A quarter of developers left crypto — but here’s why that’s not a bad thing (2024)

A new report by web3-focused venture firm Electric Capital found a significant drop in the number of monthly active developers in the last year, with a nearly 25% decrease to 22,411 compared to 2022.

Developer activity is often seen as a measure of value creation in the crypto space. Despite challenges like bear market conditions and the allure of the emerging AI sector, most experienced developers — those with at least a year under their belt ­— remain committed to blockchain development.

But for the least experienced developers — those who have been working in crypto for less than a year — the scenario is quite different.

The report points out that the high turnover among the least experienced developers in the crypto sector is linked to the bear market’s impact.

Electric Capital’s cohort retention analysis shows shows that those developers who start their careers during a bear market are more likely to leave sooner than their counterparts who join in more stable market conditions.

Experienced developers grew 16%, according to the report. This growth trend is in keeping with the steady increase in established developers who choose to remain in the industry as seen over the last five years Indeed, growth figures for the most tenured blockchain developers is up over 52% in the last five years.

“Experienced devs push more code: 75% of code is created by developers in crypto 1+ years,” the report said.

EVM chains hold sway

While multichain development has increased 10-fold since 2015, much of that activity is concentrated in Ethereum and other blockchains that run on the so-called Ethereum Virtual Machine. That includes blockchains like Avalanche, Fantom, and Polygon.

EVM networks are similar to Ethereum and they use the same smart contract logic. That makes developers on Ethereum more likely to migrate to other EVM blockchains and vice versa. EVM blockchains account for 87% of multichain developer activity, as per the report.

Ethereum layer 2 blockchains — Ethereum scaling networks that rely on the mainnet for security — saw the most crossover among developers from across all EVM networks. Developers working on layer 2 blockchains like Arbitrum, Starknet, and Optimism saw the greatest level of crossover in this regard.

BNB Chain and Polygon also drew from the crowd of multichain developers with roots in Ethereum. At least a third of Ethereum multichain developers deployed code on Polygon and BNB Chain.

“71% of contract code is initially deployed on Ethereum.”

— Electric Capital Blockchain Developer Report 2023

Ethereum the most unique

Ethereum stands out as the dominant player among EVM blockchains, boasting 7,864 monthly active developers, although this represents a 25% decline from the previous year.

The report highlights that the smart contract codes deployed on Ethereum last year were predominantly unique, with most not being deployed on any other EVM platforms.

Moreover, 71% of EVM contracts are initially launched on Ethereum, reinforcing its role as the leading source of new on-chain logic for other networks.

What about Bitcoin?

Most blockchain development happens on Bitcoin, Ethereum, and the top 200 crypto projects by market capitalisation, with Bitcoin and Ethereum accounting for 40%, according to the report.

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Bitcoin has seen a notable decrease in its developer activity, with 1,071 monthly active developers currently, marking a 19% reduction from the previous year’s figures.

This decline is primarily attributed to the departure of part-time Bitcoin developers and those who are involved in multiple blockchain projects.

But the report also found that developers dedicated exclusively to Bitcoin were more likely to remain engaged in the platform.

While Ordinals caused a transaction spike on Bitcoin, it did not translate to significant developer interest, attracting only 3% of devs with most of their colleagues focused on Bitcoin layer 2 networks and other scaling networks.

The US loses more ground

As crypto adoption spreads across the globe, so also is the distribution of blockchain development talent across the globe.

“74% of crypto developers live outside of the US.”

— Electric Capital Developer Report 2023

Seven out of every 10 blockchain developers are outside North America and the United States has lost 14% of its share of the global blockchain dev market since 2018, the report said. The US now only accounts for 26% of blockchain developers compared to 40% in 2018.

Europe and Central Asia are now the major global hub for blockchain development with 36% of devs from this report, per the report.

With more blockchain developers outside North America, the distribution of talent has undergone a meaningful shift. India and Nigeria have seen the highest growth in developer count over the last five years.

Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.