Gaming and social media dominate as the two big use cases for crypto, according to a new report from Andreessen Horowitz.
The State of Crypto 2024 report also found that DeFi has the highest number of daily active addresses, although stablecoins come in a close second – 34% to 32%. Infrastructure comes in third place, with around 14%.
This cycle is also seeing continued growth, with monthly active addresses reaching an all-time high of 220 million and representing “growth reminiscent of the early adoption of the Internet.” Of these addresses, Solana and Base are the most active, with EVM chains accounting for 52 million addresses, while other chains have 174 million.
Learn more: A16z bets on the Solana game
Breaking this down further, only about 10% of crypto owners are currently active, which translates to between 30 and 60 million monthly active users.
“There are a lot of people who are just passive holders, but if we can convert them into active users… That’s how I think we’ll grow the use of crypto in a way that we think is very promising for the future,” Daren Matsuoka, data scientist at a16z, told Blockworks.
The goal would be to bring people onto the chain and “convert these crypto owners into active crypto users,” he continued.
Learn more: Is crypto’s “ChatGPT” moment almost here?
Venture capital has invested heavily in infrastructure and, according to a16z data, the sector is now showing signs of maturity. This growth creates positive ripple effects in related areas. For example, blockchains process more than 50 times more transactions per second than just four years ago.
“The infrastructure is just starting to get to the point where we can scale these blockchains and unlock new types of applications and new emerging behaviors. I think two good examples are just for stablecoin. We’ve seen stablecoins find their way into the product market, and I think a lot of that is due to lower transaction fees. Stablecoins are a great product when fees are low,” Matsuoka explained.
On top of that, DAO treasuries have stored billions that could help improve the network.
As for what’s next, a16z thinks legislation is on the table for 2024 and beyond. The institutions are there, and “crypto could be part of a diversified portfolio” for this group of investors – beyond bitcoin and ETH.
“The price-innovation cycle will continue to drive the crypto market. When prices rise, people pay attention, developers build, and new products move the industry forward,” wrote a16z.
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