Question

How does Flow compare to other L1s in terms of user retention? Is a user who made a transaction previously likely to make another transaction a week or a month later? Compare and contrast this type of activity vs other L1s like Solana and Ethereum.

Methodology

• Look into the number of unique users, total transactions, and running average of Ethereum, Flow, and Solana to see how these different layer 1 blockchains are performing

Introduction / Glossary

What is Flow?

Flow is a blockchain that is specifically created for making NFT's, crypto video games, and other apps as well. It is a proof of ` blockchain that is designed to be the foundation of Web3. This included the metaverse, decentralized apps, DAOs and much more! Flow is made specifically to scale for the hope that possibly billions of people can participate on this blockchain.

What is Solana?

Solana is another blockchain like Ethereum that comes with smart contract functions. What truly makes Solana unique is the amazing speed and scalability that it has. It is one of the few blockchains to be able to process over 1000 transactions per second. It comes out to being nearly 4,000 times fast than Ethereum, and almost 10,000 times faster than Bitcoin. It is also known for having significantly lower fees than many other blockchains.

What is Ethereum?

Ethereum is a decentralized blockchain platform that establishes a peer to peer network that securely executes and verifies smart contracts. These different smart contracts allow participants to buy and sell within the blockchain without using a central authority.

Flow User Retention Analysis

The above graphs are going to indicate how well Flow is doing at holding onto their users. The first observation that I made is that Flow is not doing a good job at retaining users. The first graph will show how the 3 day average and 2 week averages compare of unique users on a daily basis. The goal of the two different averages is the 3 day will show spikes in activity, while the 2 week average will show the trend line. Although there are some spikes the trend line is downward. The same information is indicated on the graph directly to the right as the total transactions per day is also on a downward slope as well. The third graph is going to show similar information to the second on how the total transactions per day on a 3 day running average would look. We can clearly see that it shows the same trend as moving at a downward trajectory. There is no indication at all that Flow is currently retaining their users.

Ethereum User Retention Analysis

These graphs are going to look into Ethereum, one of the most well known layer 1 blockchains, and see how well it has performed at retaining their users. The first graph will show that there has been a decrease, but that the decrease is very small. Especially when compared to the users of Flow there is a major difference between these two blockchains. The 2 week running average trend line will show that it is moving downward, but barely. This is most likely due to the bear market the entire crypto space is experiencing right now. The graph directly to the right will show total transactions per day and as you can see it is very steady. Although there was a downward trajectory recently the number of transactions resembles the beginning of the year currently, rather than the middle of the year, which was at a downward slope. The final graph will show the 3 day running average of total transactions and that confirms the last statement made. As you can tell there was a small decrease in the middle of the year, but overall Ethereum has been very steady and the number of transactions and users has stayed relatively the same, which is major especially in the current market conditions.

Solana User Retention Analysis

The final blockchain we are going to be looking into is Solana. The first observation that I made was that Solana seems to actually be increasing the number of users that they have. The first graph will show that they have had spikes of unique user transactions. It seems that Solana was actually having improvements until the bear market hit and at that point the number of unique users everyday began to regress. This being said they have still grown since the beginning of the year dramatically. The next graph is very interesting because it shows that the total number of transactions per day has decreased even though the other graph shows that the amount of unique users has increased. What this would indicate is that there are more people consistently using Solana than a couple people using it a lot. This is overall what you want on a blockchain because it indicates that new users are coming on consistently. There is a very low chance that a new user is going to make a lot of transactions when they first join a blockchain. The final graph is going to show the 3 day running average of total transactions and it shows that during the middle of the year there was a decrease in total transactions, but oddly enough Solana has had more transactions as the bear market lasted than having a decreasing amount.

Conclusion

1. User Retention:

   1. Flow is not doing a good job of retaining users during the year
   2. Ethereum has done a good job of retaining most of their users during the year
   3. Before the bear market Solana was actually increasing the number of users and has retained more users during the bear market than they had at the beginning of the year

2. Transactions:

   1. The number of transactions on Flow resemble the number of users who they have retained as the blockchain is struggling to retain both
   2. Ethereum is very consistent and although the first quarter showed a decline in the number of users the second quarter shows an increase
   3. Solana had a major decrease in transactions until the bear market hit and since then the number of transactions on the blockchain has increased dramatically close to where the blockchain was at the beginning of the year