is expected to be approximately 4.8614 million. Of course, this does not include users who hold coins through exchanges, and this data is difficult to estimate in the black box.

In terms of active addresses, this year, the average daily active addresses of Bitcoin are about 1.1431 million, accounting for about 12.82% of the valid addresses (balance greater than 0.01). Secondly, the daily active addresses of Tron and Ethereum also exceeded 500,000, about 637,600 and 586,200 respectively. The daily active addresses of Ethereum account for about 4.38% of the valid addresses, which is less active than Bitcoin. In addition, the average daily active addresses of other public chains are not many, ranging from about 50,000 to 200,000.

The number of DeFi users is less than 100,000.

Active users continue to increase their investment

At the end of last year, the number of independent DeFi addresses exceeded 1 million, 10 times more than at the beginning of last year. This high-speed growth trend is still continuing. According to statistics from Dune Analytics (@rchen8), as of March 21, the number of independent DeFi addresses has reached 1.6729 million, an increase of about 42.08% from 1.1774 million at the beginning of this year.

On the other hand, according to DappRadar's monitoring of the number of active DeFi addresses, as of March 21, the number of active addresses was about 42,500, an overall increase of about 17.73% from 36,100 at the beginning of this year, which is lower than the increase in the total number of independent addresses. Moreover, the proportion of daily active addresses to the total number of addresses on that day also fell from 3.07% to 2.54%, which means that most of the newly added independent addresses are likely to be "wool addresses".

Assuming that the ratio of active Bitcoin addresses to the total number of valid addresses is used for conversion, the number of valid DeFi addresses is estimated to be approximately 331,500. Also assuming that 5 addresses correspond to 1 independent user, the number of independent DeFi users is estimated to be approximately 66,300.

It is worth noting that the total amount of locked funds (after correction) per 10,000 active addresses has shown a clear upward trend since the beginning of this year. At the beginning of the year, the total amount of locked funds (after correction) per 10,000 active addresses was approximately US$5.285 billion, and on March 21, this figure had risen to US$6.515 billion, an increase of 23.27%. This may be affected by the rise in coin prices, or it may reflect the "involution" of DeFi users, that is, the investment scale of active users continues to expand.

Judging from the user situation within DeFi, it can be found that the "28 effect" is already very obvious. As of March 21, Uniswap has the largest number of independent addresses, about 1.126 million, accounting for 67.31% of the total number of independent addresses in DeFi, and is the most important application in the DeFi field. Secondly, the independent addresses of Compound, 1inch, Kyber and Balancer have also passed the 100,000 mark. The number of independent addresses of Ren and Cream is relatively small, neither of which exceeds 10,000.

The average (median) growth rate of independent addresses of various DeFi protocols this year is about 31.55%, which is lower than the overall increase of 42.08%. Among them, only BadgerDAO, SushiSwap, 1inch, Uniswap and Balancer have increased their independent addresses more than the overall level, especially BadgerDAO, which has increased by more than 1027%, SushiSwap and 1inch have also exceeded 100%, and the growth rates of these three applications are relatively high. It can be seen that the address growth rate of the head protocol is the main driving force behind the growth rate of total independent addresses.

Moreover, according to DappRadar data, the daily active addresses of most DeFi protocols are very low. Uniswap, which has the most daily active addresses this year, has only 33,300, which is a significant difference from the hundreds of millions of daily active addresses of mainstream mobile Internet applications. However, we should see the rapid growth potential of daily active addresses of various DeFi protocols.

According to earlier statistics from PAData, Uniswap had only 13,700 daily active addresses last year, Synthetix had only 607, and SushiSwap had only 1,621. The average daily active addresses of these three applications have increased significantly this year, with increases of approximately 143%, 388%, and 43%, respectively.

In the future, as Ethereum Layer 2 solutions are further applied to DeFi protocols, it is expected that DeFi users will continue to grow. For each DeFi protocol, the choice of Layer 2 solution and when to launch the Layer 2 version may have a profound impact on user growth, and thus have an impact on the DeFi market structure.