State of Crypto 2024: Builder Energy, U.S. Election, Stablecoins, AI, More

Episode Summary

Executive Summary: A16Z’s 2024 State of Crypto report argues the industry has crossed an infrastructure tipping point: fees are lower, blockchains are more usable, and real applications are finally emerging. The team estimates 30–60 million real monthly transacting crypto users, highlights stablecoins, NFTs, AI, D-Pin, social apps, and prediction markets as growing use cases, and shows crypto’s rising political relevance ahead of the U.S. election.

Main Topics: Sizing the real crypto market (Priority: 5/5): The discussion centers on how to estimate actual human users rather than raw active addresses, using on-chain filtering and off-chain wallet data to triangulate a realistic user count. Infrastructure improvements enabling applications (Priority: 5/5): Lower fees from L2s, high-throughput chains, and Ethereum’s Dencun/4844 upgrade are framed as the key reason applications are becoming viable now. Active addresses, sybils, and measurement limits (Priority: 4/5): The hosts explain why active-address metrics are noisy due to bots, sybil attacks, and airdrop farming, especially on low-cost chains like Solana. Builder energy and ecosystem momentum (Priority: 4/5): The new Builder Energy Dashboard is used to show where founders want to build, with strong interest in Solana, Base, Bitcoin, and still-majority mindshare for Ethereum L2s. Policy, elections, and crypto’s national relevance (Priority: 4/5): Crypto search interest is analyzed across U.S. states, especially swing states, to gauge whether crypto has entered mainstream political conversation. Emerging applications: stablecoins, NFTs, AI, D-Pin, social, prediction markets (Priority: 5/5): The report argues that lower transaction costs are unlocking new consumer and marketplace behaviors, especially payments, social collecting, decentralized infrastructure, and prediction markets.

Key Arguments: Crypto infrastructure improved enough in 2024 to materially reduce transaction costs, which is enabling applications that were previously uneconomical. Active addresses are a useful but flawed metric because low fees make sybil activity and airdrop farming easier; human-user estimates require triangulation from multiple methods. The team estimates 30–60 million real monthly transacting crypto users globally, far below total active addresses but enough to show meaningful adoption. Stablecoins have found product-market fit not as pure payments in earlier years, but now increasingly as payments again because fees have fallen to pennies or less. NFTs did not disappear; their use shifted from expensive speculative trading to low-cost social collecting and cultural expression. Builder interest is following usage trends, with more interest in Solana, Base, and Bitcoin, while Ethereum and its L2s still hold the majority of builder mindshare. Crypto’s political relevance is rising, with Google Trends indicating growth in crypto-related search interest in key swing states since 2020. The approval of Bitcoin and Ethereum exchange-traded products broadens access and legitimizes crypto as an investable asset class, though distribution and inflows may take time to scale. The next stage of crypto growth depends less on core infrastructure and more on filling the new blockspace with useful applications. AI and crypto appear to have significant audience overlap, suggesting frontier-tech users are converging across categories.

Data Points: Bitcoin white paper release date: October 31st, 2008 - Used as the historical starting point for the 16-year crypto arc discussed in the episode All-time high active addresses: 220 million - Monthly active addresses across tracked blockchains reached a record high All-time high mobile wallet users: 27 million - Mobile wallet users, derived from app-store data, hit a record high Estimated real monthly transacting crypto users: 30 to 60 million - A16Z’s internal estimate of actual human users, triangulated from multiple methods Share of monthly active addresses that are real users: 14% to 27% - Derived from 30–60 million real users versus 220 million active addresses Share of crypto owners who transact monthly: 5% to 10% - 30–60 million real users compared with 617 million reported crypto owners Reported crypto owners globally: 617 million - Referenced as a benchmark for comparing active transacting users MetaMask monthly active users: 30 million - Publicly reported figure used in the wallet-based estimation method Estimated MetaMask transacting users: 10 to 15 million - Based on assumptions about the share of MetaMask users who actually transact Solana active addresses: about 100 million - Identified as the chain with the most active addresses, though likely inflated by low-cost bot activity Base active addresses: 22 million - Highest among Ethereum chains discussed in the report Ethereum active addresses: 6 million - Compared with Base to show relative ecosystem growth Bitcoin active addresses: 11 million - Presented as more credible on face value because Bitcoin transaction costs are not near zero USDC transfer on Ethereum in 2021: about $12 - Average gas cost before later infrastructure improvements USDC transfer on Ethereum after EIP-4844: about $1 - Illustrates reduced cost after the Dencun/proto-dank sharding upgrade USDC transfer on Base: less than a cent - Shows how L2s can make payments effectively negligible in cost NFT trading volume change: 90%+ decrease - Describes the collapse in speculative NFT secondary-market activity from prior years Builder interest in social projects: 10% - Share of founders/builders said to be working on social-related projects States with notable crypto interest growth: Pennsylvania and Wisconsin ranked 4th and 5th - Based on Google Trends growth in crypto-related search interest from 2020 to 2024 Michigan crypto interest rank: 8th - Mentioned as another swing state with elevated search interest Google Trends method: Population-adjusted relative search interest - Search interest was analyzed as a percentage of total searches in each state Election-related product: Bitcoin and Ethereum exchange-traded products approved in 2024 - Described as a major policy and market-access milestone

Pivotal Quotes: "we think there are 30 to 60 million real monthly transacting crypto users today" — Darren Matsuoka: The core estimate of real human users after triangulating on-chain and off-chain data "2024 was the year that stable coins found product market fit" — Eddie Lazarin: Explaining why lower fees and better infrastructure changed stablecoin usage "the heartbeat of the crypto industry is, of course, all of the builders who are building the products and infrastructure to make this all work" — Eddie Lazarin: Framing the importance of builder activity and the new Builder Energy Dashboard

Implications: Crypto appears to have moved from infrastructure-building into application adoption. Users, builders, and policymakers are all engaging more seriously, but future growth depends on converting owners into transactors and turning cheaper blockspace into durable products.