Ethereum may be the king of smart contracts and the world’s leading hub for decentralized finance (DeFi) and non-fungible tokens (NFTs) activity, but onchain data suggests that Bitcoin leads the way in terms of user engagement, interpreted by the number of daily active users, and that network activity is at an acceptable, healthy level, judging by the number of confirmed daily transactions.
Bitcoin leads Ethereum in daily active addresses
According to Artemis Terminal data from September 15, despite being primarily a transactional layer, allowing the peer-to-peer (P2P) transfer of value between addresses, Bitcoin has more daily active users than Ethereum.
This observation is even because Ethereum serves as a conduit of value, as assets can be moved just like in Bitcoin, and as a smart contract platform for deploying reliable and automated decentralized applications (dapps). Some, like Uniswap, a decentralized exchange (DEX), process billions in transactions every month.
As of September 15, Bitcoin had more than 800,000 daily active addresses (DAA), more than twice as many as Ethereum, which stood at just over 378,000. The only time there was a small change was on September 13, when over 1 million addresses were activated on Ethereum.
Then the number of DAA on Bitcoin also dropped to approximately 743,000. However, the DAA on Ethereum has fallen sharply, while Bitcoin has continued an upward trajectory since late August. During this time, Ethereum’s DAA has fluctuated widely, as evidenced by its rise and fall on September 13 and continuing to this day.
Ethereum processes more than 1 million transactions every day
Ethereum shines in the number of daily transactions processed. When I wrote on September 15, the smart contract platform had processed more than 1 million transactions, while Bitcoin lagged behind, confirming fewer than 600,000.
Even at this level, Ethereum has processed less than half of what it did on September 13, when the network processed more than 2.3 million transactions. On the other hand, Bitcoin’s daily transactions are stable, while Ethereum’s have increased on average over the past three months, as shown by data from Artemis Terminal.
DAA and daily transaction volume are key metrics that on-chain analysts use to analyze the level of engagement and health of public blockchains.
Over the past 18 months, activity has shrunk rapidly as asset prices fall during the crypto winter. Ethereum’s drop from around $5,000 at the end of November 2021 to just $1,500 in 2022 weighed negatively on DeFi and NFT activity.
According to DeFiLlama, the total value locked (TVL) of DeFi protocols stabilized below $50 billion, down from around $180 billion in 2021. Meanwhile, trading volume has fallen by more than 90%, driving down the value of NFT-related projects including Immutable X and ApeCoin. To illustrate: APE is down 96% from peaks.
Feature image from Canva, chart from TradingView