The Number of DeFi Users: A Difficult Answer

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How many DeFi users are there? A simple question, with a surprisingly difficult answer. I did some digging, and ... there aren't that many: 🤓

This Dune dashboard by rchen8 has been frequently cited on Twitter. There have been 7.2 million cumulative users over time, assuming the data is accurate.

Monthly unique user data provides a more informative perspective. DeFi had 592k user last month. With 1.08M users May 2021 was the record month. But these two dashboards only consider DEX trading data.

There's a DeFi user per protocol dashboard by 1-Inch co-founder @k06a. According to it, the top 5 dApps by cumulative users are: • Uniswap ~5M • 1Inch ~800K • 0x API ~750K • Sushiswap ~599k • Compound~386K

All the above dashborads only account for users on Ethereum. Yet the top 5 DeFi chains by active daily users are: • Tron • BNB Chain • Ethereum • Polygon • Arbitrum This data includes token transfers, so the actual number of DeFi users is obviously much lower.

Token Terminal provides perhaps the most insightful data on DeFi users. Here, we can filter transactions by sector. I've chosen DeFi-related services: bridges, derivatives, DEXes, lending, liquidity provision, insurance, asset management, and launchpads.

So, PancakeSwap has the highest number of daily active users - 90k! Note: 5 out of the 12 dApps listed are not Ethereum-based protocols. So, the 7.2M total DeFi users mentioned in the second tweet aren't accurate, as non-Ethereum dApps are excluded.

According to Token Terminal, DeFi has 260k daily active users. Or 388k, adjusted for a 30-day average. This number is actually lower than the 592k MAU displayed on rchen8's Dune dashboard (which only includes DEX traders on ETH). As you can see, calculations are tricky😅

But there's a significant caveat: It's assumed that 1 address = 1 user. I bet you have multiple active addresses. Personally, I've used over 100 Ethereum addresses in the past year alone. So, the true number of DeFi users is lower than most analytics suggest.

Btw, Token Terminal methodology follows a similar reasoning as Coinbase's MTUs: 'MTUs represent our transacting base of users who drive potential revenue generating txs on our platform. MTUs engage in txs that generate both transaction & subscription & services revenue.'

For comparison, Metamask reports 21M active monthly users (DAU). So, even with 500k DAU, DeFi is relatively small. To attract more users, we need further innovation in DeFi that goes beyond speculation. With improved user experience, DeFi has room to grow! twitter.com/DefiIgnas/status/1641058491501805568

Finally, consider that ChatGPT has surpassed 1 million users in just five days. Currently, they have an estimated 100 million active users. Regardless of the actual DeFi user count, we are still early.