Aave has seen a decrease in user activity over the past 30 days. In that period, revenues increased as a result of an increase in commissions.
Aave, the leading decentralized borrowing and lending protocol, recorded an average of 4,000 daily users by 2022, ahead of its competitors, according to data from Delphi digital.
.@AaveAave ~4,000 daily active users on average by 2022. pic.twitter.com/iL4o4Mtr1j
— Delphi Digital (@Delphi_Digital) February 3, 2023
However, the year to date has been marked by a drop in user activity on the platform, according to data retrieved DappRadar.
According to DappRadar, the number of unique active wallets (UAW) interacting with or transacting on Aave is down 31% in the past 30 days.
This was further confirmed by data from Token terminal which showed that over an average of 30 days, Aave saw a daily count of 3,800 users, representing a 38% drop in the protocol’s daily user count.
How much are 1,10,100 AAVEs worth today?
As user activity fell, so did the number of transactions. In the past month, the number of completed transactions on Aave is down 42.49%. Within that period, the number of transactions on the protocol was 38,000.
This drop had a serious impact on transaction volume on the protocol, as data from DappRadar revealed a 96% drop in the fiat value of transactions completed on Aave in the past 30 days.
Source: DappRadar
V3 implementation on Ethereum sees drop in daily transactions
Aave successfully launched its V3 iteration on the Ethereum network on January 27, following the support of its community. The new implementation has generated significant interest, with $60.26 million in deposits and $28.29 million in loans.
Data from Dune analytics showed that the number of unique daily users of the V3 implementation on Ethereum had steadily increased since its launch. In the past week, this has grown by more than 500%.
Source: Dune analysis
However, the daily trades completed between these users started dropping a day after V3 went live on Ethereum. With a peak of 134 transactions on January 28, daily transactions on Aave V3 on Ethereum have since dropped by 85%.
Source: Dune analysis
Read Aave’s [AAVE] Price forecast 2023-2024
Here comes the silver lining
Despite the continued decline in user activity and transactions on Aave over the past month, revenue from the protocol grew by 17%.
Aave generates revenue by charging fees on its platform for various activities, such as borrowing and depositing funds, and earning interest on the funds deposited on the platform.
According to data from Token Terminal, cumulative fees on Aave totaled $5.3 million, up more than 200% in the past 30 days.
Source: Token Terminal
This post Aave struggles to attract new users on a daily basis; reasons are not surprising
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