Stacks’ TVL story is way too interesting for STX holders, know why
- Stacks TVL surged considerably despite prices going south.
- Interest in NFTs started falling after the weighted sentiment metric declined.
Stacks [STX], the layer 1 solution for Bitcoin, has been on the receiving end of positive developments with Ordinals and Inscriptions in the fore. It’s trite now to say- with the introduction of these new products, the Stacks ecosystem has benefited immensely.
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Notably, Stacks’ growth can be gauged by its TVL which has shown a significant spike in the past month, reaching a value of $26.34 million at the time of reporting.
Despite losing 22% for the week, $STX TVL is still smashing all-time highs.
— Emperor Osmo? (@Flowslikeosmo) March 26, 2023
Even though a rising TVL is a sign of a budding ecosystem, things could come crashing down soon. According to Artemis’ data, the number of daily active addresses on the network declined sharply over the last few weeks along with the number of transactions that were occurring on the protocol.
Staking up problems
In addition to reduced activity, the interest in staking on the protocol also decreased. Staking Rewards data indicates that the number of stakers on the Stacks network fell by a significant 25.33% in the past month, and at press time it stood at 3,433 stakers.
Stacks was also affected in terms of the fees it collected, particularly from the Ordinals, which constituted a significant portion of the protocol.
Dune Analytics data showed that these fees started to decline in the last month. If this trend persists, it could have a significant impact on the revenue generated by Stacks, thereby limiting the protocol’s capacity to enhance its network.
Furthermore, the Stacks network was also affected in terms of the NFTs trading activity, as per Santiment’s data.
On the other hand, the weighted sentiment metric too noted a decline. This implied that the crypto community had a relatively pessimistic view of the Stacks protocol.
Realistic or not, here’s STX market cap in BTC’s terms
The aforementioned factors also impacted Stack protocol’s token STX. According to Santiments data, the price and volume of STX fell materially over the last few weeks.