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. 

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.