Cross-chain bridge user data analysis for Q1 2022
1. Number of Users of mainstream cross-chain projects in Q1
(1) Multichain: great fluctuation, a decline since late January, but still among the industry's highest
From the beginning of 2022, the daily user address count oscillated. January experienced two peaks. The first was recorded on January 4, when the number of user addresses reached 16.35K, and after a few days of decline, the address count hit a low of 9.02K on January 10. After that, the number of Multichain user addresses continued a downward trend and remained at a relatively low level compared to previous days. On March 16, the number of addresses was 5.67K, down 70.13% from the highest point.
Chart 1. Multichain Address Count for Q1 2022
(Source: Multichain, https://anyswap.net/charts )
(1) cBridge (Celer-Network): stable at a low level in Q1
So far in 2022, the highest number of active users of cBridge on any day has been less than 70. cBridge achieved a peak of 67 users on February 3, and for the rest of Q1, the number of active users remained stable at a low level.
(Source: https://dune.xyz/koq6/Celer-Network(CELR)-token-analytics)
(2) Connext: decrease in weekly transaction number
Connext user data is not available, but its weekly number of transactions has been decreasing. In total, 13,470 transactions were realized from March 6–12, a 54.1% decrease compared to January 9–15. The number of transactions was generally proportional to the number of users: when the number of transactions was down, the number of users dropped.
(Source: https://connextscan.io/)
(3) Synapse: a sharp decline in overall transaction number, but seeing a recent rise
So far in 2022, the number of transactions on Synapse has been declining, with 1,548 transactions made on March 10, down 2,952 or 65.6% from January 16. The spike in the number of transactions recorded on March 10 as a result of Synapse’s support for bridging USDC to Metis (@MetisDAO) from all connected chains. With Synapse Protocol’s recent announcement of upcoming support for Terra, the number of transactions is expected to rise at a later stage.
(Source: https://analytics.synapseprotocol.com/)
(4) THORChain: declining first, rising then around March 10
In Q1, the number of daily active THORChain users trended down and then rose again. The turning point came around March 10, when the release of THORChain’s synthetic assets (“Synths”) coupled with other upcoming features seemed to rekindle interest in THORChain.
(Source: dune.xyz)
2. Market-side analysis
(1) The cryptocurrency market remains bearish as fears stand
Bitcoin and other cryptocurrencies are still at relatively low levels, especially compared to the all-time highs of late 2021. According to CoinMarketCap data, there has been an overall downward trend since the beginning of 2022, whether or not bitcoins are included in the determination of the total market cap.
The cryptocurrency market has been slightly ‘boosted’ by the Russia-Ukraine conflict, as Russia turned to cryptocurrencies after being subjected to economic sanctions by Western countries, and aid to Ukraine are being provided in the form of virtual currencies. However, these developments are not enough to influence the overall crypto market trend. Users are not incentivized enough to enter the crypto asset space yet, and investors may be reluctant to take high risks and thus have turned to other safer assets.
The token prices of most cross-chain projects are also declining.
(Source: CoinMarketCap，https://coinmarketcap.com/watchlist/6233f458731c5675c3810560)
In the DeFi and NFT markets, user demand for trading or cross-chain was not as strong as before, leading to a decrease in TVL or trading volume. In fact, the daily TVL of DeFi and the daily trading volume in the NFT market also went downward to varying degrees in Q1.
(Source: Defi Llama，https://defillama.com/ )
In the DEFI market, Ethereum has cornered close to 60% share. For data availability reasons, this analysis focuses mainly on the Ethereum market.
The market share of TVL by chain can be found at:
(2) Number of ETH unique addresses has been dropping in the last six months
According to Glassnode data, the number of ETH unique addresses has been going down since November 9, 2021. In particular, the number of new unique addresses experienced a 62.38% drop from October 28, 2021 to March 13, 2022.
The downward trend is also seen in the number of ETH active unique address users. On March 14, 2022, the number of active unique address users was down to 528,225, a 15.1% decrease compared to November 4, 2021. In fact, the number of unique address users as a whole has also shown an obvious downward trend since May 2021.
(Source: Glassnode)
The number of unique addresses such as BTC, LTC, and stable coins (BUSD, GUSD, HUSD) has also experienced a downward trend in the last six months.
For more details, see: https://studio.glassnode.com/metrics?a=HUSD&m=addresses.ActiveCount
In addition, according to data published on dune.xyz, the number of USDT, DAI, HUSD, and BUSD users has also been declining since the beginning of 2022.
For more details, see: https://dune.xyz/johaya/stablecoin-users-trend
(3) The number of active DeFi users is descending
Overall, the number of monthly active DEX users within DeFi is decreasing month by month, and the drop in March is steeper than that in February.
Chart 2. Number of monthly active DEX users and changes
For more information on the number of monthly active DEX users, see: https://dune.xyz/jefftshaw/Balancer
(4) The number of ETH cross-chain bridge users fluctuated at a low level
According to data published on dune.xyz, the number of ETH cross-chain bridge project users has fluctuated at a low level in the last three months. Overall, it has been a flat trend. Currently, the number of daily unique deposit users on ETH Crosschain Bridge is at an all-time low. The number of users with demand for Crosschain has declined substantially compared to the peak in July 2021.
(Source: https://dune.xyz/eliasimos/Bridge-Away-(from-Ethereum )
3. Summary
The above analysis suggests that the drop in the number of cross-chain bridge users has been affected by several factors, especially a bearish market. In a down market, the number of users naturally drops. So be prepared to experience a bear market for an extended period. However, even in a bear market, demand for cross-chains still exists in a multi-chain world, and the total number of users will be rising. ETH gas fees have been declining in the past three months (https://etherscan.io/chart/gasprice ). Lower transaction costs are expected to retain some of the existing crypto-asset users or attract new users.
