Solana validators set for new upgrade: How will it affect SOL?
What has caused a decline in the daily active addresses on Solana, and how might this impact the price of SOL?
The decline in daily active addresses on Solana can be attributed to a decrease in bot activity and the removal of some validators involved in malicious activities. According to Austin Federa of the Solana Foundation, the reduction in bot activity might be a significant reason behind the decline in daily active addresses. However, he also mentioned that the number of genuine human users on the network remains robust.
This decline in daily active addresses has raised concerns among investors about the network's user engagement and its potential impact on the price of SOL. Market indicators have pointed toward a continued decline in SOL prices, and the decrease in active addresses could be one of the contributing factors. If this trend continues and market engagement does not improve, SOL might struggle to regain its former price points and could potentially drop to the $155 level1.
However, it is essential to note that network upgrades and measures to tackle congestion issues are being implemented, which could improve the network's performance and attract more users in the future. As of now, the situation remains cautious for investors, and the future outlook will depend on how well the network addresses these operational challenges and regains investor confidence.
How has the price of SOL changed in the 24 hours prior to the reporting, and what historical trends have been observed following previous resolutions of congestion issues?
In the 24 hours prior to the reporting, the price of Solana (SOL) had decreased by 4%, standing at $159.33 at the time. Historically, when Solana has resolved its congestion issues, the price of SOL has tended to increase days later. However, the decline in network activity, revenue, and fees, as well as other indicators such as Open Interest and trading volume, have suggested that a price recovery might not happen immediately for SOL, with the token potentially falling further to around $155.
How has Solana's revenue and fee structure been affected by the decrease in network interaction?
The decrease in network interaction on Solana has led to a decline in its revenue and fees. As the number of daily active addresses dropped from 1.9 million to 1.4 million, the network's overall activity and demand for SOL reduced. This, in turn, has affected the revenue generated by the network, which is now significantly lower compared to previous levels. Additionally, with fewer transactions taking place, the fees collected by validators have also decreased, impacting their earnings and overall sustainability.