Starknet Usage, Activity Plummet Despite Upgrades and Incentives

Despite initiatives aimed at boosting usage, Starknet has experienced a significant decline in user activity since its mid-February airdrop. Daily active addresses have dropped from over 100,000 to around 20,000, while transaction processing has also decreased substantially to around 1 transaction per second. Furthermore, the total value locked (TVL) has been declining, and the STRK token has plummeted to an all-time low of $1.26.

Starknet Network Usage and User Activity Decline Despite Recent Upgrades and Initiatives

Amidst efforts to enhance network utilization and minimize fees following the implementation of Ethereum's "Dencun" upgrade, Starknet, an Ethereum Layer 2 (L2) solution, has witnessed a significant decline in user activity.

Subsequent to its mid-February airdrop, the network has experienced a notable drop-off in daily active addresses, averaging approximately 20,000 currently. This represents a substantial decrease from the over 100,000 active users recorded between August and December 2023.

The decline in engagement persists despite initiatives aimed at stimulating user activity, such as Starknet's "DeFi Spring" program. This initiative was intended to distribute 40 million STRK tokens to participating DeFi protocols over a six to eight-month period. However, its impact on network participation has yet to materialize significantly.

The airdrop itself sparked controversy due to its eligibility requirements, specifically the stipulation that users needed to hold at least 0.005 ETH in their wallets on November 15, 2023. This requirement excluded numerous active users who had focused on providing liquidity to decentralized exchanges on Starknet and therefore did not meet the ETH threshold.

Community response to this situation has been mixed, with some users expressing dissatisfaction at being unjustly excluded from the airdrop despite their contributions to the network.

Starknet's recent "Dencun" upgrade, which significantly reduced transaction fees on the network and many other Ethereum L2s, has failed to revitalize network usage to the extent anticipated by some.

Data from L2BEAT reveals that Starknet is currently processing approximately one transaction per second, while its historical average has been around three to six transactions per second. This indicates a steep overall decline.

Furthermore, the total value locked (TVL) measured in ETH has also been on a downward trajectory, dropping from 450,000 ETH on March 29 to 330,000 ETH by April 16. The network's TVL currently stands at approximately $1.67 billion, with the STRK token notably constituting 85% of the total.

The STRK token's performance has likewise been lackluster, plummeting to an all-time low of $1.26. This represents nearly half its value at the time of the airdrop, when it was hovering around $2.