Are Daily Active Addresses Misleading Crypto Investors?

The term "Daily Active Addresses" (DAA) is frequently misused in the crypto world, often confused with "Daily Active Users."

Experts are advocating for the discontinuation of DAA as a metric for fundamental analysis due to its misleading nature.

DAA measures the number of unique crypto wallet addresses involved in at least one transaction per day, but it does not accurately reflect actual user activity, particularly in bot-heavy networks like Solana and Base. A single user can control numerous addresses, inflating DAA figures and misleading perceptions of blockchain vitality.

Solana has become a favorite for bot operators due to its high liquidity and Maximum Extractable Value (MEV) dynamics, which often exploit genuine users. Developer Robert Sasu claims MEV acts as a form of theft, necessitating protective measures to support developers and users.

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Critics have labeled Solana’s approach as “fake it until you make it,” with reports of false accounts inflating its Total Value Locked (TVL). Current data reveals that over 80% of Solana’s active addresses have traded less than $10, indicating poor user quality. Analysts like Dan Smith from Blockworks Research warn against relying on DAA, calling it superficial and easily manipulated.

As the crypto industry evolves, metrics like DAA may not effectively represent user engagement and should be viewed with skepticism. Investors are encouraged to critically assess all metrics to avoid misleading conclusions.

Kosta Gushterov