While 2022 saw a significant drop in cryptocurrency prices, developer activity that year paints a more optimistic picture for investors. As of December 15, Ethereum had the highest number of full-time developers in 2022 with 1,873, according to new data released by Electric Capital on Tuesday. According to Coin Metrics, it is down 67%. Ethereum rivals such as Polkadot and Solana followed closely behind, showing 9% and 36% growth respectively. For Solana, that growth has come despite the network facing moments of success or failure in the wake of his FTX scandal. Last year its price fell 50% of his, but the strength of the developer community has given investors hope that it can survive. Meanwhile, the number of Bitcoin developers has fallen by 4%, but he still has 300 full-time builders, making him the fifth largest number on the market. “From a developer perspective, cryptocurrencies are more than Bitcoin,” said Abishalgarg, co-founder of Electric He Capital, which invests in early-stage cryptocurrency and fintech companies. “Bitcoin is like a digital commodity. As a platform, it was not really designed for ease of use, scalability, and construction.” It may be the most decentralized network out there, but 90% of developers are building on top of other blockchains, he added. The Stacks ecosystem dedicated to building on has seen a 20% decrease in full-time developers. Why it Matters to Investors A developer’s activity is an indicator of the network’s usefulness and potential for its end users. The more developers that build not only the blockchain itself, but more importantly, build user applications on top of it, the more likely it is to grow and sustain its user base. Nick Hotz, vice president of research at Arca, said he believes developer activity is a key indicator of price for that reason. Garg compared it to the early days of Apple, Google, and other mega-capped tech companies as we know them today. “They spent a lot of their time courting developers because they thought that if you could get all the developers, you could get all the apps, and that apps really are the moat that surrounds phones and operating systems. Because I understood,” he said Garg. “This is a proven thing for computing platforms. We need to get all the developers.” This is especially important as the industry is still out of the FTX debacle. Many want a new era of crypto innovation and investment driven by utility and real-world use cases rather than price speculation. For comparison, Amazon employed about 36,000 developers at this time last year, while Goldman Sachs employed his 9,000. Electric Capital didn’t include comparative figures in this year’s report, but Garg noted that many large companies, in some cases, have seen some of these crypto networks grow their developer base. Bitcoin Outlook Bitcoin’s price will drop by about 64% in 2022, and in recent years, some investors have been buying cryptocurrencies to offset their price volatility. I came to criticize it as nothing more than an asset to monitor. It’s easy to conclude that these things have pushed developers away from Bitcoin, both Garg and his Hotz, his 4% decline in developers over the past year is likely to be temporary in the near future. It is implied that it may look like “These are really strong numbers,” he says Hots. “Single-digit losses or single-digit gains, compared to a year of steep price declines, show that people are sticking around,” Garg similarly said of the decline in developers. It’s “quite surprising” that the performance numbers are flat after being in the current bear market for over a year. He also expects growth to become “vertical again” in the next upcycle, noting that the last crypto winter of 2018 had a similar flat trend. A lot of new developers come in and often end up being retained,” he said. “It’s easy to unwind trades…really hard to unwind career decisions.”
