Electric Capital

Number of devs increased during crypto winter: Electric Capital report

Ethereum continues to be the dominant blockchain for developer activity, however, a few other chains continued to gain ground.

The notion that bear markets are good for builders appears to be true, with the total number of monthly active Web3 developers increasing 5.4% to more than 23,300 over the last 12 months despite a near 70% drop in crypto prices.

According to a Jan. 16 report from Electric Capital, “full-time” developers — categorized as those who contribute to 76% of GitHub commits — also increased 15.2% to over 7,000, while “one-time” builders fell 6.2% to over 3,500 during the same time period, between December 2021 and December 2022.

Despite the crypto market capitalization beginning its long plunge from its all-time high (ATH) of $2.9 trillion in November 2021, monthly developer activity only began to fall this past June, after the metric reached its record high of nearly 26,500 active developers.

This fall was partly attributed to the fall in developer activity in the Terra ecosystem following its catastrophic collapse in May.

Monthly active developer count over time compared to crypto’s market capitalization. Source: Electric Capital.

The next three months from June to September saw a 26% fall in weekly active Web3 developers.

Last year did however see 61,127 new Web3 developers come into the industry — the most ever recorded and a 25.8% increase from 2021.

In fact, more new Web3 developers deployed their first line of open-source crypto code in the past year (109,723) than between 2014 and 2020 (101,054).

Monthly active developer count since Bitcoin was launched compared to when Ethereum and its smart contract functionalities were introduced. Source: Electric Capital.

Ethereum continues to dominate developer activity, having increased its full-time developer count by 9% to 1,873 — which is more than the next three highest ecosystems combined: Polkadot (752), Cosmos (511) and Solana (383).

Developer counts on non-Ethereum chains are catching up though. The Cosmos and Solana networks increased 34% and 36%, respectively, while Starknet is among one of the mid-sized ecosystems to have made a solid run In 2022 with a 214% increase in developer count.

Related: Inside the blockchain developers’ mind: Building truly free-to-use DApps

The report also found that following Terra’s collapse only 28 (9%) of the original Terra developers stuck around for Terra 2.0 while 143 developers (42%) called it quits and migrated to other ecosystems.

Many of the former Terra developers migrated to Cosmos, 42 of 143, the most of any other ecosystem.

The number of full-time developers from each ecosystem since their launch date. Source: Electric Capital.

Electric Capital explained there are many more Web3 developers than accounted for in the report, as some projects are close-sourced.

Number of DAOs increases 8x along with spike in votes and proposals

The total number of DAOs has increased dramatically over the past 12 months along with their participation rates, but it may not mean decentralized governance is catching on.

The total number of decentralized autonomous organizations (DAO), the number of governance proposals put forward and the number of votes cast have all seen astounding 8-times growth over the past 12 months.

Data compiled by Snapshot Labs and shared by Electric Capital Engineer Emre Caliskan in a Thursday tweet highlighted that DAO numbers have increased by 8.8 times, from 700 in May 2021 to 6,000 now. The number of proposals has increased by 8.5 times, and the number of total votes has increased by 8.3 times over the past 12 months, from 448,000 to 3.7 million.

Snapshot is a decentralized governance participation portal where DAO members can propose new initiatives and vote on them. The data was compiled in collaboration with Electric Capital, a Web3 investment firm.

While the findings look promising for decentralized governance models, the increase in participation was driven by just a small handful of the most active DAOs. New proposals mostly came from just 10% of DAOs, while 60% of DAOs have had three or fewer proposals since their inception.

Nevertheless, the overall growth is an impressive show of confidence in the DAO structure.

Rival DAO tracking tool DeepDAO has slightly different figures and shows there are only 4,833 DAOS as of Friday.

Related: ApeCoin DAO officially favors remaining within Ethereum ecosystem

Caliskan attributed the increase in new proposals to the popularity and wide coverage of ConstitutionDAO. It was an organization set up last November with the intent of buying an original copy of the United States Constitution. The DAO was outbid at the last moment, but it proved the power such organizations can have.

Most DAO proposals come from just 10% of organizations.

According to DeepDAO, PancakeSwap and Decentraland are the two top DAOs by proposal count, with 3,300 and 1,200, respectively. Only the top 72 organizations have at least 100 proposals at the time of writing.

Despite the overall promising numbers in DAO growth, a Tuesday draft bill from the U.S. Senate could curtail their growth if no changes are made to it. It initially calls for all crypto projects to register with the government and reveal the identities of their users and founders.