The cryptocurrency sector has experienced a significant decline in the number of new developers entering the industry, according to the latest Developer Report from Electric Capital. The research reveals a nearly 50% drop in newcomers over the past year, indicating a shift in the cryptocurrency developer ecosystem.
As of June 1, the report estimates that there are approximately 21,300 monthly active open-source developers in the cryptocurrency space. However, this figure represents a 22% decline compared to June 2022. Notably, the decrease is primarily attributed to the departure of developers classified as “newcomers” who have worked in the industry for less than a year.
While the departure of these newcomers has had some impact, it is relatively minimal in terms of code contribution. Developers with over a year of experience in the cryptocurrency sector are responsible for more than 80% of committed code, while the departing newcomers accounted for less than 20% of code commits over the past 12 months.
According to the Developer Report, around 7,700 newcomer developers have left the space since June 2022. In contrast, there has been an increase in emerging developers with up to two years of experience, totaling 1,650, and established developers with over two years of experience, totaling 150.
The report attributes the decline in newcomer developers to a reduced interest in exploring cryptocurrency development opportunities. This trend has been further influenced by the ongoing bear market, which has affected the broader cryptocurrency markets. However, analysts note that this decline in new developers is not abnormal in the context of longer-term trends.
Historically, newcomer developers tend to enter the cryptocurrency sector during market peaks. For instance, after the market peak in January 2018, there was a 70% dominance of newcomer developers six months later. Similarly, following the all-time high in November 2021, newcomer dominance was at 60% in the subsequent six months. In contrast, emerging and established developers tend to dominate the sector during bear market periods.
The second half of 2022 witnessed industry-wide layoffs as companies downsized in response to challenging market conditions. However, data from Cointelegraph’s market research indicates a decline in layoffs since February 2023, suggesting some stabilization within the cryptocurrency industry.
While the decline in new developers entering the cryptocurrency sector raises concerns about future talent and innovation, the presence of committed, long-term developers remains a driving force in the industry. Continued efforts to attract and retain new talent will be crucial for the sector’s growth and development in the years to come.
