Analysts at VanEck, which manages $77 billion in assets, shared their thoughts on Avalanche (AVAX).
Analysts at VanEck have recently reported that Avalanche (AVAX) has seen a precipitous drop in both its user base and its overall blockchain activity.
According to the data, Avalanche experienced the second-worst loss in fees among Smart Contract Platforms (SCPs) monitored by VanEck, and a 34% drop in its daily active user base, compared to August.
Avalanche has only 28 active developers a week, whereas Solana has 165 and Polygon has 125. When compared to September 2022, this is a monthly drop of 34% and an annual drop of 70%.
Despite these obstacles, Avalanche has reportedly updated its “Hyper SDK” to allow customers to build blockchains with throughputs of 143 thousand transactions per second (TPS). This is a massive increase over Ethereum’s estimated 200-300 TPS and Solana’s claimed 50,000 TPS.
The long-term goal of Avalanche is to launch a multi-blockchain network driven by the AVAX token. The plan is to provide a software development kit (SDK) that will inspire others to create their own blockchains, which will in turn bring new concepts, users, and fees to Avalanche’s expanding blockchain network. The Avalanche blockchains were meant to be a consulting revenue stream for Ava Labs, the company behind the Avalanche software.
Avalanche has had a huge dip despite having commercial success with its own Ethereum Virtual Machine (EVM) blockchain, C-Chain, in the fall of 2021.
C-Chain’s smart contracts once held over $10 billion in total value locked (TVL), and the platform once touted $1 million in daily fees and over 100,000 DAUs. These numbers decline to $500 million in TVL, $11,000 in daily fees, and 34,000 daily active users by September 2023.
The bankruptcy of Avalanche’s primary sponsors, Three Arrows Capital, and a lack of product diversification during the bear market are cited in the report as major causes of the company’s downfall.
A strong marketing competence is essential for Avalanche to gain the corporate customers it needs to reinvigorate its chains, but VanEck analysts are dubious if this is possible.
Due to the rapidly dwindling AVAX developer base and the flight of risk capital from all but the finest projects in the cryptocurrency market, VanEck analysts say it is difficult for them to be bullish on AVAX.
*This article is not financial advice.