Blockchain developer market becomes more centralized post-FTX, data shows

As someone who has been closely following and participating in the crypto world since its early days, I must say that the shift towards experienced developers is both exciting and concerning at the same time. It’s thrilling to see how far we have come, yet I can’t help but miss the days when everyone was a newbie, eager to learn and contribute to this revolutionary technology.

It appears that the landscape for blockchain developers is undergoing change: there seems to be a decrease in new developers joining, while seasoned developers are increasingly taking on most of the projects, according to Electric Capital’s study findings.

As an analyst in this domain, I can attest that blockchain developers play a pivotal role in the cryptocurrency industry. They design applications and tools that entice users, thereby generating value and fostering growth. The influx of more users naturally attracts more developers to join the fray, creating a self-perpetuating cycle. However, contrary to the decentralized ethos of crypto, the developer market seems to be trending towards centralization. In other words, experienced developers are increasingly taking the reins, according to Electric Capital’s latest research report.

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Fewer active developers

The count of blockchain developers actively engaged has seen a significant decrease. In the month of November 2022, there were approximately 31,000 active developers. However, by November 2024, this number dropped to 23,160, representing a 25% reduction over a two-year period.

It was primarily part-time developers and newcomers who experienced the most significant downturn. In November 2022, there were 16,600 part-timers, but this figure decreased to 12,386 by November 2024 – a drop of nearly 4,200 developers. Similarly, newcomer developers saw a dramatic decrease from 18,547 in November 2022 to just 8,986 two years later – a reduction of more than half.

Instead, let me rephrase that for you: While newcomers are still learning the ropes, experienced developers with over two years under their belt have been thriving. Over the course of those two years, the number of these seasoned professionals grew from 6,903 to 11,400, marking a significant 65% expansion in their ranks.

As an analyst, I would rephrase Andrew Morfill’s statement as follows: “I, Andrew Morfill, CIO of Zodia Custody, a digital asset custodian supported by Standard Chartered, believe that the decrease in part-time and new blockchain developers may be due to factors such as market fluctuations and growing complexity resulting from the maturation of the market.

The intricacy of this technology demands a more comprehensive grasp, which might initially seem overwhelming to beginners. However, it’s worth noting that this complexity also seems to encourage developers who are already part of the market to invest further and stay committed. Similarly, established institutional customers are increasingly deepening their involvement, while newcomers are still finding their footing. The point at which widespread adoption will truly take off is not yet fully evident.
Andrew Morfill in the conversation with crypto.news

Morfill proposed that the actions of developers usually trail behind broader market price fluctuations, anticipating a turnaround in the first half of 2025 from the current downturn. He further mentioned that although fewer new developers may temporarily diminish the flow of innovative thoughts and diverse viewpoints, the presence of seasoned developers could create an atmosphere where “newcomers and occasional developers have access to skilled mentors and solid structures for growth.

In simple terms, Francisco Andreolí, who leads the developer group at Consensys, linked the decrease in part-time and new developers to the growing technical requirements of blockchain projects. He emphasized that these projects frequently necessitate specialized skills and continuous dedication.

To address this issue, we need to provide additional education, guidance, and user-friendly resources to draw in the upcoming generation of web3 professionals and make this evolving sector more approachable. It’s important to strike a balance between utilizing skilled developers and nurturing new talents for sustainable growth.
Francesco Andreolí in the conversation with crypto.news

Andreolí also emphasized the significance of a mature ecosystem and user-friendliness in blockchain development. He mentioned that although the tools for blockchain development are advancing, they sometimes lack the finesse and ease of use found in more established ecosystems, which can make it difficult for part-time developers to contribute effectively. To tackle this issue, Andreolí suggested, “We’re creating pre-configured environments such as command line interfaces (CLIs) to streamline the onboarding process for new developers and replicate optimal web2 developer experiences, thus reducing barriers to entry.

The leader of Consensys’ developer community underlined the importance of addressing the issue of exclusivity often associated with blockchain development, explaining that it can discourage beginners, especially those lacking a strong technical foundation. He advocated for promoting inclusivity and developing resources to make blockchain development more accessible to all, stating that such actions are crucial for fostering innovation and diversity necessary for the industry’s future expansion.

Established developers gain share

As a researcher delving into the latest trends in software development, I recently had the opportunity to examine Electric Capital’s comprehensive “2024 Developer Report.” This groundbreaking analysis scrutinized an astounding 902 million individual code commits, spanning across a staggering 1.7 million repositories. The findings underscore the increasing impact of seasoned developers within our rapidly evolving industry.

Experienced cryptocurrency developers, who have been active in this field for more than two years, are currently reaching record levels, with a year-over-year growth rate of 27%, and they account for approximately 70% of all coding contributions, according to the latest findings.

In essence, although the total number of developers is decreasing, there’s an increasing proportion of experienced developers handling more tasks. The study additionally revealed that approximately 39,148 novice developers ventured into crypto in 2024; however, this growth among beginners fails to compensate for the departure of part-time developers and those exiting the field.

Andreolí warned that such a change might concentrate power within a limited circle of contributors, potentially posing threats to the overall system.

Division within ecosystems, where developers require distinct abilities like using Rust for certain blockchains and Solidity for others, introduces extra hurdles to cooperation and encourages a narrower range of involvement.
Francesco Andreolí

Andreolí additionally voiced worries regarding the “uniformity of invention,” pointing out that over-relying on seasoned developers may result in solutions molded by pre-existing frameworks, which might suppress the inventiveness arising from fresh perspectives and various experiences. This could potentially hinder the creativity typically fostered by newcomers and individuals with diverse backgrounds.

To tackle these issues, Andreolí highlighted the significance of nurturing joint efforts across different chains via open-source initiatives, community-led decision making, and instruments that encourage decentralized innovation. He stressed that these actions serve to “empower developers within communities, allowing them to contribute significantly to the overall developer experience.

Simultaneously, Morfill posits that the increasing influence of seasoned developers is a “natural indication of the industry’s maturity.” However, he also notes that “decentralized development may be more of a concept than a reality, considering the relatively few individuals managing some key entities within the web3 and DeFi space.

In the coming years, platforms like Solana are expected to serve as valuable entrances for the next phase of developer adoption, along with projects and institutions. By 2025, it’s essential that these entities have ecosystems built around core components, projects, and protocols. This implies that cross-chain functionality and interoperability will be crucial and will likely become the foundation for projects aiming to grow.
Andrew Morfill

Where developers live

As a global analyst focusing on blockchain development, I’ve observed a significant shift in the landscape. Once upon a time, North America held the leading position, but recent trends show that Asia has taken the reins, becoming the dominant region in terms of developer share. This change has led to North America sliding down to third place. Despite this, the United States continues to be the top nation for blockchain developers, accounting for 18.8% of the global pool. However, it’s important to note that this figure represents a substantial decrease from the 38% share it held back in 2015.

2024 saw India taking a leading role in the development world, as it welcomed the highest number of new developers and accounted for approximately 11.7% of the global developer market share. Notable countries with substantial developer communities include the United Kingdom (4.3%) and China (4%), while Canada follows closely at 3.8%.

Developers diversify across chains

Currently, a larger number of developers are engaged in creating various blockchain systems compared to the past. Back in 2015, only about 10% of developers were involved in working on multiple blockchains. But by the year 2024, it’s estimated that approximately one third of all developers now collaborate on several different blockchains.

Ethereum (ETH) maintains the most significant developer community overall, according to the data. Interestingly, Solana (SOL), however, is drawing in more novice developers, as its developer base expanded by a whopping 83% in 2024, making it the leading destination for newcomers. Simultaneously, Bitcoin (BTC) development remains consistent, with approximately 42% of developers focusing on scaling solutions.

Use cases expand

Different blockchains attract developers based on specific use cases:

Ethereum: Leads in total developer activity and remains a hub for decentralized finance.
Solana: Dominates decentralized exchange usage and is a leader (64%) in low-fee use cases like NFT/meme coins minting.
Coinbase’s Base: Responsible for 42% of the “new code being written in the Ethereum ecosystem” and owns 97% of NFT minting volume.

It’s worth noting that the areas of stablecoins and reinvestment (re-staking) are expanding rapidly. Currently, there’s about $195 billion worth of stablecoins circulating, and daily transactions reach over $80 billion. In the re-staking sector, driven primarily by projects such as EigenLayer, the number of full-time developers has increased by 130% in the year 2024, according to recent reports.

What this means for space

While the shift toward experienced developers shows that the industry is maturing, it also raises concerns about centralization. As newcomers decline and established developers dominate, the industry could become less diverse.

This downward trend mirrors broader difficulties within the market. The 7% decrease in total developers in 2024 suggests that some are departing due to market instability or diminished opportunities, especially after the severe hit caused by the FTX crash. The repercussions of its bankruptcy are still being felt across the industry today.

Electric Capital’s report positions developers as a “forerunner of value generation,” underscoring the importance of maintaining high developer engagement in the blockchain sector, as its decrease might negatively impact the progression of blockchain technology in the long run.

2024-12-23 19:07