According to a report released by venture firm Electric Capital, there has been a 22% decline in the number of active developers involved in open-source crypto projects. In June, the total count of active developers was 21,300, down from 27,200 in the previous year.
On Twitter, Miles Deutscher, a self-proclaimed DeFi enthusiast and crypto analyst, suggested that the decrease in the number of crypto developers over the last year could be due to more attractive career prospects in other fields.
“Despite prices rising since January, developer activity has exhibited a downturn,” he said. “This may be attributed to […] developers switching to other booming tech sectors like AI.”
Insights about industry trends can be obtained by examining the source and frequency of developer activity over time in open-source projects, where code is openly published on online platforms. Developers leave their marks in software repositories through commits, allowing researchers to analyze their contributions and understand the evolving landscape.
According to the report, the majority of developers who left the crypto industry had little experience working in the field. Specifically, newcomers who had been working in crypto for less than a year accounted for most of the departures from the sector, with a total of 7,730 individuals logging off since June of the previous year.
As per the report’s definition, developers who have not made any contributions to a project in over two months are considered to have left the crypto industry. While the number of departures, which amounts to 7,730 individuals, may seem significant compared to the total count of active open-source crypto developers, it is worth noting that newcomers contribute to less than 20% of all code commits, as highlighted in the report.
Electric Capital has reported that open-source developers with over a year’s worth of experience working with crypto are responsible for the majority of the code commits. The report shows that the number of such experienced developers has risen from 11,300 to 13,100 over the past year, suggesting growth of almost 16% among the more skilled individuals in the crypto industry.
According to the report, there has been a decline in the number of developers venturing into crypto projects for the first time. In May of this year, the count stood at 2,900 new developers joining the space, whereas during the same month the previous year, there were 5,900 newcomers. It is worth noting that this figure from a year ago was close to an all-time high for monthly entrants.
Deutscher, in his statement, suggested that exhaustion and a decrease in funding from venture capitalists could also be contributing factors.
In fact, institutional investors are showing a growing interest in AI as well. According to a survey conducted by JP Morgan in February, traders expressed a noticeable shift in sentiment, stating that AI is expected to have a greater impact than crypto in the next three years.
Evan Cheng, the co-founder, and CEO of Mysten Labs, has stated that there is a definite shift among venture capitalists moving from crypto towards AI. This trend is becoming more evident, as it is believed that products utilizing AI have a wider appeal among consumers than crypto products, which are typically targeted toward individuals already involved in digital assets.
The report suggests that the departure of emerging talent from the digital assets industry should not necessarily be seen as a cause for concern. In the past, newcomers have taken over the digital assets space following previous peaks in the crypto market. However, momentum has typically shifted back towards industry veterans each time. Hence, this pattern indicates that the shift in talent is a natural occurrence and not an alarming trend.
