It appears that usage of the Avalanche network (AVAX) has plummeted on chain Events. On the social media platform X divided The account AVAXTdaily data on the number of transactions on the network, showing a decrease of 17 percent over the last 7 days. Is this drop in usage a signal of problems surrounding the AVAX price?
Avalanche sees a 96% decline in usage
Avalanche is a large smart contract platform similar to popular networks such as Ethereum (ETH) and Solana (SOL). The AVAX price has increased significantly over the past 12 months, with growth of almost 85 percent. Over the past month, the price of the coin has been fairly neutral between $32 and $37. According to X user AVAXDaily, we should be concerned about the network’s launch and its potential impact on the altcoin’s price.
Since December, daily usage of the Avalanche network has dropped dramatically. While up to 6 million transactions per day were registered in December, since February 6th there have been only 200,000 transactions per day. A decline of no less than 96 percent.
The deployment of a blockchain network is widely viewed as an important measure of network success and long-term price prediction. High usage means higher demand for the underlying currency, which leads to higher prices in the long term. The decline in adoption is therefore a cause for concern for some investors and analysts. Especially in connection with the strong competition on the crypto market.
Impact on AVAX burn rate
The Avalanche network burns coins regularly, similar to other crypto projects. Tokens are burned through transactions. A portion of the transaction fees paid by users are burned, slightly reducing the supply of coins.
The more the network is used, the more coins are burned, which can have a significant impact on the AVAX price. The drop in transactions on the network also results in fewer coins being burned, which could also have an impact on the Avalanche price.