On chain metrics for Harmony (ONE) shows that the cryptocurrency might be facing abandonment due to the ongoing churning in the crypto markets. The crypto is facing decline in transactions and daily active addresses.
Another possible reasons might be the launch of Optimistic and ZK Rollups which provide much higher security and has higher trust for being based on Ethereum.
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Daily Active Addresses
The most important metric to see network activity is the daily active addresses which shows the number of active users on the blockchain.
Though I have seen people criticize users of this metric, but to my defence, every blockchain has its own numbers of hoarders and traders. After a certain period say, 2 years, every blockchain has a constant number of daily active users.
The decline of daily active users in one blockchain while an increase in another blockchain (taken for reference) shows that users are abandoning the first blockchain.
Daily Transactions
Blockchain transactions are mostly used for transferring crypto and investment. They are not used for trading purposes, because for trading, mostly exchange wallets are used.
A decline in daily transactions over a period of time shows that users might not find the blockchain favorable for usage.
In the case of Harmony, we can see from the above graph that transactions have declined since last week of May when the blockchain transactions were above 100k per day. However, by early October, the transactions fell below 25,000.
Though a peak in transactions occurred on July 21, 2023, this was likely a one-time event and the number of daily transactions failed to pick pace.
Why is Harmony in Decline?
Harmony is a blockchain which was designed to create Dapps and also to address the slow speed of Ethereum. The blockchain depends on sharding which helps increase throughput and speed on the blockchain.
After the creation of Zero-Knowledge Rollups and Optimistic Rollups, there was not much demand for sharding. Further, Ethereum is also taking steps towards implementing sharding on its blockchains which is driving users back to Ethereum.
What should Harmony holders do?
Taking a close look at the blockchain, it is clear that the current churning in the crypto markets is diverting demand to more trusted and well known solutions where top players like Ethereum shine above all.
Further, the purpose of creating fast and high throughput blockchain was needed because top blockchains were slow and expensive to transact. Now that most of the top blockchains like Ethereum have solved their issues through multiple technologies like Optimistic Rollups and ZK Rollups, these altcoins and alternate blockchains are losing relevance.
It seems that this abandonment might continue in the future.
