- User activity and costs decreased in the third quarter on Avalanche C-Chain and subnets.
- NFT sales volume was “quiet” during the quarter under review.
Proof-of-stake blockchain network Avalanche [AVAX] saw a significant drop in network activity and revenue between July and September, Messari found in a new one report.
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In the report titled ‘State of Avalanche Q3 2023’, the on-chain data provider found that the last quarter was marked by an overall decline in user activity and protocol revenue for the Layer 1 (L1) network.
Low user activity and network costs
Although the network consists of the P,
According to Messari, the average number of daily active addresses on Avalanche C-Chain during the period studied was 99,729. This represented a drop of as much as 59% from the 243,813 recorded average daily active address count between April and June.
In terms of daily transactions on the network, Avalanche recorded an average number of daily transactions of 900,000 across the C-Chain and its 14 subnets in the third quarter. These subnets are custom blockchains built on top of the Avalanche network. They are created by a group of validators who agree to manage the subnet and validate transactions.
The C-Chain saw a 29% drop in daily transactions, while the subnets saw a 50% drop in daily transactions.
Source: Messari
Additionally, USD-denominated fees for processing transactions on Avalanche decreased in the third quarter. However, in AVAX terms, fees paid in the third quarter increased by 61% compared to the fourth quarter of the previous year.
According to Messari:
“Some of the QoQ decline likely stemmed from the aforementioned LayerZero dominance of network activity, as transaction fees associated with LayerZero or Stargate contracts represented 43% of fees paid in the quarter.”
The DeFi and NFT vertical markets
Messari assessed the performance of the decentralized finance (DeFi) protocols housed within Avalanche and found that decentralized crypto lending platform Aave remained the top protocol in the chain during the reporting period, despite the TVL decline it witnessed in the second quarter.
It further noted that liquid staking platform Benqi came in second, although it saw a 3% TVL decline in the third quarter.
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Messari added:
“Avalanche welcomed some EVM giants in the third quarter, launching Uniswap and Balancer into the chain. The two bring competition to the DEX space, where Trader Joe reigns supreme with over $50 million in TVL.”
Source: Messari
In terms of NFT project activity on Avalanche, the chain had “its quietest quarter in USD NFT volumes, despite a second straight quarter of rising sales,” the report said.