Developers still flocking to crypto despite its brutal year


Blockchain financial technology secures cryptocurrencies such as bitcoin for online payments and transactions.

Despite plummeting crypto markets in 2022, Electric Capital’s annual developer report found that full-time crypto developers reached an all-time high last year, with 23,000 monthly individual developers contributing to open-source code.

The report measured the number of one-time, part-time, and full-time developers contributing to 250 million code commits in open-source code repositories, including GitHub and Bitbucket.

“Especially in the bear market, it’s essential to track the health of full-time developers,” says Maria Shen, Partner at Electric Capital and one of the authors of the annual developer report.

The report found that monthly active developers grew 5% year-over-year despite a 70% decline in prices. Now in its fourth edition, Electric Capital compared 2022 numbers to those of the last crypto winter cycle, starting in January 2018. Since then, monthly active developers have increased by 297% across multiple blockchain ecosystems.

The biggest developer growth was seen outside Bitcoin and Ethereum, home to the two largest cryptocurrencies by market capitalization. While both still saw a significant increase to January 2018 levels, ecosystem developers grew by three and five times respectively – Electric Capital found that 72% of monthly active developers work outside the two dominant chains.

Solana, NEAR and Polygon saw the second largest increases, with their developers growing 40% year-over-year, while new ecosystems like Sui and Aptos, both created by ex-Meta employees, grew 50% year-over-year.

Significant growth in these ecosystems comes from full-time developers, who are measured in the report as those contributing 10 or more commits per month. This emphasis, says Shen, boils down to the fact that they contribute the vast majority of the code.

“They keep the lights on, they build the core protocol, and they’re sticking around,” says Shen.

On the other hand, new developers tend to follow price cycles, Shen adds, stating that one-time or part-time developers add code to repositories as a hobby or as part of hackathons. Indeed, 95% of developer churn came from these developers, with most code contributed by full-time developers.

Despite increasing developer numbers, the main issue plaguing crypto and blockchain companies is its varying coding languages and an overall shortage of qualified software engineers. Coding smart contracts requires knowledge of specialized coding languages like Solidity or Rust, which can easily alienate experienced engineers working in traditional Web 2 companies.

“We have to consider quality,” John Wu, president of Ava Labs, the New York-based creator of the Avalanche blockchain, told Forbes in August. “What developers are doing today may not be what we need them to do six months from now.”

But a decrease in prices and a slowdown of the crypto hype may be just what developers needed. “Developers have switched from having to brute force themselves from [crypto winters] to positioning themselves for the next market cycle,” says Gokal.

Solana, this year’s fastest-growing ecosystem, grew by 83%. Gokal points to Solana’s use of Rust as its main coding language as one of the potential reasons for its growth. Despite being 83% down in year-to-year prices, Gokal shares that there was little difficulty finding experienced developers for Solana-based applications.

“The quality ends up being much more highly concentrated with Solana because it attracts developers that are more used to lower level programming languages, like C and C++,” he says, adding that in his experience, it usually takes developers fluent in those languages two weeks to learn Rust.

Full-time developers are also increasingly working across chains, the report found. While most developer accounts still only deploy contracts to one chain, the average number of chains rose to nearly 1.4 in 2022, particularly in Ethereum virtual machine (EVM) compatible chains.

“A lot of ecosystems have more of these cross-chain developers than native developers,” Shen says. Avalanche, for example, lost 28% of primary developers while multichain developers building on the system grew by 8%.

The report also touched on some of the year’s most talked-about events, including the Ethereum Merge and the collapse of Terra.

Ethereum monthly developers grew by five times since the last crypto winter cycle to 5,819, becoming the ecosystem with the largest number of developers and accounts for 16% of all new developers in crypto. Full-time developers, which increased by 9% from December 2021, were mainly in charge of the Merge, which transitioned Ethereum from a proof-of-work mechanism to a proof-of-stake chain.

“These fundamental events mean that the slow and steady developers grow a little bit more slowly because they put in so much work,” says Shen.

Ethereum’s next update—named Shanghai update—is expected to go live in March of this year, allowing withdrawals of Ethereum staked on the chain’s Beacon update.

As for Terra, which topped last year’s list as the highest-growing ecosystem in terms of full-time developers, the report found that 56% of developers that worked in Terra stopped contributing to open-source code after its collapse.

The ecosystem grew 313% from December 2020 to December 2021, accounting for a total of 33 full-time developers. Still, by May 7, terraUSD de-pegged from the dollar, and fell to 35 cents and companion token LUNA fell to 80 cents by May 12. What ensued was not only the collapse of the ecosystem but a massive contagion across the crypto industry that precipitated a $1 trillion decline in the overall crypto market value.

Shen defended the firm’s methodology, saying that “it wasn’t a bug in the code” that led to the collapse. “It was because the financial mechanism of how the stablecoin worked was broken, so that was exploited,” she added.

Following the crash, 42% migrated to other ecosystems, while 9% stayed to work on Luna 2.0. The largest share (13%) went to Cosmos the self-described “internet of blockchains.”