A recent report examining blockchain usage patterns has revealed that most casual users lose interest quickly, with up to 80 percent of new crypto users becoming inactive inside of just 90 days. The comprehensive research studied wallet-level data across several prominent blockchains, including Ethereum, Solana, Arbitrum, and Avalanche.
Conducted by analysis firm Flipside, the study categorized users by their prior on-chain activity levels into low-value, medium-value, and high-value groups. These groups were examined monthly to gauge users’ continuing engagement. The results point to a sharp “retention cliff,” particularly among users classified as low-engagement, who demonstrated minimal previous on-chain activity. Roughly 95 percent of this group stopped interacting within six months.
Medium-value users, who exhibited moderate previous engagement, performed somewhat better, maintaining marginally higher retention rates after early declines. High-value users—those characterized by significant prior blockchain activity—displayed the most stable engagement, losing only approximately 5-8 percent per month, while Ethereum and Avalanche were particularly successful at retaining these active users, keeping around 35-38 percent engaged after half a year. Solana, despite its scale, showed weaker retention performance, though reasons behind this comparative underperformance remain unclear. Typical of newer blockchain networks, initial rapid growth often disguises sharp retention downturns later on.
Critically, the report emphasizes the pitfalls of chasing inflated user metrics, a commonplace strategy across blockchain ecosystems. High user numbers frequently misrepresent true ecosystem health, according to Flipside researchers, as many addresses are speculators, bots, or single-action participants aiming to collect incentives rather than using protocols regularly:
“The retention charts clearly highlight that only a handful of addresses contribute substantially to ongoing activity and liquidity across the main networks studied.”
This situation presents a dilemma for blockchain protocols aiming for sustainable growth. Short-term incentive mechanisms used by protocols, such as giveaways or airdrops, often attract transient users who don’t remain engaged over time. The study argues that protocols focused on inflating overall user metrics via short-term rewards ultimately waste resources that could instead be directed toward acquiring and retaining higher-quality, long-term users.
Flipside suggests that blockchain developers reconsider tokenomic designs and reward strategies, shifting away from encouraging one-time user interactions. Instead, blockchain networks would likely benefit from incentivizing sustained user engagement, building mechanisms that reward consistent, ongoing involvement.
According to the researchers, it is better in the long run for blockchains to pursue slower, steadier growth built around cultivating active, committed users, rather than chasing temporary volume driven by low-value or uncommitted accounts. The study concludes that maintaining a focus on quality, ongoing user acquisition rather than simply maximizing address counts represents the most stable and sustainable pathway to genuine blockchain adoption and longevity.
