What are Active Addresses in Crypto?

Active Address: The Definition

An active address in cryptocurrency refers to an address (public key) that has been used to send or receive transactions within a given time frame. It's a way to track user activity on a blockchain. For example:

• If an address has sent or received at least one transaction in the last 24 hours, it would be considered "active."
• If an address hasn't had any transaction activity for an extended period, it's considered "inactive."

Tracking active addresses helps measure the usage and adoption of a cryptocurrency. For instance, if a cryptocurrency network consistently has a high number of active addresses, it may indicate a growing user base or increasing network activity.

These metrics are often used by analysts and investors to gauge the health and growth of a blockchain network or the overall ecosystem.

Types of Active Addresses

Investors and researchers mainly track 3 types of active addresses depending on the timeframe of activity. These are 

• Daily Active Addresses

  These are the total number of addresses on the blockchain that have either received or sent funds in the last 24hrs. The metric is sometimes referred to as Daily Active Users. Addresses that are active daily are usually associated with traders who are highly active on DEXs, market makers, gamers and metaverse players, and smart contract programs that deploy and operate automatically.

• Weekly Active Addresses

  These are the total number of addresses on the blockchain that have either received or sent funds in the last 7 days. The metric is sometimes referred to as Weekly Active Users.

• Monthly Active Addresses

  These are the total number of addresses on the blockchain that have either received or sent funds in the last 1 month. The metric is sometimes referred to as Monthly Active Users. 

Calculation of an Active Address

Let’s take an example of the Ethereum Blockchain and refer to the data on Etherscan to understand how active addresses are calculated.

On Feb 24, 2025 the number of Active Ethereum Addresses was 531,396. 440,618 addresses received some funds, while 245,339 addresses sent funds. Some addresses that received funds could have also sent funds. Hence, it is important to only count the unique addresses. For addresses that both sent and received funds, it will be calculated as a single active address. 

The same mechanism can be used to calculate weekly and monthly active addresses. In order to calculate active addresses, we will only require the entire transaction history for the blockchain in a specific time period - daily, weekly or monthly and then count the unique addresses only.

Comparison with Active Users

Daily Active Users and Daily Active Addresses are not exactly the same. A user on blockchain can have multiple addresses with which he or she can transact. Hence Addresses cannot be mapped to Users 1:1. Some blockchain developer teams might create thousands of addresses and multiple transactions among them to paint a false image that the adoption and activity on the blockchain is high. Hence, while analysing a blockchain, active addresses must not be the only criteria. ICR scoring ensures many parameters such as TVL, Fees and Revenue, NVT ratio and Liquidity score is considered while scoring and ranking a crypto algorithm.

Navigate to any crypto on the ICR platform and select “Our Analysis” to check out historical data for Daily, Weekly and Monthly Active Users for any of your favourite coins.

Why Are Active Addresses Important?

• Network Activity – A higher number of active addresses indicates strong blockchain usage.
• Adoption Indicator – Growth in active addresses suggests increasing adoption of a cryptocurrency.
• Market Trends – A decline in active addresses could signal reduced interest or bearish sentiment.

Conclusion

Active addresses serve as a crucial metric for evaluating the usage and adoption of a blockchain network. By analysing daily, weekly, and monthly active addresses, investors can gain insights into transaction activity, network health, and potential growth trends. However, it’s important to recognise that active addresses do not directly equate to active users, as one individual or entity may control multiple addresses. For a more comprehensive analysis, additional metrics such as Total Value Locked (TVL), Fees and Revenue, NVT Ratio, and Liquidity Score should also be considered.