Solanas Momentum Declines, Daily User Count Hits Lowest in 2 Years: A Closer Look at the Trend

Solana’s Daily Active Addresses Hit All-Time Low

The number of daily active addresses on the Layer One blockchain Solana has reached its lowest point since late 2020. On the 31st of August, the platform saw around 204,000 daily active users, marking a significant decline in momentum.

Falling Daily Active Addresses on Solana

A two-year low in daily active addresses has been observed on Solana. Data from The Block’s Data Dashboard reveals that the number of daily active users dropped to 204,000 on August 31st, 2021. The 7DMA metric, which calculates the average value of a data point over a week, highlights this concerning trend.

Reasons Behind the Decline

The decline in Solana’s active users can be attributed to the collapse of FTX, a major cryptocurrency exchange, and the classification of Solana’s native SOL token as a security by the United States Securities and Exchange Commission. These events have impacted both the reputation and availability of SOL.

Ecosystem Decline Before FTX Collapse

Data analyst Rebecca Stevens from Block Research notes that the Solana ecosystem was already experiencing a decline in active users prior to FTX’s collapse. However, the strong association of Solana with FTX and Alameda Research, FTX’s sister trading firm, further affected the blockchain’s reputation.

Impact of SEC’s Classification

The SEC’s assertion that SOL is a security has resulted in the delisting of the SOL token on major US platforms, including eToro and Robinhood. Consequently, SOL’s price has declined by 7% over the past 7 days, currently standing at around $20 according to CoinGecko.

Positive Developments for Solana

Despite the challenges, Solana has seen positive developments. Visa recently announced the expansion of its stablecoin settlement capabilities using USDC on the Solana blockchain. This partnership aims to enhance cross-border settlement speed. MakerDAO CEO Rune Christensen has also proposed utilizing Solana’s codebase for its future blockchain, NewChain, highlighting Solana’s adaptability, technical excellence, and resilience.

Hot Take:

Solana’s decline in daily active addresses is concerning, but positive developments such as Visa’s collaboration and MakerDAO’s interest in its codebase indicate potential for recovery and growth. The blockchain industry is constantly evolving, and Solana has the opportunity to adapt and improve its ecosystem to regain momentum.