User Retention Ratios
User Retention Ratios track the percentage of users who continue to interact with a protocol over a specific period. High retention is a sign of product-market fit and long-term viability for decentralized finance platforms.
In an adversarial market environment, keeping users is often more important than acquiring new ones, as it indicates a loyal base that provides consistent liquidity. Analysts examine cohort data to see how different groups of users behave after their initial entry.
This helps in understanding the long-term value of a user and the effectiveness of governance incentives. Low retention may signal issues with smart contract security or lack of competitive utility.
It is a vital metric for evaluating the sustainability of a project.