- Electric Capital’s latest report notes crypto industry witnesses a 50% decline in new developers over the past year.
- Established developers contribute over 80% of the code, while newcomers who left contribute only 20%.
- Newcomers have decreased due to fewer new developers entering the crypto industry and lower retention rates during bear markets.
Crypto venture capital firm, Electric Capital released a Developer Report on July 6. According to the document, there has been a 50% decline in the number of developers entering the crypto industry over the past year.
The document argues that developers who’ve left the sector were only responsible for a low percentage of code compared to their long-term counterparts still working in the ecosystem. Precisely, 20% of all code was committed by newcomers who’ve left. Meanwhile, “developers who have worked in crypto for 12 months or more continue to build. They contribute 80%+ of commits.”
We can segment monthly active developers by how long they have worked in crypto by comparing the time between their first and last commits. Newcomers: developers who worked in crypto less than 1 year Emerging Developers: developers who worked in crypto 1 to 2 years Established Developers: developers who worked in crypto 2+ years
Electric Capital’s Develeoper report
Moreover, the report indicates that the crypto landscape has observed a 22% fall in the number of developers in comparison to June. Simultaneously, around 21,300 monthly active open-source developers have been estimated till June 1, 2023.
The document also emphasizes that the number of crypto users has increased exponentially, with more users today than “before crypto markets hit an all-time high in Nov 2021.” Nevertheless, the growing user count can’t overshadow the developer numbers, which have dropped 22% since June 1, 2022, which was one year ago. On the other hand, the number has grown by 25% since June 1, 2021, which was two years ago, and 92% since June 1, 2020, which was three years ago.
From June 2022 to June 2023, the industry has observed a loss of 7.73K Newcomer developers, a growth of 1.65K Emerging developers, and an increase of 0.15K Established developers.
Now, one may pose the question – why has there been such a decline in the number of newcomer developers?
Newcomer developers have decreased for a couple of reasons. Firstly, there has been a decline in the number of new developers trying their hand at crypto. In May 2023, approximately 2.9K new developers entered the crypto industry, which represents a decrease of 20% compared to February 2023 (3 months ago), 42% compared to November 2022 (6 months ago), and 50% compared to May 2022 (12 months ago).
Additionally, historical data suggests that developers tend to have lower retention rates during bear markets. When examining the monthly cohort retention of new developers from January 2021, it can be observed that most new developers leave within a certain timeframe. In 2021, the majority left within 6 to 10 months, while in 2022, it was within 3 to 6 months. In 2023, new developers have been leaving within 3 to 4 months.
Finally, the retention rate for 2023 is worse compared to 2022 and 2021. However, when looking at the broader picture and analyzing cohort retention starting from 2015, it becomes apparent that developers who join during bear markets tend to leave at a faster rate. Therefore, the fact that new developers left faster in 2023 than in 2022 or 2021 is a typical trend observed during a bear market.
In addition, newcomers typically dominate the crypto developer community during market peaks, such as after the market peaks in January 2018 and November 2021. Around 6 to 7 months after these peaks, Newcomers held a dominance of approximately 60% to 70%. However, as the market transitions into a bear market, developers with over one year of experience (Emerging and Established developers) start to dominate. This trend is evident around 18 to 24 months after the market peaks, with Emerging and Established developers holding a dominance of around 60%. These patterns reflect the dynamics of market cycles and the changing composition of developers in the crypto industry.
Lastly, while the low number of incoming new developers might be worrisome, developers who have chosen to remain in the crypto industry and continue actively contributing code exhibit distinct characteristics compared to those who have left.
As per the report, these committed developers demonstrate their dedication by consistently committing a larger volume of code, contributing a significant portion of the overall codebase. Moreover, they actively push code on more days, showcasing their consistent engagement and involvement in crypto projects. In addition to their higher code contributions, these developers also tend to have a longer tenure in the crypto industry, indicating their accumulated experience and knowledge over time. It is noteworthy that the percentage of developers who have stopped contributing after March 2023 is relatively low, accounting for less than 20% of historical commits.
This suggests that a substantial majority of developers choose to remain actively engaged in the crypto industry, actively supporting ongoing development and innovation.
