14 Feb 2022
Measuring Ethereum adoption
Despite the exponential growth of DeFi over the past year, we’re still early in the on-chain adoption cycle—DeFi users only represent around 2.3% of total unique Ethereum addresses.
The total number of unique addresses on Ethereum is currently 188 million. However, because an individual can create as many addresses as they want, this number is significantly flawed as a measure of Ethereum adoption.As illustrated on the chart, only 4.4 million addresses have ever interacted with DeFi apps on Ethereum—a number that again likely is overstated given that users have multiple addresses.The main reason why few people are using on-chain apps is likely caused by a majority of traders buying crypto through centralized exchanges to speculate rather than using on-chain apps.More people are buying into mainstream media's “quick money” narrative; they are not necessarily adopting the technology. Persistent high gas fees are not helping either.However, while the number of DeFi users remains small, over $123 billion in total value is currently locked in DeFi protocols on Ethereum, suggesting that larger players are driving the adoption.