Contrary to what one might expect, the third quarter of this year saw a decrease in XRPL network activity, even though the price of XRP experienced an upswing. The daily demand for XRP has been on a downward trend in recent times.
The Surprising Downturn in XRPL Network Activity
A report from Messari revealed that the XRPL, a decentralized distributed ledger, experienced a slump in network activity during Q3. This unexpected downturn occurred even as XRP’s value soared following a July ruling by the U.S. Securities and Exchange Commission (SEC) that XRP couldn’t be classified as a security.
After the ruling, XRP’s value skyrocketed by over 70% within hours, peaking at $0.82 on July 20. The total rise in the alt’s price from July to September led to a 12% quarter-over-quarter increase in the token’s circulating market capitalization.
Decline in Daily Transactions and Active Addresses
However, despite the surge in demand for the native token, Messari observed that the XRPL network activity metrics across the board fell in Q3. The average count of daily transactions on XRPL from July to September was 1.06 million, marking a 9.1% quarter-over-quarter drop from the 1.16 million recorded in Q2.
The count of daily active addresses saw an even more significant drop, plunging by 19% from 54,000 to 44,000 during the same period. Messari noted, “Average daily values for transactions and all types of active addresses reached yearly lows in Q3.”
Growth in the Non-Fungible Token (NFT) Vertical
Despite the overall decline, Messari found that the protocol’s non-fungible token (NFT) vertical saw some growth during the period under review. The average count of daily NFT transactions completed on XRPL rose by 7.3%. Among these transactions, NFTokenBurn transactions, used to remove an NFToken object from the NFTokenPage in which it is being held, saw the highest growth at 135%.
Transactions to create new NFTs followed closely behind, surging by 13% during the quarter. However, other NFT transaction types like NFTokenCreateOffer, NFTokenAcceptOffer, and NFTokenCancelOffer fell by 7.0%, 7.4%, and 2.0% quarter-over-quarter, respectively.
In the current market rally, XRP is trading at $0.5453 according to CoinMarketCap data. Over the last week, the alt’s value has risen by 6%. Following the token’s price peaking at $0.58 on October 24, it began a decline. An on-chain analysis of its network activity revealed a steady decline in new demand and the count of active addresses for XRP.
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