Despite the fall over the previous year, there are still over 1,600 people working on creating the best-decentralized applications and blockchains today.
Bitcoin Sentiment Quickly Reverses:
The Federal Reserve meeting on Wednesday boosted the cryptocurrency market, but Thursday’s events gave it a reality check.
The largest cryptocurrency, Bitcoin (BTC), fell 2.6% during the past day to around $17,400, mirroring American market trends.
The second-largest cryptocurrency overall, Ether (ETH), a resident of the Ethereum network, dropped 3.6% to $1,262. CMI, the Market Index, fell 2.4%. With a 10% drop, Optimism’s OP token was among the greatest losers.
The Federal Reserve, while lowering the rate of interest-rate rises, still has a long way to go before it can call an end to its drive to wring out inflation. To prevent expectations of increased wages from becoming entrenched, the Fed will need to see a fairly big increase in unemployment before price hikes can moderate. Premature expectations of a swift turnabout by Fed Chair Jerome Powell and his colleagues may exist. Funding rates, a crucial indicator of market sentiment for crypto derivatives, are still pointing down.
Insights:
According to the financial data portal Token Terminal, the number of daily active developers working on leading blockchains and decentralized applications (dapps) has plummeted by about 57% this year.
According to data from Token Terminal, which counts daily totals, approximately 3,700 developers were active daily in January, up from almost 1,600 on December 14.
The loss has occurred as other cryptocurrencies, including ether, the token of the Ethereum blockchains, have fallen precipitously from record highs reached just over a year ago. The second-largest cryptocurrency by market capitalization, ETH, was recently trading at around $1,300, down 64% from the beginning of the year when it was still hovering around $4,000. Since several projects have failed and investors are becoming more risk averse, there have been fewer projects developed on the Ethereum platform than during the bull market of 2021.
According to Chris Eberle, an angel investor and contributor at Coordinate and PleasrDAO who goes by the Twitter handle DeFi Ginger, “it’s not shocking to see an overall reduction among daily active devs.” “2022 has been nothing but punches for cryptocurrency. The effects on the market and the reputation of cryptocurrency, in general, are harsh.
The failure of centralized lender Celsius and the recent collapse of crypto exchange giant FTX, according to Eberle, have generated “one big ball of agony” for the industry and have also caused a decrease in the number of active developers.
Ethereum:
Ethereum now has the most daily developers among blockchain protocols and dapps, at 192 as of December 14. With 144 and 143 active developers, Cardano and Cosmos are ranked second and third, respectively. There are 18 active developers for Bitcoin, the largest cryptocurrency by market capitalization.
Although the protocol insisted in a tweet last month that thousands of developers are working on the platform, Token Terminal claims that Solana experienced the highest loss, going from almost 2,500 workers in January to only 75 developers at the time of writing. Eberle stated, “Something doesn’t add up. Before [the FTX crash], Solana “went off a cliff.”
“Others seem to have some decline,” he continued, “but it could very well be seasonal since we’re now in the holiday zone.”
Based on the “number of distinct GitHub users that made 1+ contributions to the project’s GitHub repositories throughout the past 30 days,” Token Terminal determines who is an “active developer.”
Since mid-summer, the total number of active developers in the cryptocurrency industry has remained stable between 1,500 and 1,600, indicating that a core of committed, well-funded individuals continue to believe in the potential of blockchain technology.
Conclusion:
Despite the decline over the past year, 1,600 developers are still building blockchains and decentralized apps in this bear market.
