Web3 analytics is essential for startups aiming to thrive in the decentralized economy. Unlike Web2, where user tracking relies on cookies and IP addresses, Web3 requires interpreting raw, pseudonymous wallet data to understand user behavior and drive product success. Leveraging onchain data is critical to thriving in this nascent space.
Web3 analytics enables product and marketing teams to acquire actionable insights about web3 users
In this article, we’ll explore the core challenges of Web3 analytics, practical use cases, and strategic opportunities for data-driven teams. Whether you're building onchain or marketing to Web3 users, understanding how to work with fragmented identity and onchain signals is key.
Key Takeaways
Web3 analytics helps teams understand user behavior through wallet-level, onchain, and pseudonymous data rather than cookies or personal identifiers.
Data fragmentation and the lack of a unified identity make attribution, personalization, and segmentation of onchain users more difficult.
Tools like Formo, Dune, and Nansen provide insights into user acquisition, retention, engagement, and risk.
Teams must prioritize data integrity and privacy, using anonymization, aggregation, and regulatory compliance practices.
An effective Web3 analytics strategy involves clear goals, the right tools, and a combination of in-house and external expertise.
What Is Web3 Analytics?
Web3 analytics (or onchain analytics) is the practice of collecting and analyzing onchain data from decentralized applications, smart contracts, and wallet interactions. It empowers developers, marketers, and product teams to uncover insights, make better decisions, and optimize user experiences—without relying on traditional identity markers like emails or device IDs.
The Data Fragmentation Challenge
In Web2, companies track users via cookies, IP addresses, and device IDs. In Web3, those identifiers don’t exist. Blockchains are a pseudonymous and privacy-friendly environment. Instead, all interactions happen through wallet addresses, which are pseudonymous by design.
Side-by-side comparison of data in web2 and web3
Web3 complicates the capture of consumer behavior, making attribution and personalization more difficult for product and marketing teams. Tracking individual user journeys, attributing conversions, personalizing experiences, and building customer segments is difficult for onchain users and apps.
Web2 vs Web3 Data Collection
In Web2, platforms like Amazon track clicks and actions using cookies and device IDs, linking data to user accounts. This allows precise personalization and targeting.
In contrast, Web3 platforms like OpenSea and Uniswap operate without KYC or centralized identity. Users interact through wallets, and often use multiple wallets for different purposes. This makes it difficult to attribute behavior or understand complete user journeys.
Example Web2 user flow analytics
Example Web3 user flow analytics
Fragmentation of Identity
In Web3, transaction data is public, but identity is private. Most dApps don’t require KYC, preserving user anonymity. In addition, Users may have multiple wallets for different purposes, making associating wallets with a single identity difficult.
As a result, Web3 analytics relies on pseudonymous signals like wallet balances, DeFi position, token ownership, and onchain user behaviour instead of personal identifiers. What you do is who you are.
Why Web3 Analytics Matters
Web3 analytics helps project teams make informed decisions, build better user experiences, and reduce risk. By understanding onchain behavior—such as wallet activity or token holdings—teams can identify high-value users, prevent fraud, and optimize marketing and product strategies.
Key Web3 Metrics to Track
You can get started with Web3 analytics with these common metrics:
Total Users: Number of unique wallet sign-ups
Active Users: Hourly, daily, weekly, or monthly wallet activity
New Users: New wallet connections and first-time interactions
Bots: To detect sybil attackers and airdrop hunters
Localization: Enriched offchain signals for language or region targeting
User Segments: User groups based on behavior, tokens, campaigns, and other onchain data
Account Balances: Identification of high-value users
Risk Scoring: Fraud and abuse detection
Transactions: Conversion tracking and onchain behavior analysis
Web3 analytics helps you measure and optimize your growth campaigns against real impact onchain (number of active users and onchain conversions.)
Web3 Analytics Action Plan
Step 1: Define your goals and KPIs
Start with clear business objectives—such as improving user retention, increasing wallet signups, or reducing churn.
Identify key performance indicators (KPIs) like wallet growth, TVL, transaction volumes, and conversion rates.
Step 2: Choose the right tools and platforms
Select tools that match your goals, expertise, and budget:
Blockchain explorers (e.g., Etherscan, Polygonscan, BscScan)
Analytics and data platforms (e.g., Dune, Nansen, Formo)
Data warehouses for combining onchain and offchain data (if building in-house)
Note that choosing to build your own analytics and data stack is an expensive and time-consuming undertaking. Combining onchain data with offchain zero-party and first-party data for advanced analytics is a serious engineering undertaking. Instead of building from scratch, consider using an existing tool such as Formo.
Step 3: Build or outsource expertise
Upskill internal teams or work with Web3 analytics consultants.
Upskill in-house teams: Train analysts in blockchain fundamentals, data extraction, data engineering, and onchain metrics.
Partner with Web3 consultants: Leverage the expertise of specialized vendors for faster results and strategic guidance.
Effective use of onchain data requires knowledge of smart contracts, wallet mechanics, and querying blockchain data.
Step 4: Prioritize data integrity
Validate data sources, ensure accuracy, and verify APIs. Even onchain data can contain inconsistencies or noise that must be filtered out for decision-making.
Data validation: Establish rigorous checks for consistency, completeness, and accuracy before making critical decisions.
Source verification: Ensure that data from APIs comes from reliable blockchain sources and follows proper extraction methods.
Step 5: Balance transparency with privacy
Develop responsible data practices:
Anonymization and Aggregation: Anonymize or aggregate sensitive data to protect privacy while preserving insights.
Respect user consent: Obtain explicit consent before collecting and analyzing personally identifiable information.
Stay compliant: Monitor the evolving regulatory landscape and ensure compliance.
Privacy-Friendly Web3 Analytics with Formo
Understanding onchain data puts project teams at the forefront of the web3 revolution. Web3 data analytics is critical for user growth and seizing opportunities onchain.
Measure what matters and drive growth onchain — with the growth platform for onchain apps. Formo makes analytics easy. Get the best of web, product, and onchain analytics on one versatile platform.
Formo enables Web3 teams to track onchain user behavior, optimize product funnels, and uncover actionable wallet-level insights. With Formo, companies can deliver personalized, privacy-first experiences and make confident decisions based on real onchain activity.
Formo helps product and marketing teams:
Monitor acquisition and engagement metrics
Identify and exclude bots
Segment users by wallet patterns
Maximize ROI through data-driven decision-making
Follow us on LinkedIn and Twitter, and join our community to learn how onchain growth and product teams turn data into action with Formo!
Read more:
Web3 Cohort Analysis 101: What it is and real-world examples
Web3 Funnel Analytics: Optimize Your User Journeys for Growth
Additional FAQs
1. What is Web3 analytics, and how is it different from Web2?
Web3 analytics tracks onchain activity through wallet addresses, rather than using cookies or personal data. It’s designed for onchain apps and protocols with pseudonymous users.
2. Why is Web3 analytics important for startups and product teams?
Web3 analytics empowers teams to make data-driven decisions in an ecosystem where traditional analytics falls short. It enables teams to make strategic decisions based on actual user behavior, improve retention, personalize experiences, and detect fraud—all without violating user privacy. It helps identify user segments, measure retention, detect bots, assess risk, and personalize experiences using unified offchain and onchain data.
3. What are the main challenges in Web3 analytics?
The biggest challenges are fragmented user identity (users with multiple wallets) and the difficulty of attributing behavior across platforms and chains. These factors make attribution, segmentation, personalization, and behavior analysis more complex than in Web2.
4. What tools are available for Web3 analytics?
Popular tools include blockchain explorers (like Etherscan), dashboards (like Dune), and data platforms like Formo for product analytics and wallet intelligence.
Formo is the data platform for onchain apps. Understand your users, where they come from, and what they do so you can build a better app.
5. How can teams ensure data quality and privacy in Web3?
Ensure data quality and privacy by having a clear plan, validating your data sources, anonymizing sensitive information, and staying compliant with privacy regulations.
Choose the right data platform for your onchain app. Formo makes analytics easy. Get the best of web, product, and onchain analytics on one versatile platform to measure what matters. No third-party cookies, no personal data. Just clear, privacy-friendly insights.
