AAVE saw growth in terms of daily active users. Private investor interest in the token waned.
Token Terminal, a leading crypto analytics firm, tweeted on Jan. 5 that the number of daily active users on the Aave protocol has increased. Well, despite the increase in activity on the protocol, the incentive to keep the AAVE token was reduced.
Daily active users @AaveAave are trending 🆙 pic.twitter.com/qLC5qo58r7
— Tokenterminal (@tokenterminal) January 4, 2023
Read Aave’s [AAVE] Price forecast 2023-2024
Aave users are switching
The number of daily active users on Aave has increased by 73.9% in the last three months. At the time of writing, there were 17,500 active users of the protocol, of which 48.85% were savers and 30.80% were borrowers.
Contrary to the aforementioned information, the number of new users on the network has dropped significantly in recent months, according to data from Dune Analytics. At the time of writing, Aave accumulated only 134,508 users cumulatively.
Source: Dune analysis
One reason for the decline in new users could be that few token incentives are being handed out on the protocol. Well, token incentives are different types of tokens that are distributed to users to incentivize them to use the platform.
Source: token terminal
Unsurprisingly, dwindling interest from new users affected Aave’s generated revenue, which fell 9.98% over the course of the past 30 days, according to Messari. At the time of writing, the total proceeds were $1.05 million.
The token is affected
Interestingly, interest in whales declined sharply. According to data from Santiment, the total supply of Aave held by major addresses has fallen significantly. This suggested that whales have been selling off much of their holdings in recent weeks.
In tandem with this, retail investor interest in the AAVE token also declined. This was indicated by Aave’s declining network growth, which suggested that the frequency with which new addresses first transferred their tokens had decreased.
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Much to the surprise of investors, the network’s overall activity dropped significantly. The speed of the token has decreased significantly over the past month. This may be a cause for concern for traders going long on the token in 2023.
Source: Sentiment
That said, it remains to be seen whether the spike in daily active users on the platform can help improve Aave’s condition.
At the time of writing, AAVE was trading at $55.93. According to CoinMarketCap, the price is up 0.35% in the last 24 hours.
This post AAVE’s Daily Active User Count Surprises Investors, But Can It Boost the Price?
was published first on https://ambcrypto.com/aave-bulls-on-the-defense-as-daily-activity-spikes-will-the-rally-continue/
