The crypto market faced widespread losses in May 2022, as poor performance throughout the first four months of the year was compounded by sharp declines during the first two weeks of May. This volatile environment led many investors to adopt a cautious, wait-and-see approach. Ethereum, the second-largest cryptocurrency by market capitalization, was not immune to this bearish trend. Compared to previous months, both the Ethereum network and its native token, ether (ETH), underperformed across most key metrics. ETH recorded a monthly decline of approximately 27.80%, marking its worst monthly performance since the beginning of 2022.
For context, major altcoins also experienced significant drops—down 15.45% in April and 19.20% in March. This article provides a comprehensive analysis of Ethereum’s performance during May 2022, covering market dynamics, blockchain activity, and DeFi developments.
Market Metrics
Market Capitalization
Ethereum’s market capitalization followed a downward trajectory throughout May, mirroring the price decline of ETH. At the start of the month on May 1, Ethereum had a market cap of $356.2 billion**. It briefly peaked at **$337.4 billion on May 12 but then entered a sustained downtrend. By May 24, the market cap had dropped to $222.1 billion, its lowest point for the month.
The lowest valuation occurred on May 27, when Ethereum’s market cap fell to $208.5 billion—the lowest level since early 2021 and the first time the leading smart contract platform dipped below this threshold in over a year. As of the end of the month, Ethereum maintained a market dominance of 17.35% within the broader cryptocurrency ecosystem.
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Ether Supply Growth
Despite price volatility, the total supply of ether continued to grow steadily throughout May. At the beginning of the month, the circulating supply stood at 118,906,787 ETH. This growth reflects ongoing issuance from block rewards, uncle rewards, and uncle inclusion rewards, partially offset by token burns from EIP-1559 transactions.
By May 31, the total supply had increased to 119,218,683 ETH, representing a net addition of 311,896 ETH over the month. This marks an acceleration in supply growth compared to April, which saw an increase of only 279,972 ETH. The sustained supply expansion highlights the network’s active transactional throughput despite macroeconomic headwinds.
Blockchain and Network Metrics
Daily Transactions
Transaction volume spiked during the initial days of market turmoil in May, as holders rushed to sell assets amid falling prices. The highest daily transaction count occurred on May 13, reaching 1,342,405 transactions—the second-highest single-day total recorded for Ethereum in 2022.
After this peak, transaction activity gradually declined. The lowest daily volume was observed on May 7, with only 1,051,489 transactions processed. By month-end on May 30, transaction numbers had settled at 1,065,407, indicating reduced on-chain activity following the early-month sell-off.
Unique Addresses
The number of unique addresses interacting with the Ethereum network provides insight into user adoption and ecosystem engagement. At the start of May, there were 194,930,328 unique addresses. Over the course of the month, this figure grew by 2,691,757, reaching 197,622,085 by May 31—a 1.3% increase.
The highest number of unique addresses was recorded on May 10, while the lowest daily count occurred on May 1. This steady growth suggests continued interest in Ethereum-based applications despite unfavorable market conditions.
Daily Active Addresses
Daily active addresses closely track transaction trends and reflect real-time user engagement. On May 13, active addresses peaked at 641,750, aligning with the highest transaction volume of the month. This surpassed the previous 2022 high set on April 18 (639,040 active addresses).
Conversely, activity dipped to its lowest level on May 30, with just 418,023 active addresses—continuing a trend of sub-500k daily activity that began in late April. This contraction signals reduced short-term participation amid market uncertainty.
Average Transaction Fee (USD)
Ethereum’s average transaction fees are historically high compared to competing blockchains. In May, fees were heavily influenced by the launch of Otherside NFTs, a highly anticipated project that caused severe network congestion over a weekend early in the month.
On May 1, average fees surged to an all-time high of $200.06 due to intense bidding activity during the NFT minting event. Although most of these fees were burned under EIP-1559, users still faced exorbitant costs to interact with the network.
Fees declined significantly afterward but saw another spike around May 12–13, likely due to renewed trading activity during market volatility. The lowest recorded fee for the month was $3.73 on May 28, representing a 98.14% drop from the peak.
Average Network Hash Rate
The average network hash rate—a measure of Ethereum’s mining power—continued its upward trend in May. At the start of the month, hash rate stood at 1,082,118.5 GH/s. It reached a monthly high of 1,126,674.3 GH/s on May 13, reflecting strong miner participation despite declining token prices.
The lowest hash rate was observed on May 7, dropping to 1,060,736.6 GH/s. The overall growth indicates resilience in Ethereum’s proof-of-work security model ahead of the upcoming transition to proof-of-stake.
DeFi Performance
Market Share
Despite broader market declines, Ethereum strengthened its dominance in the decentralized finance (DeFi) space. On May 10, Ethereum’s DeFi market share surged to nearly 64.13%, up from 55.72% earlier in the month.
This growth came at the expense of competing blockchains like Binance Smart Chain (BSC) and Solana, whose DeFi ecosystems saw reduced inflows. Ethereum reversed a long-standing trend of losing DeFi market share and reasserted itself as the leading platform for decentralized applications.
BSC ranked second with 8.04% market share, followed by Solana at 5.42%—the only other chains exceeding 5%.
Total Value Locked (TVL)
While Ethereum gained market share, its Total Value Locked (TVL) declined by approximately 37% during May. TVL peaked early in the month at $1113.3 billion** but fell sharply to a low of **$66.87 billion by May 28.
MakerDAO remained the dominant protocol throughout the month, accounting for a significant portion of locked value through its DAI stablecoin system. Curve Finance ranked fourth in TVL but led among protocols focused on stablecoin swaps.
Other top protocols included Lido Finance and Aave, with TVLs of $8.01 billion** and **$7.8 billion, respectively—highlighting continued confidence in liquid staking and lending platforms even during downturns.
Frequently Asked Questions (FAQ)
Q: Why did Ethereum’s price drop so sharply in May 2022?
A: The decline was driven by macroeconomic factors including rising interest rates, inflation concerns, and risk-off sentiment across financial markets—impacting both crypto and traditional assets.
Q: Did Ethereum’s fundamentals weaken during this period?
A: No—despite price drops, core metrics like unique addresses, hash rate, and DeFi market share showed resilience or improvement, indicating underlying network strength.
Q: How did NFT launches affect Ethereum’s network performance?
A: The Otherside NFT mint caused temporary congestion and record-high transaction fees, but also demonstrated sustained demand for Ethereum-based digital collectibles.
Q: Is Ethereum still the leading DeFi platform?
A: Yes—Ethereum regained over 64% of the DeFi market share in May 2022 and hosts the majority of top-performing protocols by TVL.
Q: What does supply growth mean for ETH investors?
A: Steady supply increases reflect ongoing network usage; however, future deflationary pressure may emerge post-Merge due to reduced issuance and continued burning.
Core Keywords
- Ethereum
- Ether (ETH)
- Market capitalization
- Transaction fees
- DeFi
- Total Value Locked (TVL)
- Unique addresses
- Network hash rate
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