Venom Foundation: Most “Active Addresses” Aren’t Real Users

Venom Foundation published a research report today examining the reliability of "active addresses," the metric most commonly used to measure blockchain adoption. The report, "Beyond Active Addresses," concludes that a substantial share of reported active addresses across major networks is generated by bots, airdrop farmers, exchange infrastructure and automated smart-contract activity, and that the metric should no longer be treated as a proxy for real users.

The report pulls on publicly available evidence and introduces Venom Foundation's own analytical framework, which scores adoption metrics by manipulation cost and maps the structural design factors that mechanically inflate address counts across major networks. It does not single out any individual blockchain; its aim is to document a measurement problem that affects the entire industry.

Among the evidence reviewed: in its State of Crypto 2025 report, a16z crypto measured approximately 181 million monthly active addresses on-chain while estimating only 40–70 million real monthly users behind them. In January 2025, Ethereum layer-2 network Linea, working with analytics firm Nansen, flagged approximately 40% of its 1.3 million airdrop-eligible addresses as likely Sybil accounts, even though every address had already passed Proof of Humanity verification. A year earlier, cross-chain protocol LayerZero flagged over 800,000 addresses (roughly 13% of its entire eligible base of six million) as likely Sybils created to farm token rewards.

Key findings

• Address counts can exceed underlying user numbers by a substantial margin – the most rigorous public estimates, from a16z crypto's 2024 and 2025 reports, show the pattern holding across both years.

• Sybil filtering removes large shares of apparent user bases even after identity checks – Linea's 2025 analysis with Nansen flagged approximately 40% of addresses that had already passed Proof of Humanity.

• Individual farming operations have controlled thousands of addresses; during the Arbitrum airdrop, analysts traced 2.7 million ARB tokens flowing to two entities through 1,496 farming wallets.

• Blockchain design inflates counts without any manipulation – Bitcoin-style wallets rotate addresses for privacy, smart contracts and account-abstraction wallets each carry their own addresses, and exchanges operate millions of deposit addresses.

• The industry's own adjusted metrics confirm the scale of the problem – a16z reports roughly $9 trillion in adjusted stablecoin volume against $46 trillion in raw volume, with the adjustment designed to filter bots and inflationary activity.

• Venom's metric-robustness framework finds that the indicators hardest to fake – returning wallets, fee-paying users, protocol revenue and active developers – are the ones the industry quotes least often.

Executive Comment

"The industry keeps grading itself on a metric that anyone with a laptop can inflate overnight," said Christopher Louis Tsu, CEO of Venom Foundation. "This is a problem for everyone building serious infrastructure, because capital, grants and attention flow toward the flashiest numbers rather than the ones that reflect actual durability. Our intention with this research is constructive: the analytics tools for measuring genuine, retained, fee-paying usage already exist. If networks, investors and the media converge on those standards, honest builders benefit and the market gets a far clearer view of where blockchain adoption actually stands."

Why It Matters

Active-address counts influence token valuations, exchange listings, media rankings, ecosystem grant allocations and investor due diligence. When the metric can be manufactured at near-zero cost, these decisions rest on distorted information. The report argues that a shift toward Sybil-filtered, retention-based and revenue-based measurement would reprice networks on fundamentals and reduce the commercial incentive to tolerate artificial activity.

About the research

The report was prepared by the Venom Foundation research team. It combines a review of publicly available sources, including a16z crypto's State of Crypto 2024 and 2025 reports, Nansen's Linea Sybil-detection analysis, Coin Metrics methodology documentation, Artemis Sybil-detection research, disclosures by LayerZero Labs and Chaos Labs, and academic studies on Sybil detection and wash trading, with an original framework built for assessing metric robustness and structural address inflation across networks. All figures are sourced and linked in the full report. Where precise measurement is impossible, figures are labeled as estimates. The full report is available here.

About The Venom Foundation

The Venom Foundation is a fintech company founded in Abu Dhabi, specializing in the development and implementation of high-performance blockchain solutions. Venom's mission is to provide blockchain infrastructure that streamlines financial services and is adaptable and scalable to the needs of massive national and international enterprises.

The Venom Foundation specializes in the creation, deployment, and integration of decentralized applications and services with a focus on security, speed, and regulatory compliance. The Venom network provides throughput capacity of up to 150,000 TPS with minimal fees and 99.99% uptime, supporting an ecosystem of DeFi, NFT, gaming, and enterprise solutions.

Contacts: media@venom.network 

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