Getting active users demands a collaborative effort across marketing, product, and user support. Key engagement metrics—Daily, Weekly, and Monthly Active Users (DAU, WAU, MAU)—measure user interaction and reflect your product’s value. This guide explains how to calculate and interpret these metrics, leverage insights for growth, and apply 8 strategic tactics to boost Web3 user engagement.
What is an Active User in web3?
A Web3 active user is someone who meaningfully interacts with a decentralized app (dApp) within a given timeframe. Different platforms set their own engagement criteria, typically including Web2 social media interactions, transactions, and other onchain activities.
Key Active User Metrics
Daily Active Users (DAU): Unique users engaging daily, often estimated as MAU ÷ days in the month.
Weekly Active Users (WAU): Unique users engaging within a week, calculated similarly but weekly.
Monthly Active Users (MAU): Unique users interact monthly, counted only once despite repeat visits.
Tracking these metrics helps monitor growth, engagement, and retention. Since each dApp serves a different purpose, engagement frequency varies—while others thrive on occasional use, some require constant interaction. By measuring these metrics, Web3 product and marketing teams can uncover user interests, optimize experiences, and drive long-term adoption.
Why Track Active Users in Web3?
Tracking active user metrics is critical for understanding engagement, retention, and conversion rates. While high engagement is great, it doesn’t always translate to success, especially in freemium models. If users are active but not converting, there may be issues with monetization. Sudden drops in active users can also indicate technical problems, such as server issues or poor UX.
Understanding Retention & Stickiness
Monitoring DAU and MAU together helps measure retention. If DAU is high but MAU is low, users visit but don’t stay — a sign of poor stickiness.
To address this, analyze:
Drop-off points: Where do users stop engaging?
User feedback: Are there friction points in the UX?
Technical issues: Are bugs causing frustration?
Support gaps: Do users struggle without guidance?
Retention is a leading indicator of long-term success, making it important to track and improve.
Measuring Growth Over Time
Tracking DAU, WAU, and MAU over time helps identify:
Adoption trends: Are new users sticking around?
Seasonality effects: Are usage patterns cyclical?
Early churn signals: Is engagement gradually declining?
Keeping historical data allows for proactive adjustments before user drop-offs become a major issue.
Identifying Friction in Trial-to-Paid Conversions
If active users increase but paid conversions remain stagnant, there may be a monetization bottleneck. Possible reasons include:
The trial period is too short: Users don’t experience full value.
Poorly timed upgrade prompts: Nudges aren’t aligned with user intent.
Unclear value proposition: Users don’t see why they should pay.
Instead of guessing, leverage data insights. Run surveys, analyze user journeys, and A/B test different upgrade strategies.
Web3 DAU, WAU, MAU: Industry Benchmarks
Sequoia Capital suggests a DAU/MAU ratio of 10-20% as standard, with few companies exceeding 50%. Traditional benchmarks may not apply directly to Web3. Instead, focus on:
Onchain activity trends: Compare daily, weekly, and monthly transactions per wallet.
Token incentive structures: Are airdrops or staking rewards driving engagement?
Network effects: How does governance participation influence activity?
Rather than chasing Web2 benchmarks, set Web3-native KPIs based on your unique projects.
How to Measure Active Users in Web3
Measuring active users involves tracking engagement (how users interact with your product) and retention (how many continue using it over time). These insights help assess product value, stickiness, and growth.
1. User Engagement
User engagement measures how often and how deeply users interact with web pages. Useful tools include:
Web3 Funnel analysis: Tracks how users move through key steps, highlighting drop-offs.
Web3 Path analysis: Maps user journeys to identify common behaviors.
Customer engagement score: Measures frequency and depth of activity.
Web3 Funnel analysis I Formo.so
2. User Retention
Retention indicates whether users return. Key metrics include:
Churn rate: Percentage of users who stop using your product.
Customer lifetime value (LTV): Total revenue a user generates over time.
LTV to customer acquisition cost (CAC) ratio: Assesses acquisition efficiency.
Net Promoter Score (NPS): Measures satisfaction and likelihood of recommendations.
Web3 Cohort retention analysis: Groups users by signup date to analyze trends.
3. Calculating Active Users
To estimate DAU from monthly data, divide MAU by the number of days in the month.
Example: If your app has 3,000 MAU in February, estimated DAU = 3,000 ÷ 28 = 107 DAU. Web3 Analytics tools like Formo provide real-time dashboards for tracking onchain interactions, retention patterns, and conversion funnels.
8 Strategies to Increase Active Users
Marketing & Growth
1. Encourage Social Sharing
Enable users to share onchain actions (e.g., NFT purchases, governance votes, staking activities) directly on Warpcast, Lens, or X. Incentivize referrals with gas fee reimbursements, token rewards, or NFT badges to amplify organic reach.
2. Scale Content Marketing
Create SEO-friendly educational content that demystifies your dApp’s utility. Publish blog posts, Twitter threads, and Farcaster casts, then repurpose them into short videos, interactive tutorials, and community AMAs. Collaborate with Web3 influencers for added reach.
Product & Development
3. Improve UX
Simplify wallet connections, support gasless transactions, and offer multiple sign-in options (e.g., Web3 wallets + social logins) to reduce friction. Conduct UX audits to streamline transaction flows and smart contract interactions.
4. Personalize Onchain Experiences
Analyze user transactions to implement wallet personalization. Provide customized dashboard views, staking recommendations, or NFT suggestions based on past activity. AI-driven smart contracts can further tailor user interactions dynamically.
5. Implement Gamification
Introduce onchain leaderboards, staking multipliers, and NFT achievements to incentivize engagement. Reward users for completing quests, holding governance tokens, or contributing to DAOs to drive long-term retention.
6. Use Data-Driven Decisions
Identify drop-off points and iterate on features that boost transaction frequency and TVL (Total Value Locked). Continuously collect user feedback to iterate and build a product that aligns with real user needs.
7. Build a Community
Foster engagement on Discord, Telegram, Warpcast, or Guild.xyz with exclusive content, governance discussions, and token-gated experiences. Host AMAs, hackathons, and bounty programs to keep users engaged beyond transactions.
8. Automate Retention Strategies
Deploy personalized email campaigns, push notifications, and wallet messages based on onchain activity triggers. Send re-engagement messages when users unstake tokens, miss governance votes, or stop interacting with the dApp.
Summary
Tracking active users (DAU, WAU, MAU) in Web3 is just the starting point. The real value lies in leveraging that data to enhance user experiences, optimize incentives, and foster deeper engagement. By understanding where users drop off, fine-tuning reward structures, and converting engagement into long-term participation, projects can build sustainable, high-retention communities.
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How do you define active users (DAU/WAU/MAU) in Web3?
DAU, WAU, and MAU stand for Daily, Weekly, and Monthly Active Users. In Web3, an "active user" is a wallet address that performs a key on-chain action within a set period. Unlike in Web2, this is tied to pseudonymous wallets, not accounts. Define "active" based on meaningful events for your product, like a swap or contract call, not just a site visit.
What are the best tactics for acquiring active users in Web3?
Key tactics include content and SEO, community building on X and Discord, and partnerships. Referral programs and onchain quests also drive engagement. Focus on channels that deliver high-quality users who perform meaningful onchain actions. Tracking the full journey from first touch to conversion is essential.
How do you improve the user activation rate?
Improve your activation rate with a smooth onboarding experience.
Make wallet connection easy.
Provide a clear first task, like making a swap.
Use guided flows or tooltips to help users complete this action.
Offer incentives aligned with their first onchain action.
How do you measure active users (DAU/WAU/MAU)?
First, define what counts as an "active event," such as a swap or contract call.
Next, use analytics tools to deduplicate activity from multi-address users for a clearer view.
It's also key to handle multi-chain activity to track a user's full journey.
Use consistent time windows and monitor trends on a dashboard to understand growth.
How can you track on-chain conversions from marketing?
Connect off-chain touchpoints to on-chain conversions using UTM parameters or referral codes.
This links a user's first click from a campaign to an event like a swap or mint.
You can use attribution models like first-touch or last-touch to see which channels drive activity.
This approach provides clear insights to help you optimize your marketing spend.
How do you grow active users with retention loops?
Grow your active users by focusing on retention.
Build habit-forming use cases and provide recurring value through rewards or fresh content.
Use lifecycle messaging to re-engage users at key moments.
Track product stickiness with the DAU/WAU ratio to see how many weekly users return daily.
How should we set goals for active users?
Start by picking a north-star metric that reflects your core goal, like Weekly Active Users (WAU).
Establish a baseline for this metric and set a realistic target for growth.
Break down your main goal by user segment or acquisition channel.
Monitor leading indicators like activation rate and 7-day retention to track progress.
How should we build a dashboard to monitor active users?
Build a dashboard that tracks your key active user metrics in one place.
Start by defining what counts as an "active" event.
Include charts showing your DAU, WAU, and MAU trends.
Add reports for activation and retention cohorts, and segment data by chain or campaign.
Set up alerts for any unusual changes so you can act quickly.
Explore our full post for playbooks and templates.
