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Avalanche Blockchain Witnesses Decline In Its Network Activity

According to its X post, proof-of-stake blockchain Avalanche has experienced a significant drop in its network usage over the past week.

Avalanche, a prominent PoS blockchain, has reported a notable decline in its network activity. In the past week, there has been a significant decrease in transaction volume that raised concerns for the platform’s goal of fostering resilient smart contract operations. 

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The decline in engagement with decentralized applications (dApps) within the Avalanche ecosystem suggests a potential shift in user behavior or market conditions. This analysis examines the implications of reduced transactions and the factors driving this trend. 

Last week, Avalanche’s main smart contract platform, the C-Chain, processed 7.66 million transactions, marking a nearly 17% decrease from the previous week. Concurrently, the network’s gas consumption dropped by approximately 2.7%. This decline indicates reduced utilization of intricate smart contracts, usually linked with higher gas expenses.

After peaking in December amid heightened activity, daily transactions on the C-Chain have sharply decreased. The trend reveals a drop from over 5 million transactions to a low of 200,000 in early February. This shift suggests a cooling period for the blockchain following a previously bullish phase in 2023. The reduced transaction volume may also impact Avalanche’s revenue from transaction fees.

Furthermore, Avascan data indicates a significant reduction in AVAX supply due to decreased transaction volume last week. This decline in deflationary pressure may be the primary factor contributing to the 1.1% weekly decrease in AVAX’s price.

But despite the decline in network activity, AVAX is up by 3.55%, trading at $35.45 with a trading volume of $512.12 million in the last 24 hours.

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Sophia Cruz
Financial Writer - Asian & European Desks
Sophia is an experienced writer, reporter and newsdesk member, mostly on the financial sectors. For the past 5 years Sophia has covered a wide variety of topics such as the financial markets, economics, technology, fin-tech and trading. Sophia has been a part of the FX Leaders team since 2017 and works on producing valuable content and information for traders of all levels of experience.
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