Aave struggles to attract new users daily; The reasons are not surprising

  • Aave has seen a decrease in user activity over the past 30 days.
  • During that period, revenue increased as a result of the fee increase.

Aave, the leading decentralized borrowing and lending protocol, will have an average of 4,000 daily users in 2022, which puts it well ahead of its competitors, according to data from Delphi Digital.

However, the year so far has been marked by a decrease in user activity on the platform, according to data obtained from DappRadar.

According to DappRadar, the number of unique active wallets (UAW) that interact or perform a transaction on Aave has decreased by 31% in the last 30 days.

This is confirmed by data from token terminal Which showed that on average over a 30-day period, Aave saw a daily user count of 3,800, representing a 38% decrease in the daily number of users of the protocol.

How much is 1,10,100 AAVE worth today?

As user activity decreases, so does the number of transactions. In the past month, the number of completed transactions on Aave has decreased by 42.49%. During that period, the number of transactions in the protocol reached 38,000.

This drop severely affected the volume of transactions on the protocol as data from DappRadar showed a 96% decrease in the mandatory value of transactions completed on Aave in the last 30 days.

Source: DappRadar

The V3 distribution on Ethereum is seeing a decrease in the number of daily transactions

Aave successfully launched its V3 iteration on the Ethereum network on January 27, following support from its community. The new application has generated a lot of interest, with $60.26 million in deposits and $28.29 million in loans.

Data from Dune Analytics revealed that the number of daily unique users of the V3 distribution on Ethereum has risen steadily since its launch. In the past week that percentage has increased by more than 500%.

Source: Dune Analytics

However, the day after the launch of V3 on Ethereum, the daily transactions made between these users decreased. With a peak of 134 transactions on January 28, daily transactions on Aave V3 on Ethereum have since fallen by 85%.

Source: Dune Analytics

Read Aaves [AAVE] Price forecast 2023-2024

Here comes the silver lining

Despite a steady decline in user activity and transactions on Aave over the past month, revenue from the protocol increased by 17%.

Aave generates revenue by charging fees on its platform for various activities, such as lending and depositing funds, and by earning interest on funds deposited on the platform.

According to data from Token Terminal, the cumulative fees made on Aave totaled $5.3 million, up more than 200% in the past 30 days.

Source: Token Terminal

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