For new investors in the crypto market, it’s important to realize that the next big gainers of the market are currently in the process of creation. So, which projects and protocols will continue to grow despite the onslaught of the bear market? Read further to find out. There have been many reports regarding the crypto projects that have been most productive in the current times of negativity. One of the reports (Electric Capital) also tracked the activity of the developers to predict the tokens that will rise during the next bull cycle.
What Does The Report Have to Say?
Electric Capital’s developer report extends to about 200 pages in length. The report initializes with a short explanation of the methodology. The creators of the report used open-source crypto code on Github, which allowed them to track the activities of the developers. They efficiently tracked multiple accounts, including coding bots and non–original code. Even so, the authors mentioned that not all code commits are equal.
For instance, when you are committing code to alter a white paper, or updating a list of crypto projects on GitHub, it is different from committing code to create a cutting-edge use-case or make an existing blockchain better, along with the protocol code. In the introduction of the report, it says that the developers create applications that are valuable to users and consumers. Good applications attract users, and this ultimately draws more developers.
Since the crypto realm is largely open-sourced, it allows report authors to have a far-reaching capacity to measure developer adoption, along with traction in a rising industry. Most of the crypto developers are working on protocols and projects that do not function on Bitcoin or Ethereum ecosystems. This report finding shows that there is huge upside potential in Altcoins. Not only that, but the report also points out that 50% of developers that work in the DeFi space are coding outside the Ethereum blockchain.
Overview
The starting sections of the report provide an overview of the complete ecosystem of the crypto dev and highlight the successful 14-year run of crypto as an open-sourced network. The number of crypto developers was mostly scarce in the 2017 and 2018 bull markets. In the past couple of years, the cryptocurrency market has catered to 22,000 devs and counting. The activity of the crypto market dictates the emergence of crypto developers.
In 2019, Dev activity remained stable and slowly began to rise. There is a possibility that the same activity will come about in 2023. A huge difference between the previous crypto cycles in comparison to the current one is that the number of developers quadrupled. In the current cycle, the number of devs only showcased 2.5x, which is consistent with the diminishing returns on big-cap cryptos.
Bitcoin and Ethereum
Although the number of Bitcoin developments has risen in the following years, it has still been flat, at around 900 in the year 2022. Bitcoin’s developer growth has also been relatively slow since there have only been a hundred more developers in its ecosystem. Some crypto investors believe that this lack of crypto developer activity is going to be a major reason why Bitcoin is likely to have a downfall in the future. However, other experts disagree with this claim.
It’s important to remember that the purpose of Bitcoin is so that people can have a better store of value assets. This does not require the help of multiple developers. Moreover, Bitcoin’s blockchain is highly secure and scalable. More importantly, you will also find plenty of layer 2 projects that function on bitcoin’s blockchain. One example of such a project includes the lightning network. This project can potentially revolutionize payments and also provide privacy.
While the number of Bitcoin developers remained mostly stable, the number of Ethereum developers on the other hand grew by 5%. The authors have realized that most of the crypto developers have committed code to Ethereum at least once. About 15000 developers joined the Ethereum network to commit code in 2022. This means that about 50 percent of developers must also have left the ecosystem.
This number of developers leaving the platform explains why Electric Capital calculated 55 losses in the Ethereum ecosystem. For reference, about 30% were first-timers, and Ethereum’s ecosystem only holds about 16 new developers.
Most Active Altcoins
The full-time developer headcount that works in Ethereum’s ecosystem is twice as big as the Polkadots ecosystem, which comes second in the developer headcount. Polkadot is just under 800 developers and in third place, you have Cosmos, and in fourth place take Solana. The authors of the report also narrow down the crypto ecosystem to 100 to 300 developers.
Polygon takes the first place in this dev range, with 260 developers. Kusama is at 250, which is a part of Polkadot, and then you have the Near Protocol which has 200 developers. According to the report, Osmosis, Ethereum’s Optimism, and Arbitrum underwent the largest full-time developer growth in 2022.
These rankings tend to look different when the authors include maximum headcount numbers of devs, including both, full-time and part-time developers. In this instance, Solana takes second place after Ethereum with 2200 developers. Solana has a comparatively low full-time developer headcount, which may be because it is difficult for Developers to code.
To Conclude
In conclusion, the Electric Capital developer report provides valuable insights into the crypto market and the potential of Altcoins in 2023. The report highlights the importance of developer activity in the growth and success of crypto projects and protocols. While Bitcoin’s developer activity remains relatively flat, Ethereum continues to attract more developers. Moreover, the report provides a ranking of the most active Altcoins, with Polygon, Kusama, and Near Protocol taking the top spots in the 100 to 300 developer range. Overall, this report serves as a useful resource for investors looking to identify potential gainers in the crypto market in the coming years.