Layer 1 blockchain platform Solana is experiencing a significant decline in user activity. Daily active addresses reached the lowest level in the last two years.
Solana's Daily Active Address Number Decreased to the Lowest Level in the Last Two Years
This decline raised concerns about the sustainability of the platform and its reputation in the cryptocurrency ecosystem.
The seven-day moving average (7DMA) of daily active addresses on Solana fell to approximately 204,000 on August 31.
The 7DMA metric provides the average value of a data point over the past week, making it a reliable indicator of user trends.
Solana's declining active user base has become a problem that has been exacerbated by several factors in recent months.
One significant event was the collapse in November of FTX, a cryptocurrency exchange with close ties to the Solana ecosystem.
In addition, the Securities and Exchange Commission (SEC) labeled Solana's native token, SOL, a security, further damaging its reputation.
Data analyst Rebecca Stevens commented on these developments as follows:
“The Solana ecosystem was already experiencing a decline in active users before FTX's collapse.
However, the fact that the blockchain had such strong ties to the exchange and Alameda Research did further damage to its reputation.
Claiming that SOL is a security, the SEC also affected the price of the token, resulting in its delisting on various platforms such as eToro and Robinhood in the US.”
Additionally, Solana ranks tenth in terms of total value locked, which currently stands at around $311 million, according to DefiLlama data.
*This is not investment advice.
