- 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
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.
Recommended Content
Editors’ Picks
Bitcoin Weekly Forecast: BTC nosedives below $95,000 as spot ETFs record highest daily outflow since launch
Bitcoin price continues to edge down, trading below $95,000 on Friday after declining more than 9% this week. Bitcoin US spot ETFs recorded the highest single-day outflow on Thursday since their launch in January.
Bitcoin crashes to $96,000, altcoins bleed: Top trades for sidelined buyers
Bitcoin (BTC) slipped under the $100,000 milestone and touched the $96,000 level briefly on Friday, a sharp decline that has also hit hard prices of other altcoins and particularly meme coins.
Solana Price Forecast: SOL’s technical outlook and on-chain metrics hint at a double-digit correction
Solana (SOL) price trades in red below $194 on Friday after declining more than 13% this week. The recent downturn has led to $38 million in total liquidations, with over $33 million coming from long positions.
SEC approves Hashdex and Franklin Templeton's combined Bitcoin and Ethereum crypto index ETFs
The SEC approved Hashdex's proposal for a crypto index ETF. The ETF currently features Bitcoin and Ethereum, with possible additions in the future. The agency also approved Franklin Templeton's amendment to its Cboe BZX for a crypto index ETF.
Bitcoin: 2025 outlook brightens on expectations of US pro-crypto policy
Bitcoin price has surged more than 140% in 2024, reaching the $100K milestone in early December. The rally was driven by the launch of Bitcoin Spot ETFs in January and the reduced supply following the fourth halving event in April.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.