Avalanche Network introduces Firewood upgrade amid declining on-chain activity, AVAX holders uncertain


  • Avalanche introduces Firewood as an efficient blockchain database system.
  • The smart chain platform notes a decline in several key metrics like active addresses, revenue and fees generated.
  • AVAX price could decline in the short term amid dismal on-chain metrics. 

Avalanche Network will soon get an upgrade known as "Firewood," which is an efficient system for storage of Merkalized blockchain state. Ava Labs announced that Firewood is currently in the development stage and is not ready to be deployed yet. 

Also Read: 99% of AVAX holders are in loss ahead of nearly $100 million token unlock

Avalanche network introduces Firewood

Avalanche Network has added a developer preview of Firewood on its network.  Ava Labs, the creator of Avalanche blockchain, explained that the upcoming upgrade will tackle one of the most important bottlenecks – blockchain scaling. 

The goal of an intelligent filing system is to efficiently organize information while enabling effective state management to help scale blockchains. However, projects like Bitcoin and Ethereum use a tree data structure or Merkleized storage on their blockchains. Firewood is designed to read Merkleized blockchain state under heavy loads. 

Unlike other blockchain database management systems, Firewood is not based on generic key-value stores like LevelDB or RocksDB. Ava Labs, the company behind Avalanche, said that it will evaluate Firewood's performance in comparison to other blockchain databases in the coming months. 

While the update for Firewood is still under work, it is a bullish development for the Avalanche ecosystem from a big-picture perspective. But the on-chain metrics reveal a not-so-optimistic outlook, which could add headwinds to AVAX price.

AVAX price to take a hit

According to Token Terminal statistics, the number of addresses actively interacting with the Avalanche network has declined over the past month, indicating a capital flight. The 30-day Active Users average has dropped nearly 33%.

Additionally, its 30-day revenue has also taken a hit with the fall in activity. Revenue that AVAX generated from fees and other sources for the period is down 45%. Annualized fees for the chain stand at $3.65 million, down over 47%.

With the network’s key metrics on a slump, AVAX price, which currently trades at $9.35, is likely to suffer a further decline

AVAX Key Metrics

AVAX Key Metrics

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Join Telegram

Recommended content


Recommended Content

Editors’ Picks

Bitcoin may be set for a price rebound amid alleged Trump's plan to speak at Bitcoin convention

Bitcoin may be set for a price rebound amid alleged Trump's plan to speak at Bitcoin convention

Bitcoin's price dropped below the $60K level briefly on Monday following news of defunct exchange Mt Gox beginning to pay its creditors in July. However, Santiment data reveals that the recent spike in social volume of the phrase "bottom" could signal a potential price rebound for Bitcoin based on historical trends.

More Bitcoin News

Solana down 15% in past seven days amid claims of alleged SOL investigation

Solana down 15% in past seven days amid claims of alleged SOL investigation

Solana holders and crypto analysts on X slammed influencer Crypto Bitlord behind the X handle @crypto_bitlord7 for his hot take on Solana and an alleged investigation. The analyst said that the alleged investigation has been brewing for “some weeks now,” and the crypto community on X heavily critiqued the influencer.

More Solana News

Ethereum whales increase their holdings following recent price decline

Ethereum whales increase their holdings following recent price decline

Ethereum's price (ETH) is down nearly 6% on Monday after Mt. Gox announced it would begin repaying creditors their Bitcoin and Bitcoin Cash. However, ETH whales have pounced on the price decline as an opportunity to purchase ETH before the arrival of spot Ethereum ETFs.

More Ethereum News

SHIB whale sells amid controversy surrounding WATER meme coin and singer Jason Derulo

SHIB whale sells amid controversy surrounding WATER meme coin and singer Jason Derulo

SHIB whales could be selling as the Dogecoin competitor has not seen sustained price growth in the past three months. WATER token might be facing selling pressure from increased insider activity. Jason Derulo accused of promoting crypto pump-and-dump scams by analyst.

More Shiba News

Bitcoin: Is BTC out of the woods?

Bitcoin: Is BTC out of the woods?

Bitcoin appears poised for a slight decline this week, influenced by factors such as the German Government's deposit of over 1,700 BTC in exchanges, decreasing outflows in US spot ETFs, and on-chain data indicating no signs of BTC DeFi liquidation. 

Read full analysis

BTC

ETH

XRP