Web3 Developers Departing, Yet Thriving Ecosystems Emerge: Where’s the Growth?

Web3 Developers are leaving

According to a recent report released by Electric Capital, an investment firm specializing in Web3, the number of open source developers working in the crypto space fell to 19,300 in the month ending October 1, 2023, a 27% year-over-year decrease. The report also found that developers who recently left the crypto space have been with the company for less than 12 months on average.

 

The Bottom Line:

Number of Monthly Devs by Years in Crypto / Electric Capital
Number of Monthly Devs by Years in Crypto / Electric Capital
  • Number of active open source developers per month: As of October 1, 2023, there were 19.3k monthly active open source developers in the crypto space.
  • Year-over-year developer decline: Developers have decreased by 27% year-over-year since October 1, 2022, and by 4% since October 1, 2021. However, since October 1, 2020, developers have increased by 66%.

 

Developer segmentation:

  • New developers (working in the crypto industry for less than a year) decreased by 58%.
  • Emerging developers (1-2 years of experience) increased by 11%.
  • Established developers (2+ years of experience) increased by 5%.
  • Reasons for the decrease in new developers: The decrease in new developers is due to fewer new developers entering the crypto industry.

 

Impact of market cycles:

  • New developers tend to dominate near market peaks.
  • Developers with more than a year of experience (new and old) have an edge in bear markets.
  • Developers who have been around longer commit more code: Developers who consistently contribute code commit the most code (about 75%), are active more days (12 active weeks), and stay in the crypto industry longer (21 months).
  • In comparison, there are some projects where developer growth is more pronounced.

 

Which projects have grown?

(where has the developer ecosystem grown?)

Aztec Protocol, Celestia, Ripple (XRP), Tone, Zcashink, and Starknet have seen year-over-year growth.
Ecosystems that currently have 70+ developers, with positive year-over-year growth in the number of developers per month (September 2023 vs. September 2022):

  • Aztec Protocol: +168% year-over-year growth, now has 76 monthly active developers.
  • Celestia: Celestia: +145% year-over-year growth, now has 81 monthly active developers.
  • Ripple (XRP): +18% year-over-year growth, now has 172 monthly active developers
  • Tone (TON): +8% year-over-year growth, currently has 126 monthly active developers
  • ZKSync: +6% year-over-year growth, now has 229 monthly active developers
  • Starknet: +4% year-over-year growth, now has 517 monthly active developers

 

Why are developers leaving the ecosystem?

It’s hard to generalize, but we can break down the reasons as follows.

1. Economic reasons: Some developers may find it difficult to find economic stability in the Web3 industry and move to other fields. Working in the field of cryptocurrency and blockchain technology, with its high price volatility, can be highly rewarding, but there are also risks.

2. Regulatory and legal issues: The Web3 industry may face legal and regulatory challenges, especially if there are changes related to cryptocurrency regulation, and some developers may switch to other fields due to this uncertainty.

3. Community and project issues: Developers may leave due to internal issues within the projects they’ve been involved in or within the blockchain community. This could be related to project management, communication issues, disputes, collaboration difficulties, etc.

 

But what motivates developers to stay in the Web3 industry?

1. Decentralization and decentralization principles: The Web3 industry values distributed ledger technology and decentralization. Developers will want to work in a decentralized environment, away from centralized authority and control.

2. Financial motivation: Some developers are looking for high financial rewards in the Web3 industry. Participation in cryptocurrency and blockchain projects can lead to token rewards, which can be more financially motivating than typical software development.

3. New technical challenges: Web3 technologies offer new challenges and innovations. Technologies such as distributed computing, smart contracts, and cryptocurrencies provide new opportunities for developers to learn and experiment. And the Web3 industry provides a platform for developing decentralized applications (DApps). These applications work without a centralized intermediary, which can create a more transparent and fairer system.

4. Community engagement: The Web3 industry has a diverse and open community. Developers can engage in idea exchange, collaboration opportunities, and new challenges in these communities.

 

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