- Data from Electric Capital and a16z reveals that the number of active crypto developers is at its lowest since 2020.
- The CTO of a16z said the data report only focused on open-source codes.
Since 2022, the number of active crypto developers in the industry has decreased alarmingly.
A data report from a16z showed that the number of active crypto developers is lower than in 2022.
Between January 2022 and September 2023, over 16,000 crypto developers have left the ecosystem, according to a16z’s State of Crypto Index.
Eddy Lazzarin, CTO at a16z, clarified that the data may not be absolute. He explained that several crypto developers are leaning towards the application layer of crypto projects, which is outside the open-source code data used at Electric Capital.
“In order to track active crypto developers, we use @ElectricCapital’s popular ecosystems project (linked in the next post) to identify crypto-related Github repos,” He explained in a post on X.
He buttressed his point by citing four crypto platforms that a16z recently funded. According to him, the crypto developers working on those projects are coding in private repos in the application layer, which was not accounted for in the data research.
“Our State of Crypto Index also includes an important counter-metric, which is the number of NPM downloads for some key crypto libraries — which hit an all-time high this month. This is why it’s important to use multiple methods to track key metrics,” Eddy Lazzarin stated.
Often, crypto project founders open source their projects to promote decentralization. Open source code data is available to the public.
As the CTO of a16z suggested, other data may contrast with the data report. The crypto developer library download activity tracked by a16z suggests that crypto developer activity may be on its way up. An all-time high of crypto developer library downloads was recorded by a16z last month.
Reasons Why Crypto Developers Are Leaving
It is not surprising that the number of active crypto developers may be reducing.
The raging crypto winter has led to the closure of multiple crypto platforms, resulting in layoffs.
This year records one of the highest rates of layoffs in the crypto industry. Crypto developers are often affected by the layoffs, resulting in a lack of developer activity on the Blockchain.
The job market in the crypto space has become unstable due to the bear market. This challenge may deter interested developers from migrating to the crypto industry.
The lack of financial stability due to crypto volatility contributes to the challenge. Crypto developers are often paid in cryptocurrency, and the volatility of crypto tokens sometimes makes financial stability unattainable.
The lack of regulatory clarity also contributes to the decreasing number of active crypto developers.
Regulation in Blockchain is still at its roots; the uncertainty it wields has led to the migration of crypto firms from hostile environments to crypto-friendly countries.
The legal case involving Tornado Cash developers is an example of regulatory uncertainty in the blockchain industry, especially in crypto software development.