The big gainers of the next crypto Bull Run are being built right now so which Projects and Protocols are continuing to Build despite the bear Market well That's what the latest crypto developer Report from VC firm Electric Capital is Focused on and in this video I'm going To summarize the report for you reveal Which crypto projects have been the most Productive and tell you what this could Mean for the crypto Market Thank you electric capital's crypto Developer report is almost 200 pages Long as such I'll be sticking to key Points for the sake of time and Sanity If you want the nitty-gritty I'll leave A link to the full report in the Description along with the videos we did About previous Electric Capital reports Now the report begins with a brief Explanation of the methodology as you Might have guessed Electric Capital used Open source crypto code on GitHub to Track developer activity in case you're Wondering yes they accounted for Non-original code developers using Multiple accounts and most coding Bots Even so the author's cautioned that Quote not all commits are created equal For example committing code to modify a White paper or update a list of Associated crypto projects on GitHub is Not the same as committing code to Create a Cutting Edge use case or
Improve existing blockchain or protocol Code In the executive summary the authors Eloquently explain what I said in the Introduction quote developers build apps That deliver value to users killer apps Attract customers and those customers Bring more developers because crypto is Significantly open source we have an Unprecedented ability to measure Developer adoption and fundamental Traction in an emerging industry To give you a taste of what's coming I'll quickly share one of the key Takeaways 72 percent of crypto Developers are working on projects or Protocols that are not part of Bitcoin Or ethereum's ecosystems not only that But 50 of D5 developers are outside of Ethereum which is a seriously Interesting finding and with that let's Dig in so the first part of the report Gives an overview of the entire Ecosystem of crypto devs and Begins by Celebrating crypto's 14th anniversary This is of course marked by the first Bitcoin block which was produced at Around 2 30 pm on Thursday the 8th of January way back in 2009. as you can see The number of crypto devs was mostly Flat until the 2017-2018 bull market the Authors specify that it took seven years For the crypto industry to surpass 1000 Devs in the subsequent seven years
Crypto has added a whopping 22 000 devs And Counting Not surprisingly Dev activity is highly Correlated to the crypto Market what's Surprising is that Dev activity doesn't Seem to drop after the bull market top In 2019 Dev activity remained steady and Even started to grow and it's possible We will see the same phenomenon again in 2023 the biggest difference between Previous crypto cycles and the current One is that the number of devs almost Quadrupled in the current cycle the Number of devs only pulled a 2.5 x which Is consistent with the diminishing Returns on large cap cryptos the most Important takeaway in this section Appears to be the fact that the number Of devs has only declined by around 11 Whereas prices have declined by more Than 70 percent this works out to a 3X Sustained increase in devs compared to The previous cycle top and to clarify All the dev statistics I've talked about So far are a reference to active devs Specifically monthly active devs now the Following infographic shows you how many Devs actually joined the crypto industry Each year since 2014. last year the Number was over 60 000. what's fascinating is that 50 of Monthly active devs joined just last Year the catch is that 50 of monthly Active devs only commit one to ten days
Per month now some may take this as a Sign that they're being lazy which is Perhaps to be expected given the current Crypto Market condition Editions the Authors however are more optimistic They assume devs who only commit one to Ten days per month are part-time workers Conversely devs who work 10 to 28 days a Month are assumed to be full-time Part-time and full-time devs currently Have roughly 500k monthly code commits Naturally full-time devs are Contributing The Lion's Share at over 350k commits per month the remaining Commits come from part-time devs who Come and go as crypto prices rise and Fall interestingly the number of Part-time and full-time devs both Increased by roughly 8 percent in 2022 The all-time high for Dev activity was In June last year at over 26k this is Likewise interesting because it was Shortly after Terror collapsed I wonder If this is because crypto Debs was Scrambling to make sure their crypto Projects were completely disconnected From terra's ecosystem more about what Happened to Terra in the description now Considering that the crypto industry Apparently added 60k devs last year this Begs the question of why there are only Around 23k monthly active devs now the Authors reveal it's because the 40K or So devs who left were part-timers or
Those who had only contributed crypto Code once as I mentioned earlier only 28 Of these 23k devs are working on bitcoin And ethereum this percentage has also Been constant in recent years Meanwhile the percentage of devs working On the top 200 crypto ecosystems by Value has grown and 72 percent of devs Are now working there This ties into the second part of the Report which gives an overview of Dev Activity in the largest crypto Ecosystems by value starting of course With Bitcoin and ethereum This image shows you what the authors Mean by crypto ecosystem using Ethereum's optimism layer 2 as an Example now although the number of Bitcoin devs has grown over the years it Remained flat at around 900 in 2022 Bitcoin's Dev growth has also been Relatively slow with only 100 added to Its ecosystem since 2017. consider That's more than five years ago as a Brief aside many crypto investors Believe that bitcoin's lack of Dev Activity is why BTC will go the way of The dinosaurs I strongly disagree Because btc's purpose is to be a store Of value and this doesn't require many Devs to achieve or maintain bitcoin's Blockchain is also the most secure more Importantly there are lots of layer 2 Projects building on bitcoin such as the
Lightning Network which could Revolutionize payments and provide Privacy the only problem is that issuing Tokens related to bitcoin is verboten Hence why it's harder to find funding For such promising projects more about The lightning Network in the description Moving on now while the number of Bitcoin devs remained flat in 2022 the Number of ethereum devs grew by about Five percent to just under six thousand The authors note that most of the crypto Devs that ethereum lost only committed Code to ethereum Once still it's scary To consider that 15 000 devs joined the Ethereum ecosystem in 2022. logically This means that more than 50 percent of Those devs left ethereum's ecosystem This is consistent with the 55 losses That Electric Capital calculated for Reference 30 percent were one-timers What's even crazier is that ethereum's Ecosystem only accounted for 16 of all The new devs in the crypto industry the Caveat is that the crypto devs which Join alternative crypto ecosystems don't Stick around for nearly as long Regardless of whether they're Full-timers or part-timers also the Full-time Dev headcount of ethereum's Ecosystem is still twice as large as the Second largest ecosystem which is polka Dot at just under 800 devs in third Place we have Cosmos at around 600 and
Solana comes in fourth at roughly 400. Again this is for full-time devs the Authors then zoom in on crypto Ecosystems with 100 to 300 devs in first Place we have polygon at 260 which Should arguably be part of ethereum in Second we have kusama at roughly 250 Which should arguably be part of polka Dot and in third we have near protocol At 200. regarding the smallest crypto Ecosystems the authors note that osmosis Ethereum's arbitrum and ethereum's Optimism saw the largest growth in Full-time devs in 2022 I repeat that I Personally think osmosis should count as Cosmos's ecosystem and arbitrum and Optimism should be ethereums now before You get too upset you should know that These rankings look a bit different when The authors include the total Dev count Ethereum is still first at around 5700 But Solana comes in second with around 2200 with polka dot in third at two Thousand and Cosmos in fourth at around 1800. this makes me wonder whether Solana's comparatively low full-time def Count has to do with the fact that Solana is reportedly very difficult for Devs to code This could mean that the part-time devs Aren't actually part-time they're just Struggling to commit code that's worth It more about Solana in the description Back to the report now after those four
We have Bitcoin at 900 devs near Protocol at around 830 kusama at around 630 and binance's BNB at around 600. as Expected the crypto ecosystems that saw The largest gains in total devs in 2022 Were sui Aptos Mina and osmosis I really Hope you guys are taking notes Now the authors go on to ask a pertinent Question what happened to terror's devs They explained that the number of devs Building on terror's blockchain peaked At around 180 shortly before the death Spiral of its UST stablecoin When the crash occurred the number of Active Terror devs fell down to 80. when Terra 2.0 was announced the number of Active devs exploded back up to almost 160 before crashing down to 40. the Total number of Terra devs currently Stands at around 70 and appears to be in An uptrend I suppose dokwon got the gang Back together in Serbia or wherever Jokes Aside more than 50 percent of Terror's pre-crash devs threw in the Towel after Luna and UST went to zero The other 45 or so went to other crypto Ecosystems with a third going to Cosmos A third going to Terror 2.0 and the Final third going to unspecified crypto Ecosystems Then after comparing current crypto Dev Metrics against those from the 2018 Crypto bear Market the authors present This amazing picture it shows you the
Growth in full-time devs that's full Time for different crypto ecosystems Over time from when the first code Commit was published to GitHub the Picture is a bit messy but it's clear That polka dots growth has been very Impressive and by that I mean its Dev Count has grown faster than ethereums Did when it was getting started polkadot Also seems to be the only crypto project That's managed to maintain a larger Growth rate than ethereums The authors then zoom in on newer crypto Projects and protocols this is where Start net which is again arguably part Of ethereum Aptos and the BNB chain Reigns Supreme unfortunately development On the BNB chain has since stalled and The correlation appears to be very close To crypto prices The authors go on to underscore the fact That 37 of crypto ecosystems with more Than 50 full-time devs are leveraging The ethereum virtual machine or evm for Smart contracts these numbers are Debatable because as we've seen many of These evm projects belong in ethereum's Ecosystem it looks like the reason why The authors insist on segregating these Ethereum projects into their own Ecosystems is because their own analysis Suggests that most evm devs stick to a Single evm chain this flies in the face Of the popular narrative that evm devs
Copy and paste from ethereum if I Understand correctly projects on Ethereum's polygon side chain are the Least likely to be copy and pasted to Other evm chains this makes sense Considering that polygon is basically a Copy of ethereum that is extremely fast And the polygon itself provides lots of Funding to projects that commit to it More about polygon in the description Now on the other side of the spectrum You have Avalanche whose projects have Seen the most deployments to other evm Chains this again makes sense because Avalanche's ecosystem had the most Exposure to Terror this includes the Avalanche Foundation itself which lost a Lot when Terror collapsed evm projects That have deployed to other evm chains Have overwhelmingly chosen optimism and Arbitrum as their number one Destinations this makes sense Considering that both layer twos will Soon be seeing a massive scalability Upgrade when ethereum introduces dank Sharding sometime in the summer In the third part of the report the Authors touch on popular crypto use Cases now this section focuses a lot on Ethereum and it starts with the authors Showcasing the ethereum dapps that have Generated the most fees these are the Openc nft marketplace the uni swap decks And tethers usdt stablecoin based on
These top contracts the authors conclude That nfts and defy are the most popular Use cases in cryptocurrency at the Moment This might sound like a biased Assessment but remember that we're Talking about 2022 here Other smart contract cryptocurrencies Didn't see that much activity anyways The authors reveal that there are almost 4 000 D5 focused devs as of December 2022. this is down from a high of over Four and a half thousand which was hit Last January They highlight the fact that this growth Is a 2.5 X increase compared to the D5 Summer of 2020 when the niche became Popular now when it comes to defy Ecosystems outside of ethereum the Authors make it clear that there wasn't Nearly as much activity Cosmos D5 was in Second place with only around 500 devs Significantly fewer than ethereum Solana D5 was in third with just under 400 devs To be fair not that bad all in all then 50 of defy devs are working in Ethereum's ecosystem with the remainder Working on other competing smart Contract cryptocurrencies now this might Sound disheartening if you're a fan of The competitors but you should know that Ethereum's defy Dev dominance fell from 70 in 2020 as for nft devs there are Only around 900 scattered across the
Crypto ecosystem this is down from a High of almost 1200 early last year Oddly enough the number of nft devs Hasn't really declined over the last Year by contrast the number of defy devs Declined by almost 10 percent further Investigation by the authors found that The stable count of nft devs is due to The fact that an increasing number of Part-time nft devs offset the number of Full-time and one-time devs who left I Suspect these devs are associated with All those big Brands launching nfts So this brings me to the big question And that's what the findings of electric Capital's crypto Dev report mean for the Crypto Market well for starters it Suggests that crypto is truly here to Stay it's too soon to say whether all The devs that were gained will remain But I bet most of them will it also Suggests that crypto projects with lots Of funding have been the least affected By the bear Market this includes Existing Blue Chip crypto projects like Polygon Solana and near protocol it also Includes potentially future Blue Chip Crypto projects like Aptos and sui the Descendants of Facebook's Libra However there are exceptions to this Rule like polkadot and Cosmos if you Watched our video comparing both crypto Projects you'll know they're actually Surprisingly similar now the ability to
Continue building a Dev base despite Having significantly less funding is Another quality both projects share call Me crazy but I think this is concrete Evidence that polka dot and Cosmos have The most committed communities and Therefore the most productive ecosystems The fact that we didn't see fireworks From either dot or atom during the Previous crypto cycle suggests the next One will be their time to shine the only Thing I'll caution is that there's a Real possibility that we haven't seen The bottom of the current crypto bear Market yet if the crypto Market Continues to crash or even just move Sideways it could have a negative impact On dev retention for all crypto projects And protocols there's also the very real Risk that Regulators in the United States specifically the SEC will crack Down on some of these crypto projects SEC chairman Gary Gensler is Out For Blood and he's made it clear that every Crypto project and Company bar Bitcoin Is a target even stable coins now I Honestly have no idea what an SEC Lawsuit would do to a crypto project or Protocol's Dev activity but it's safe to Assume that it wouldn't be in the least Bit positive Thankfully this risk seems far off for The crypto projects and protocols that Topped the active Dev leaderboards but
Hey only time will tell us that for Certain [Music]
