Blockchain networks face major retention challenges, according to Flipside.

A new study by blockchain analytics firm Flipside has revealed a stark reality for the crypto industry: the vast majority of new users abandon blockchain platforms within just three months. According to the report, 80% of low-engagement wallets go inactive within 90 days, raising serious questions about user retention across major blockchain networks.

The study examined user activity across leading platforms including Ethereum, Solana, Arbitrum, and Avalanche. Researchers categorized wallets based on prior activity levels into three tiers: low-value (minimal activity), medium-value (moderate activity), and high-value (significant activity).

Over a six-month period, Flipside tracked the monthly retention rate for each group and the findings paint a concerning picture.

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Low-value users — those with little on-chain activity at the start — showed the steepest drop-off.

Within six months, fewer than 5% of these wallets remained active. Medium-value users saw moderate early losses before stabilizing, while high-value wallets demonstrated the strongest retention, with only 5-8% attrition per month.

Ethereum and Avalanche showed the best retention among high-value users, keeping 35-38% active after six months. Solana, despite its popularity, trailed behind in long-term engagement. Newer blockchains experienced the sharpest user drop-offs, suggesting that initial user growth may be inflated by speculative or opportunistic actors rather than genuine adopters.

User metrics mislead ecosystem growth

The report highlights a growing issue in the crypto space: the reliance on inflated user metrics. Blockchain networks frequently tout large active user counts, but these numbers are often driven by one-time events like airdrops, appetite for speculation, or bot-driven interactions. In reality, only a small fraction of users generates consistent activity or contribute meaningful liquidity.

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Instead, Flipside suggests a shift in strategy. Successful protocols, the report argues, will be those that focus on acquiring and retaining high-quality users through targeted incentives and long-term alignment.

Strategic recommendations

Based on its findings, Flipside offers three key recommendations for blockchain networks aiming to build sustainable growth:

1. Targeted incentives: Invest in retaining high-value users for a stronger return on investment.
    
2. Quality over quantity: Focus on attracting fewer, more engaged users rather than chasing mass adoption metrics.
    
3. Long-term engagement: Design tokenomics and reward systems that encourage sustained interaction, not one-off actions.

As the blockchain industry matures, the study urges a reevaluation of how success is measured. Rather than celebrating inflated user counts, the report suggests that ecosystems should focus on building long-term relationships with users who bring real value.

In a space often driven by hype and speculation, these findings offer a sobering reminder: lasting adoption depends not on how many users a blockchain can attract — but on how many it can keep.