Avalanche’s native token, AVAX, recently dipped below $10, marking its first time below this threshold since Jan. 2021, as per data from CryptoSlate.
Over the last 24 hours, the cryptocurrency saw a 1.3% decline, pushing its price to $9.16. This drop has contributed to a 14.5% decrease in AVAX’s value over the past month and a significant 50.5% loss over the past year.
Why did AVAX value drop?
AVAX’s decline has coincided with decreased network activity within the Avalanche ecosystem, according to DeFillama data. The total value locked (TVL) in Avalanche has plummeted from $11 billion in Nov. 2021 to its current level of $497 million. Notably, the TVL in AVAX has similarly dwindled, dropping from its peak of 135 million AVAX in May 2022 to the current 53 million AVAX.
The decline in TVL is a barometer for a more profound issue: the diminishing activity on the Avalanche network. In the past 24 hours, Avalanche has witnessed a mere 30,000 active users, with $1.57 million in inflows, $10.8 million in trading volume, and a meager $7,882 in fees generated.
This starkly contrasts with the network’s performance at its zenith. Toward the end of 2021, the network boasted an average daily transaction volume of $500 million. Daily fees peaked in April, averaging around $100,000, while daily users exceeded 80,000 in early 2022.
Additionally, the token has faced notable headwinds with its scheduled unlocking, adding more selling pressure on the digital asset. For context, Token Unlocks data shows AVAX 1-year emission stands at roughly 75 million, around $700 million.
Avalanche continues to attract development.
Despite the falling price, Avalanche’s ecosystem continues to attract new development, a positive indicator of the network’s resilience.
In May, the network and Alibaba Cloud partnered to create a blockchain-based metaverse deployment platform called Cloudbase. Besides that, it partnered with another high-profile cloud computing platform, Amazon Web Services (AWS) in January.
Also, stablecoin issuer Circle launched its Euro Coin stablecoin on the blockchain.
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