The metric known as “Daily Active Addresses” is frequently confused with “Daily Active Users” in the cryptocurrency industry, leading to misunderstandings among enthusiasts. Experts are cautioning against relying on “DAA” for evaluating user activity in fundamental analyses, and recent data supports this advice.
While often associated with daily active users, Daily Active Addresses (DAA) actually measures the number of crypto wallet addresses that have engaged in at least one transaction within a day. This distinction is crucial, particularly in bot-heavy networks like Solana and Base.
It’s important to note that a single user can control multiple addresses, artificially boosting the count of daily active addresses. This could be for deceptive purposes to make a chain seem more valuable or for profit-driven motives, taking advantage of features like Maximum Extractable Value (MEV).
Critics have pointed out the issues with MEV dynamics in Solana, which have made it a favored platform for bot operators due to its high liquidity. The prevalence of bots manipulating transaction failures has tainted metrics like DAA, leading to concerns about the integrity of data.
The misuse of DAA is not limited to Solana, as other networks like Near Protocol and Ethereum’s Base have also displayed questionable metrics. Reports highlight inflated DAA figures that may not accurately reflect user engagement or network health.
Experts warn against relying solely on metrics like Daily Active Addresses for investment decisions or gauging a project’s success. Such metrics can be easily manipulated, and it’s essential to approach them with skepticism and critical analysis.
In the rapidly evolving crypto landscape, the industry should adapt its reporting standards to reflect the nuances and complexities of blockchain technology. Investors and traders should exercise caution when interpreting metrics and seek a more holistic understanding of a project’s fundamentals.