Monthly avalanche analysis – May 2022

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Granted, the crypto market was generally not as bad in May as it was in the first four months, most altcoins are still losing a significant amount of their value. Avalanche (AVAX), like other top alts, fell to multi-month lows in May as bearish sentiment prevailed in the market. The token saw a sharp drop in the second week of the month, losing more than half of its value in less than seven days. The AVAX/USD pair therefore bottomed out at $25.70, after which it hovered between $30 and $35 for the rest of the month.

Here’s a closer look at other metrics that show how the Avalanche ecosystem fared in May:

Market Metrics

Market capital

AVAX market performance generally reflects the broader state of Avalanche and Bitcoin’s price action. The altcoin’s market capitalization printed a strong downward trend in the first two weeks of the month. The decline became gradual until May 28, when it recovered slightly.

Earlier this month, Avalanche’s capital circulating in the market was $15.3 billion, while the concurrent token price was $58.77. The capitalization figure hit the monthly high of $18.08 billion five days later.

The monthly low came on May 27, when the market capitalization of the Avalanche Network fell to $6.34 billion after a gradual decline over the month. The January 2 figure of $27.87 billion remains the highest market capitalization on record this year, with numbers at the end of May standing about 74% below that peak.

Blockchain and network metrics

Avalanche C Chain Transactions

The number of daily C-Chain avalanches transactions has remained consistently above 800,000 since mid-March, and the trend continued into May. The count remained relatively even throughout the first days of the month before registering a catastrophic fall as the markets crashed around mid-May.

The Avalanche blockchain recorded 798,532 transactions on the first day of the month, and that figure swelled by 17% to a monthly peak of 934,030 on May 6. The numbers slowed and rose steadily for about a week, then the plunge began. Within 10 days, daily transactions quadrupled to 225,201 on May 22.

The monthly low came a week later on May 29, when there were 201,939 on-chain transactions c.

Avalanche C-chain Unique Addresses

The total number of unique addresses is a measure of a network’s activity, and for Avalanche, this metric continued the historical pattern of an increasing sum in the total number. Number of unique addresses on Avalanche’s smart contract chain grew from 2,634,725 addresses at the start of the month to 2,932,804 addresses as of May 30. This increase represents an addition of 298,079 unique addresses, or 34% more than the addition recorded in April.

Average gas price (AVAX)

The network average gas price reached some of the highest levels recorded in 2022 this month, with the figure topping 200 nAVAX for the first time since August 2021.

Channel C’s average gas price rose to 212.09 nAVAX on May 11, the highest charge all year. The next day the recorded cost was 183.53 nAVAX, also a feat that has not been achieved since the beginning of the year.

Notably, thereafter, it only took a few days for the numbers to redefine the price drop, with May 14 seeing gas prices fall to levels below April’s lows (57.05 nAVAX). On May 17, Avalanche gasoline prices were at a May low, with numbers hitting 37.15 nAVAX, nearly six times lower than the monthly peak.

Using the Avalanche C-chain network

The network usage of the C Avalanche chain steadily increased month after month during the first quarter of the year, but the narrative changed in May.

Channel C’s network usage was 45.38% at the start of the month, but hit a monthly high of 46.86% on May 7. The decline started afterwards. It was stable in the early days, but from May 13 things got bumpy. A rapid decline set in, with the network tumbling to a monthly low of 10.55% on May 29. Notably, usage remained below 20% from May 20 to the end of the month.

DeFi performance

DeFi market share

Avalanche ranked number four in market share for most of May, only reaching number three after Terra’s implosion. However, Tron’s surge moved Avalanche for market share and pushed them to sit fourth again.

Earlier this month, Avalanche experienced a market share of 4.58%, which then increased to 4.83% as the network rose to third place on May 12. Less than two weeks later, Tron (4.65%) toppled Avalanche – 4.04% market share on May 23.

As of May 31, Avalanche’s market share had fallen further to 3.7%, following a downward trend that had been recorded in the last days of the month.

Total value locked

The Total Locked Value (TVL) on any blockchain represents the overall value of the assets locked in its decentralized finance protocols. As of May 31, Avalanche’s TVL was $4.1 billion, down 54.11% for the month. Notably, Avalanche had the worst performing DeFi ecosystem of the top five networks last month.

Starting the month with $8.93 billion in TVL, the figure peaked at $9.28 billion on May 5, before the crisis began. The channel hit a monthly TVL low of $3.95 billion on May 28, marking the first time the network has recorded a TVL below $4 billion since October 2021.

The channel’s TVL, measured in AVAX, recently hit new highs – a rise Avalanche attributes to “innovative builders keep shipping” in a share Tweeter.

Protocol performance

Major Avalanche protocols posted massive drops in TVL compared to the end of April.

Among the top ten protocols on Avalanche, loan protocol AAVE V3 saw its TVL drop a further 26.42%, passing the billion mark to reach 964.28 million in value. Decentralized trading platform Trader Joe, after losing 33.47% in April, fell another 52.64% in May, taking its market capitalization to $408.32 million.

Third-ranked Platypus Finance also saw a massive drop of 53.9% in the month-to-month swing ending May 31, with TVL falling to 377.62 million.

Notably, AAVE V3 holds a 23.53% dominance over Avalanche, and yield farming platform Curve saw the biggest decline of the top ten protocols, registering a change of -72.92%.

To learn more about Avalanche, check out our Investing in Avalanche guide.

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