Blockchain Networks Bleed Users: 4 in 5 Low-Value Wallets Go Inactive

The Flipside Study: User Exodus? Blockchain Networks Bleed Users

Four out of five low-engagement accounts on blockchain networks become inactive within three months, according to a Flipside study, indicating that these networks are losing casual users. The study exposes a harsh reality concerning blockchain ecosystems: the majority of consumers quickly lose interest. There is minimal user retention, according to data from Flipside, which examined user behavior across networks like Solana, Ethereum, Arbitrum, and Avalanche.

Flipside closely examined how wallets change over time. Using their previous on-chain activity rankings, they divided users into three groups: low-value (scores 0-3), medium-value (4-7), and high-value (8+). They then tracked the number of groups that remained active by checking each one monthly for six months.

Flipside Report: Blockchain Fails to Keep Casual Users Engaged

The statistics clearly demonstrate that the first month is cruel. Wallets with little to no prior activity or low-value users disappeared almost instantly. Consistently exhibit the lowest retention, dropping below 5% after six months, according to the research. To put it simply, 95 out of every 100 of these wallets disappear within six months.

While high-value users decrease more gradually, losing only 5–8% of their numbers each month, medium-value users—regular but not power users—do better, though they still drop precipitously in the beginning before stabilizing.

Bots, Speculators, and Airdrop Hunters: Why Don’t Most Crypto Users Stick Around?

The analysis highlights a prevalent issue in the cryptocurrency space: networks aim for large user bases, yet the majority of those users eventually leave. Many are bots, speculators, or airdrop hunters who are only passing by. It is evident from the data that only a small percentage of addresses generate genuine, consistent activity.

If we zoom in on the retention charts, you can see it extremely clearly: only a handful of addresses are contributing any sustained activity or liquidity volume across the major chains studied.

Flipside

In order to demonstrate quick acceptance, blockchains prioritize boosting user counts, which leads to a conundrum. The growth isn’t genuine, though, if the majority of those users stop using it. Even if it meant slower headline growth, the research makes the case that protocols would be better served focusing on high-quality users from the beginning.

For more up-to-date crypto news, you can follow Crypto Data Space.