A new report from Andreessen Horowitz (a16z) highlights gaming and social applications as the dominant use cases for cryptocurrencies in 2024. The “State of Crypto 2024” report also reveals that decentralized finance (DeFi) has the largest number of daily active addresses, accounting for 34%, with stablecoins following closely at 32%. Infrastructure ranks third, making up approximately 14% of active addresses.
This cycle has seen continued growth, with monthly active addresses reaching an all-time high of 220 million, reminiscent of early internet adoption. Among these addresses, Solana and Base are the most active networks, with Ethereum Virtual Machine (EVM) chains accounting for 52 million addresses, while other chains collectively account for 174 million.
Breaking down the data further, only about 10% of crypto owners are currently active users, translating to an estimated 30 to 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 is how I think we grow the use of crypto in ways that are very promising,” said Daren Matsuoka, a data scientist at a16z. The goal, Matsuoka continued, is to bring more people on-chain and convert passive holders into active crypto users.
Venture capital has heavily invested in infrastructure, which is now showing signs of maturity, according to a16z data. This growth is creating positive ripple effects across related areas, with blockchains now processing over 50 times as many transactions per second as they did four years ago. “The infrastructure is just now starting to get to the point where we can scale these blockchains and unlock new types of applications and new emerging behaviors,” Matsuoka explained. He pointed out that stablecoins, for example, have found product-market fit largely due to lower transaction fees.
Additionally, DAO treasuries have accumulated billions of dollars, which could be utilized for network improvements. As the infrastructure matures, it creates opportunities for more innovative uses of blockchain technology.
Looking ahead, a16z believes that legislation will be a key topic for both 2024 and beyond, with institutions increasingly viewing crypto as a potential component of a diversified portfolio, beyond just Bitcoin and Ether. “The price-innovation cycle will continue to drive the crypto market. When prices go up, people get interested, developers build, and new products push the industry forward,” a16z noted.