Solana Continues To Lose Momentum, Daily Users At 2-Year Low

Solana Continues To Lose Momentum, Daily Users At 2-Year Low

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Layer One blockchain Solana is continuing to lose momentum, with the daily active addresses on it declining to around 204,000 on the 31st of August. 

This is the platform’s lowest number of daily active users since late 2020. 

Solana’s Daily Active addresses Hitting Significant Lows 

Solana’s number of daily active addresses has fallen to a two-year low. This is the lowest point since 2020, when data started to be tracked. According to data from The Block’s Data Dashboard, the number of daily active users on Solana fell to 204,000 on the 31st of August. The 7DMA metric displays the average value of a data point over a week and is quite useful in spotting trends. 

The decline in Solana’s active users has seen a considerable increase following the collapse of the cryptocurrency exchange FTX. The Sam Bankman-Fried led exchange filed for bankruptcy in November. Additionally, the United States Securities and Exchange Commission’s decision to classify the platform’s native SOL token as a security has also taken a toll on the number of daily active users. 

Ecosystem Was Already In Decline 

According to the data analyst at Block Research, Rebecca Stevens, the Solana ecosystem was already experiencing a decline in active users even before the collapse of FTX. However, she added that the blockchain’s strong ties to the exchange and its sister concern, Alameda Research, did have an impact on the blockchain’s reputation. 

“The Solana ecosystem was already seeing a decline in active users prior to the collapse of FTX, but the fact that the blockchain had such strong ties to the exchange and Alameda Research [FTX’s sister trading firm] hurt its reputation a bit.”

The Securities and Exchange Commission’s assertion that SOL is a security also had an impact, with the SOL token delisted on several major US platforms. 

“The SEC alleging that SOL is a security also hurt the token’s price and has caused it to be delisted in the U.S. on several platforms like eToro and Robinhood.”

Currently, the price of SOL is around $20, which is a 7% decline over the past 7 days, according to data from CoinGecko. The platform also ranks 10th when it comes to total value locked at $310 million. 

Positive Developments 

However, it’s not all doom and gloom, as there have been several positive developments regarding Solana activity as well. Payments giant Visa has announced the expansion of its stablecoin settlement capabilities with USDC into the Solana blockchain. This would offer high-speed performances. Visa made the announcement on Tuesday, stating that it had added pilot programs with merchant acquirers Worldpay and Nuvei and is using the capabilities of the Solana blockchain to do so. 

“By leveraging stablecoins like USDC and global blockchain networks like Solana and Ethereum, we’re helping to improve the speed of cross-border settlement and providing a modern option for our clients to easily send or receive funds from Visa’s treasury.”

MakerDAO CEO Rune Christensen has also proposed using Solana’s codebase as the foundation for its future blockchain, NewChain. Christensen has stated that Solana stands out among other blockchains because of its adaptability, technical excellence, and resilience, making it an extremely promising base for NewChain.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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