Top Crypto Investments by Daily Active Users

At Bitcoin Market Journal, we invest in crypto tokens as if they were stocks. While there are important differences between the two, we analyze crypto “companies” like traditional companies, and diversify our investments with a mix of both. More on our approach here.

Key Takeaways:

DAU measures the number of daily active users engaging with a crypto project. It’s similar to “repeat customers” of a traditional company, indicating whether a crypto project has product/market fit. Some of the top crypto projects by DAU include Solana, TRON, Ronin, Polygon, and BNB Chain.

While there are many ways to evaluate the potential success of a crypto project, looking at daily active users (DAU) is one of our favorite metrics.

Daily active users refers to the unique number of public addresses transacting on a blockchain per day.

Imagine you run a restaurant. Even if your restaurant has the best location and highest quality food, you’re not going to be very successful unless you get customers through the door – and keep them coming back for more.

Daily active users are like the “repeat customers” that keep coming back. If a crypto project has a high DAU, this is a good indication that it’s found product/market fit: users find value in the project and return to it frequently.

You can report on DAU in real time, which is why the intelligent crypto investor looks at this metric closely before investing. In this report, we show you which crypto projects are driving the most DAUs.

Top Crypto Investments by Daily Active Users

Solana: Solana currently has an estimated 4.9 million daily active users, a staggering number compared to its competitors. Thanks to its low fees and fast transaction speeds, Solana has come to play a pivotal role in the DeFi landscape. For many, it has become the go-to DeFi platform for developers hoping to revolutionize the traditional financial world.

Solana’s daily active user numbers saw a significant increase in the past year due to several factors, including the growing popularity of memecoins such as $WIF and $BONK, which has led to an increase in transaction volume and user engagement within the Solana network.

Additionally, Solana has continued to focus on development. For example, the introduction of the “Firedancer” validator client, which seeks to improve scalability by processing millions of transactions per second, has attracted attention to the platform.

There has also been a resurgence in interest in DeFi and NFTs, further helping contribute to Solana’s increase in DAUs.

Download our investor scorecard for Solana here.

Tron: Tron boasts an estimated 2.1 million daily active users. While this puts it significantly behind Solana, Tron also offers a number of unique benefits as an alternative layer-1 platform.

Like Solana, Tron offers low-cost and fast transactions. But while Solana focuses on DeFi, Tron has carved out a focus on the entertainment industry. One of its goals is to allow creators to share content directly with fans, bypassing intermediaries like YouTube or the Apple Store.

Much of Tron’s spike in activity can be linked to movements in the derivatives market, which have influenced on-chain activity and TRX’s token price. This has created short-term spikes in DAUs as users engage in trading and other speculative activities

There has been some regulatory uncertainty around the Tron ecosystem, with concerns about centralization within its DeFi apps like JustLend. Additionally, there has been ongoing scrutiny of Tron’s founder Justin Sun, charged with fraud and selling unregistered securities in 2023.

Overall, these factors have created a year of sharp ups and downs in DAUs, though the overall trend has been positive.

Download our investor scorecard for Tron here.

Ronin: Ronin has 1.7 million daily active users. One of the primary reasons is Axie Infinity, an extremely popular blockchain-based games. The game experienced explosive growth due to its pay-to-play model, where players can earn income by playing online games.

Over the past year, Ronin has experienced some volatility in terms of DAUs. One of the main reasons Ronin has experienced spikes in user activity is because of the migration of popular Web3 games, such as Pixels, to the Ronin network in early 2024.

After the migration, Ronin saw a huge increase in player activity, which drove a surge in its overall user base. Other games such as Lumiterra and Apeiron attracted users through beta tests, new releases, and in-game rewards, further contributing to fluctuations in DAUs.

However, Ronin plans to integrate zero-knowledge Ethereum Virtual Machines (zkEVM) into its blockchain infrastructure in early 2025, making it Ethereum-compatible. This could help stabilize user numbers.

Download our investor scorecard for Ronin here.

Polygon: Polygon’s daily active users have averaged approximately 800k over the past year, with significant variation. This fluctuation in active users points to the volatile nature of activity on the network, with notable spikes and drops.

Polygon faces strong competition from other layer-2 solutions. Additionally, Polygon recently restructured its tokenomics and moved from MATIC to the new POL token. The transitions changed the way validators are rewarded on the blockchain, which has likely added uncertainty to the ecosystem as users adapt to the new model.

Polygon has also undergone some major technical upgrades in the past year, such as the introduction of Polygon zkEVM, a layer-2 scaling solution, in March 2024. Upgrades such as these usually attract users during the initial launch period, but can cause fluctuations once the hype fades.

Download our investor scorecard for Polygon here.

BNB Chain: BNB Chain currently has around 900K daily active users, also due to the platform’s low transaction fees and high transaction fees. As you can see in the chart, BNB Chain’s DAUs spiked in January 2024, then saw a significant drop in the next month and have since leveled off.

The platform has a robust suite of AI and GameFi projects, which likely helped drive some of the growth. However, the subsequent decline was likely due to a drop in demand for dapps, leading to a lower transaction volume and fewer active wallets. Since the drop, BNB Chain has hovered around 1 million DAUs, showing that it’s still a competitive crypto project.

Download our investor scorecard for BNB Chain here.

How to Invest Using Daily Active Users

Incorporating daily active user statistics into your investment decisions can provide you with valuable insights into the potential future growth of a crypto project or blockchain.

DAU growth over time can indicate growing adoption and interest in a project. If the DAU growth remains consistent over time, it’s likely that the project has strong fundamentals to back it up.

However, it’s also important to pay attention to sudden DAU spikes, as they may be driven by things like marketing campaigns, new product launches, or new partnerships. We recommend investigating the cause of the spike to understand if it’s sustainable or short lived.

It’s also important to compare DAU statistics across competitors, as this will help you gauge a project’s position in the market. You can take it a step further by comparing projects with similar features (such as NFT marketplaces or DeFi protocols) to understand which platforms are gaining traction.

We also recommend tracking the relationship between DAU and token price. If the DAU is consistently increasing but the token price is not, it could be an indication that it’s a good time to buy, as user demand may eventually drive up the price of the token.

Also, don’t forget to look at the quality of user activity, as high DAU alone is not enough to indicate if a project is worthy of your investment. For example, if a project has a high DAU but low transaction volume, it could indicate a superficial level of engagement.

Lastly, don’t forget that DAU is just one piece to the puzzle. You should also spend time analyzing other metrics, including the market cap, trading volume, and total token supply.

Investor's Takeaway

Looking at daily active user numbers can help you make more informed and potentially more profitable investment decisions. DAU can indicate growing interest in a project and demonstrate that a project has strong fundamentals behind it. If you compare the DAU to token price, you may be able to figure out which coins are about to be in high demand so you can buy before the price spikes.

Of course, DAU figures can also be slightly misleading, as a big spike might just mean there’s a lot of current buzz around a project, so make sure to look at the trends over time to understand whether the number is a fluke or not.

Currently, Solana, Tron, Ronin, Polygon, and BNB Chain are all showing strong DAU figures, so we recommend looking into these projects if you’re looking to expand your portfolio. Additionally, be sure to subscribe to Bitcoin Market Journal to stay up-to-date on the most recent crypto developments.

 

This analysis is to help make you a better-informed investor; it is not financial advice. Please use this as inspiration to do your own research, because the future may look different than the past. All investing involves risk; see our investing approach for how we manage risk through diversification. Never invest more than you’re willing to lose, and see losses as learning.

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