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Home ยป Web3 ยป Are Developers Building? Mid-Year Web3 Report 2023

Are Developers Building? Mid-Year Web3 Report 2023

web3 developer report

This web3 report by Metaschool is based on a study done by Electric Capital till June 1, 2023 and some other resources that will be mentioned as you read on.

Committed web3 developers have gone on to code and deploy projects despite the difficult times the blockchain community has been facing. The onset of the latest crypto bear market occured in March 2022, with the initial trigger for this negative phase being the Axie Infinity $625M bridge hack, followed by the breakdown of the Terra-Luna ecosystem in May the same year.

To understand the implications and also break it down in a much more digestible way, we’ve compiled this web3 report for you. Feel free to share it in your circle.

Active developer numbers dropped for the first time in 3 years

As of June 2022, the number of active developers in web3 had peaked over 27,000. However, that didn’t remain the case in June 2023. The number declined and came down to just a little over 21,000 active web3 developers. ๐Ÿ˜”

A graphical representation of the long-term growth of developers is shown in this web3 report released for the first 6 months of 2023. This can be attributed to several different factors, mainly the controversies that web3 has been marred by and of course, the bear market that followed.

electric capital graph on monthly active developers from 2020 to 2023
We see a long-term growth pattern up till June 2022 but the past year has admittedly been rough because of which we see a drop for the very first time since 2020. Image source: Electric Capital.

As mentioned previously, the Ronin Network (on which Axie Infinity was based) was hacked, which paved the way for a skepticism and a lot of jumping ship to happen. So to look at what else contributed, here’s a list of major 2022 events that were caused by vulnerabilities and which led millions of dollars of losses. Special shout out to for the grift and disasters leaderboard.

Celsius collapse
July 13, 2022

~$1,700,000,000 shortfall

Binance bridge hack
October 6, 2022

$586,000,000 in money lost ($430,000,000 of it recovered)

FTX hack
November 11, 2022

$8,700,000,000 in money lost ($7,000,000,000 of it recovered)

Axie Inifinity
March 29, 2022

$625,000,000 in money lost

Terra-Luna Collapse
May 9, 2022

$40,000,000,000 in money lost

Three Arrows Capital collapse
June 29, 2022

$3,300,000,000 in money lost

Moving on, from the graph we saw above, it became evident developers were abandoning the web3 ecosystem. But who was the majority segment?

Newcomers. ๐Ÿคฆ๐Ÿปโ€โ™€๏ธ

Seasoned developers stay on as newcomers fade away

Let’s take a closer look at the dynamic landscape of web3 developers in the report by focusing on their experience levels and their impact over the past year. These tech enthusiasts have been divided into three groups based on their time spent in the web3 sphere.

  • First up, we have the “Newcomers,” those who’ve delved into the blockchain world for less than a year.
  • Next, the “Emerging Developers,” who’ve been honing their skills in this space for about 1 to 2 years.
  • Lastly, the “Established Developers,” the veterans who boast over 2 years of blockchain expertise.

Interestingly, the scene has witnessed some intriguing shifts. Emerging Developers are on the rise, showcasing a promising growth of 44%, indicating that those who’ve spent a year or two in web3 are enthusiastically contributing.

Meanwhile, the Established Developers are holding steady, maintaining their presence and experience in the field.

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However, the dip in the number of monthly active developers in the past year can be attributed to the Newcomers. This group experienced a decline of 48%, with approximately 7,730 developers stepping back from their web3 development commitments.

For the period spanning June 2022 to June 2023, these changes become even more evident: a drop in Newcomers, a surge in Emerging Developers, and a slight uptick among Established Developers. The developer landscape remains intriguingly diverse and ever-evolving as shown in the web3 report. Let’s also take a look at the graph by Electric Capital below.

A drop in Newcomers, a surge in Emerging Developers, and a slight uptick among Established Developers in web3
A drop in Newcomers, a surge in Emerging Developers, and a slight uptick among Established Developers. Image source: Electric Capital.

Why are newcomers leaving web3 development?

The decline in the number of Newcomer developers in the web3 arena has raised some questions. It seems that there’s been a reduction in the influx of fresh faces eager to explore the world of blockchain. This phenomenon could be attributed to a variety of factors, ranging from market fluctuations to changing interests among the developer community.

Taking a closer look at the timeline of new developer engagement, we can observe a noteworthy trend. In the month of May 2023, about 2,900 new developers took their first steps into the realm of web3. However, this number marks a decline of 20% from just three months prior in February 2023.

Zooming out to a six-month comparison, the drop becomes even more apparent โ€“ a substantial 42% decrease from the count in November 2022. And if we widen our scope to a year, the decrease becomes even more significant, with a staggering 50% reduction from May 2022 which enjoyed 5.9k new developers.

Number of developers joining crypto/blockchain space per month 2015 to 2023.
Number of developers joining crypto/blockchain space per month 2015 to 2023. Image source: Electric Capital

This downward trajectory in new developer involvement paints a vivid picture of a changing landscape. It’s clear that the allure of blockchain for those new to the scene has shifted, prompting fewer developers to take the plunge. Whether it’s due to the evolving challenges of the web3 space, alternative technological interests, or other external factors, the decrease in Newcomer developers certainly warrants deeper investigation.

Also, developers leave faster in bear markets.

The dwindling number of Newcomer developers in the web3 sphere can also be attributed to another factor โ€“ the relatively short stay of those who joined the ranks in 2023. It’s a bit like a revolving door, where new developers enter, but not as many are sticking around for the long haul. This pattern becomes especially evident when we examine the monthly cohort retention of developers from January 2021 onwards in the web3 report presented by Electric Capital.

If we take a moment to observe how long these newcomers tend to stick around before moving on, a revealing trend emerges. In the year 2021, most developers in the cohort would leave within the span of 6 to 10 months. This window narrowed in 2022, with developers tending to stay for 3 to 6 months. Now, in the year 2023, the trend continues to shrink, with developers often departing after just 3 to 4 months.

Developer retention by cohort since 2021 in web3
Developer retention by cohort since 2021. Image source:

Comparing the retention rates of these different years, it’s clear that 2023 has witnessed a worse retention rate compared to both 2022 and 2021. But here’s the interesting twist โ€“ when we zoom out and consider the broader context, the retention rate for 2023 doesn’t seem as outlandishly low. In fact, if we trace the history of cohort retention analysis all the way back to 2015, a striking pattern emerges. It turns out that developers who jump aboard during bear markets โ€“ those periods of cryptocurrency price decline โ€“ tend to make a swifter exit.

Developer retention by cohort in web3 since 2021
Developer retention by cohort since 2021. Image source:

In essence, the pace at which new developers departed in 2023, faster than their counterparts in 2022 or 2021, is a familiar scenario during bear markets. It’s a reflection of the challenges and uncertainties that tend to arise during such times. This shedding of light on the correlation between market trends and developer commitment highlights the intricate dance between economic forces and developer dynamics in the ever-evolving landscape of crypto.

Seasoned developers pushed more code on more days and have been in the game longer than newcomers

A developer is considered to have “left” if they haven’t added any code for a stretch of two months. Remarkably, those who stopped contributing after March 2023 make up less than 20% of historical commits โ€“ a testament to the enduring commitment of many.

Q1 2023 Developers - Numbers of code commits in web3
Q1 2023 Developers – Numbers of code commits. Image source: Electric Capital

Now, let’s uncover the traits that set apart those who continue to enrich the codebase. When we focus on the developers who’ve been active recently, specifically in April and May 2023, a few patterns emerge. First off, these contributors are the driving force behind the majority of code commits, making up an impressive 80% or more. They’re not just occasional participants; they’re the bedrock of progress. Moreover, these engaged developers consistently dedicate more days to their contributions. Unlike a fleeting visit, they’re here day in and day out, pushing the project forward.

What about their background in the crypto realm? Well, it turns out that longevity matters. Those who lent their expertise in April and May 2023 have deeper roots in the crypto space. This insight takes us to an interesting comparison. As we distinguish between those who persisted and those who opted to move on, we can map out the number of active days for each group. The picture is clear: developers who remain active sustain their involvement for around 13 active weeks. However, those who chose to step back only contribute for about 2 active weeks on average.

Q1 2023 Developers - Proportion of code commits
Q1 2023 Developers – Proportion of code commits. Image source: Electric Capital

And the element of experience shines through as well. By examining the time they’ve spent in the crypto domain, we can observe that the developers who contributed in the same period have a significantly longer tenure in the field. To put some numbers to it, those who remain committed boast an average of 19 weeks in crypto. Whereas, those who decided to explore other avenues have around 8 weeks of experience under their belts.

In essence, these insights paint a vivid portrait of what keeps developers engaged and committed in the dynamic realm of coding, highlighting the pivotal role of passion, consistency, and experience.

Which blockchain platforms experienced the highest YOY growth?

Let’s move on from developers now and take a look at blockchain platforms in this web3 report. These thriving ecosystems have experienced remarkable growth in the number of monthly developers, comparing the landscape in June 2023 to that of June 2022. These standout platforms are shaping the future of technology and innovation:

  1. Osmosis
    This ecosystem has witnessed an impressive surge. It marked a remarkable 56% increase in its monthly developer count. With its unique approach and innovative offerings, Osmosis is certainly catching the attention of developers.
  2. Sui
    The growth here is nothing short of astounding, boasting a staggering 159% increase in the number of monthly developers. Sui’s allure lies in its ability to captivate developers, providing a platform for them to thrive and innovate.

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  3. Aptos
    The numbers here showcase a robust expansion, with a noteworthy 90% rise in monthly developers. Aptos is rapidly establishing itself as a hub for creative minds, offering an environment ripe with opportunities.
  4. TON
    This ecosystem has witnessed a compelling evolution. Posting an impressive 102% growth in monthly developers. TON’s rise signifies a shift towards a more dynamic and developer-friendly landscape.
  5. Optimism
    With a solid 27% increase in monthly developers, Optimism is solidifying its presence as an attractive platform for those looking to contribute and create within a thriving community.
  6. Aztec Protocol
    The growth here is nothing short of astonishing, showcasing a remarkable 267% surge in monthly developers. Aztec Protocol’s magnetic appeal is drawing in developers with a promise of innovation and possibility.
yoy growth of blockchain platforms 2023
YoY growth of blockchain platforms. Image source: Electric Capital

To conclude, these blockchain ecosystems stand as beacons of progress, beckoning web3 developers to join their ranks and be a part of the transformative journey that’s shaping the digital future.

We hope you enjoyed reading this web3 report. Wagmi.