As the crypto market tries to recoup its 2021 highs, it is surging, and investors have returned to the market. However, it is different for software developers. The number of active crypto developers contributing to open-source crypto projects has decreased by 22% in the last year. A recent report found 21,300 active developers in June, lower than the 27,200 reported last year.
Developers that left were mostly newcomers
The Electric Capital report explains that most developers who left the crypto space had little experience. Meanwhile, new people that came into the crypto space as developers in less than a year experienced the most departure, with 7,730 logging off since last June.
According to the research, crypto developers who haven’t made any contributions to a project in more than two months are considered to have left the crypto realm. Although 7,730 may seem considerable compared to the total number of active open-source crypto engineers, the research emphasizes that newcomers account for fewer than twenty percent of all code commits. Instead, most commits are from open-source developers with more than a year’s experience in the cryptocurrency space. This number has increased from 11,300 to about 13,100 over the past year, or around 16% among the more experienced crypto workers.
On the other hand, the number of developers looking into crypto projects for the first time is lowering. Compared to 5,900 in May last year, 2,900 developers have entered the crypto development space this year over the same period.
Crypto developers that joined in 2023 have also not remained for a long time. In 2021, new developers had a retention time of 6 to 10 months, while in 2022, it was 3 to 6 months. In 2023, the retention period was only 3 to 4 months.
Crypto developers are seeking opportunities elsewhere
The notable drop in crypto developers could have resulted from better opportunities elsewhere, as Miles Deutscher, a DeFi addict and crypto analyst, put it in a Twitter post. He said that even with prices rising since January, developers appear to be switching to other booming tech sectors, such as AI.
Deutscher also pointed out that the drop could be attributed to less money from venture capitalists and fatigue. Institutional investors appear to be looking to invest in AI instead. A JP Morgan survey showed a mega difference in sentiment in February, whereby traders mentioned that AI might have more influence than crypto during the next three years.
Mysten Labs co-founder and CEO Evan Cheng supports this in his research, noting a preference shift in venture capitalists from crypto to AI. He notes that products leveraging AI will have more consumers than those in crypto catering to people in the digital asset space already.
The report, however, suggests that the talent entering the crypto space is not a warning sign. New people in the space have dominated in the last two crypto market peaks, but the momentum shifts back to veterans each time. Six months after January 2018 crypto market peak, they dominated by 70%, while seven months after November 2021 market ATH, they dominated by 60%.
While there was a drop in project developers, some saw significant growth. Over the last year, compared to June 2022, Sui Network developers grew by 159%, Aptos Network by 90%, Osmosis by 56%, TON by 102%, and Aztec Protocol by 267%.
