The a16z 2024 State of Crypto Report reveals a pivotal year for digital assets, marked by record-breaking user activity, regulatory milestones, and the rise of stablecoins as a dominant use case. As blockchain infrastructure matures and transaction costs plummet, new applications in AI, social networks, and gaming are emerging. This report not only captures the current state of the ecosystem but also highlights long-term trends shaping the future of decentralized technology.
Key Findings at a Glance
- Crypto activity has reached an all-time high
- Cryptocurrency is now a mainstream political issue in the U.S.
- Stablecoins have achieved product-market fit
- Infrastructure upgrades have drastically reduced costs
- DeFi remains a top application by usage and builder interest
- Crypto is poised to address critical AI challenges
- Scalable infrastructure is unlocking new consumer applications
1. Crypto Activity and Adoption Are at All-Time Highs
Active blockchain addresses have surged, with 220 million unique addresses interacting with networks in September 2023—more than triple the previous count. While active address metrics can be manipulated, they still reflect broader engagement trends.
Solana leads in user growth, accounting for nearly 100 million active addresses, followed by NEAR (31 million), Coinbase’s Base (22 million), Tron (14 million), and Bitcoin (11 million). Among EVM-compatible chains, BNB Chain ranks second after Base with 10 million active addresses, while Ethereum maintains 6 million.
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These shifts are mirrored in builder sentiment. According to the newly launched a16z Crypto Builder Energy Dashboard, founder interest in building on Solana jumped from 5.1% to 11.2% year-over-year. Base saw similar momentum, rising from 7.8% to 10.7%, while Bitcoin-based projects increased from 2.6% to 4.2%.
Ethereum remains the top destination for developers at 20.8%, followed by Solana and Base. Other notable ecosystems include Polygon (7.9%), Optimism (6.7%), Arbitrum (6.2%), and Avalanche (4.2%).
Mobile wallet usage hit a record 29 million monthly users in June 2024, signaling growing mainstream access. While the U.S. leads in absolute numbers (12% of total users), its global share is declining as projects geo-restrict U.S. access for compliance.
International adoption is accelerating in countries like Nigeria, where regulatory clarity and consumer use in retail payments are expanding; India, driven by mobile penetration; and Argentina, where citizens turn to stablecoins amid currency devaluation.
Despite over 600 million people owning crypto assets globally, only an estimated 30–60 million are active monthly users—just 5–10% of total holders. This gap presents a major opportunity: as infrastructure improves, dormant holders may become active participants in on-chain economies.
2. Crypto Is Now a Political Force in the U.S.
Cryptocurrency has entered the national political conversation ahead of the 2024 U.S. election. Google Trends data shows that swing states like Pennsylvania and Wisconsin rank among the highest in crypto search interest, placing fourth and fifth respectively since 2020. Michigan has seen significant growth, while Arizona and Nevada have cooled slightly.
A key driver? The approval of Bitcoin and Ethereum Exchange-Traded Products (ETPs) by the SEC—despite being registered under S-1 filings, indicating non-security status. These products have already attracted $65 billion in assets, broadening retail access.
This regulatory shift signals bipartisan momentum. The U.S. House passed the FIT21 Act with strong cross-party support (208 Republicans, 71 Democrats), aiming to provide legal clarity for crypto innovators.
At the state level, Wyoming’s DUNA Act grants legal recognition to Decentralized Autonomous Organizations (DAOs), enabling them to operate without sacrificing decentralization—a model other states may follow.
Globally, the EU’s MiCA framework is set to fully launch by year-end, establishing the first comprehensive crypto regulatory regime. The UK and EU agencies are also leading in public consultation efforts compared to U.S. regulators.
Stablecoins are central to policy debates—not just for financial innovation but for strengthening the dollar’s global role. Over 99% of stablecoins are USD-denominated, far surpassing euro-backed versions (0.2%). In fact, stablecoin issuers now rank among the top 20 holders of U.S. debt—above nations like Germany.
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3. Stablecoins Have Achieved Product-Market Fit
Stablecoins are no longer speculative instruments—they’re functional money. By enabling fast, low-cost cross-border payments, they’ve become one of crypto’s first true killer apps.
As Congressman Ritchie Torres noted: “Dollar stablecoins, powered by smartphones and blockchain encryption, could become the largest financial empowerment experiment in human history.”
Cost savings are staggering:
- Average USDC transaction on Ethereum: **$1** (down from $12 in 2021)
- USDC transfer on Base: less than $0.01
- Compare this to average international wire fees: $44
In Q2 2024 alone, stablecoins processed **$8.5 trillion across 1.1 billion transactions**—more than double Visa’s $3.9 trillion volume in the same period.
Even more telling? Stablecoin usage is decoupled from market cycles. While spot trading dips during bear markets, stablecoin transfer addresses continue to grow—indicating real-world utility beyond speculation.
By daily active address share, stablecoins account for 32% of on-chain activity, second only to DeFi (34%). Use cases span remittances, merchant payments, and savings in inflation-prone economies.
4. Infrastructure Advances Have Slashed Costs and Boosted Capacity
The scalability revolution is here. Blockchain throughput has increased over 50x since 2020, thanks to Layer 2s and high-performance chains.
Ethereum’s Dencun upgrade (EIP-4844) in March 2024 slashed L2 transaction costs by over 99% through proto-danksharding. Despite rising ETH value on L2s, settlement fees on Ethereum have plummeted—proof of improved efficiency.
Zero-knowledge (ZK) proofs are also advancing rapidly. Though verification costs have dropped, the value secured via ZK rollups continues to rise—showing increased adoption and cost-effectiveness.
While zkVMs still lag behind traditional computing performance, they open doors to verifiable, private, and interoperable computation—a foundation for next-gen dApps.
Infrastructure remains a top builder focus area, with L2s ranking among the five hottest subcategories tracked by a16z.
5. DeFi Remains Strong—and Growing
DeFi dominates both user activity (34% of daily usage) and builder interest—surpassing even infrastructure development.
Over $169 billion is locked across thousands of protocols, with key segments including lending, borrowing, and staking.
Since Ethereum’s shift to Proof-of-Stake two years ago, energy use has dropped dramatically—and staked ETH has grown from 11% to 29% of total supply, enhancing network security.
DeFi offers a compelling alternative to an increasingly centralized financial system: since 1990, U.S. bank numbers have fallen by two-thirds, with power consolidating among a few institutions.
6. Crypto Can Solve Pressing AI Challenges
AI dominates tech discourse—and crypto builders are responding. One-third of crypto projects now integrate AI (up from 27% last year), especially in infrastructure.
With AI training costs quadrupling annually, only large tech firms can afford frontier models—leading to dangerous centralization.
Blockchain offers counter-solutions:
- Gensyn: Democratizes AI compute
- Story: Tracks IP to reward creators
- Near: Runs AI on open, user-owned protocols
- Starling Labs: Verifies digital media authenticity
The convergence of crypto and AI could redefine trust, ownership, and access in the digital age.
7. Scalable Infrastructure Is Enabling New Consumer Apps
Lower costs unlock novel experiences:
- NFTs: From speculative trading to social expression on platforms like Zora
- Social: 10.3% of crypto projects now focus on decentralized social apps; Farcaster-related builds are among the hottest categories
- Gaming: Titles like Pirate Nation push rollup limits with high-frequency gameplay
- Prediction Markets: Gaining traction despite U.S. legal hurdles; Kalshi’s recent court win signals shifting tides
These use cases were impossible when gas fees topped $50. Now, they’re flourishing—heralding a new wave of consumer-grade dApps.
Frequently Asked Questions
Q: What makes stablecoins different from other cryptocurrencies?
A: Stablecoins are pegged to real-world assets like the U.S. dollar, making them less volatile and ideal for payments, remittances, and savings.
Q: Why are Layer 2 networks important?
A: L2s scale blockchains by processing transactions off-chain and settling them securely on mainnets like Ethereum—dramatically reducing fees and congestion.
Q: How is crypto influencing U.S. politics?
A: With ETP approvals and bipartisan legislation like FIT21, crypto has become a national policy issue—especially in swing states with high user interest.
Q: Can blockchain really help with AI ethics?
A: Yes—by enabling transparent data provenance, fair creator compensation, and decentralized compute markets, crypto can counter AI centralization.
Q: Are more people using crypto wallets now?
A: Yes—mobile wallet users hit 29 million in mid-2024, driven by global adoption in countries like Nigeria, India, and Argentina.
Q: What’s next for DeFi?
A: As regulation clarifies and UX improves, DeFi could integrate with traditional finance—offering open alternatives for lending, trading, and asset management.
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