Solana’s Momentum Slips Further as Daily User Numbers Hit a 2-Year Low

Solana’s Daily Active Addresses Hitting Significant Lows

Solana’s daily active addresses have hit a two-year low, reaching levels not seen since 2020 when tracking data began. According to The Block’s Data Dashboard, Solana’s daily active users fell to 204,000 on August 31st. The 7DMA metric, which shows the average value of a data point over a week, is a valuable tool for identifying trends.

The decline in Solana’s active user base has been accelerated by two major factors:

• The collapse of the cryptocurrency exchange FTX, led by Sam Bankman-Fried, which filed for bankruptcy in November.
• The United States Securities and Exchange Commission’s decision to classify Solana’s native SOL token as a security, which has negatively impacted daily active users.

Ecosystem Was Already In Decline

Rebecca Stevens, a data analyst at Block Research, noted that the Solana ecosystem was already experiencing a decline in active users before the FTX collapse. However, the blockchain’s close ties to FTX and its sister company, Alameda Research, have further damaged its reputation.

Stevens stated, “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 a significant impact, leading to the delisting of the SOL token from 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,” explained Stevens.

Currently, the price of SOL stands at approximately $20, representing a 7% decline over the past seven days, according to data from CoinGecko. Solana also ranks 10th in terms of total value locked, with $310 million.

Positive Developments

Despite the challenges, there have been positive developments within the Solana ecosystem:

Payments giant Visa has announced an expansion of its stablecoin settlement capabilities with USDC into the Solana blockchain, promising high-speed performance. Visa has initiated pilot programs with merchant acquirers Worldpay and Nuvei, leveraging the capabilities of the Solana blockchain. Visa’s spokesperson stated, “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.”

Furthermore, MakerDAO CEO Rune Christensen has proposed utilizing Solana’s codebase as the foundation for its future blockchain, NewChain. Christensen cited Solana’s adaptability, technical excellence, and resilience as key factors that make it a promising base for NewChain.

Disclaimer: This article is provided for informational purposes only and should not be considered legal, tax, investment, financial, or other advice.