According to findings from Electric Capital’s “Developer Report,” there has been a significant decline in the number of new developers entering the cryptocurrency sector over the past year, with a drop of nearly 50 percent. The report also reveals that experienced developers who have been in the industry for more than a year contribute more code and work for more days compared to those who have left.
As of June 1st, the cryptocurrency ecosystem has an estimated 21,300 monthly active open-source developers. However, this number reflects a 22 percent reduction from June 2022. It’s important to note that the decrease primarily stems from the departure of “newcomers” – developers who were in the industry for less than a year.
The departure of these newcomers had a relatively minor impact, as they were responsible for less than 20 percent of all code commits over the last 12 months.
Over 80 percent of code commits in the cryptocurrency sector can be attributed to long-term developers who have been working in the industry for more than a year, according to the report.
Since June 2022, approximately 7,700 newcomer developers have left the cryptocurrency space. In contrast, there has been an increase of 1,650 emerging developers who have been involved in the industry for up to two years and a smaller increase of 150 established developers with over two years of experience.
The decline in newcomer developers is primarily attributed to a reduced number of coders seeking opportunities in the cryptocurrency field. This trend has been further exacerbated by a bear market that has affected the broader cryptocurrency markets.
The analysts suggest that while the retention rate of new developers in 2023 has been lower than in previous years such as 2022 and 2021, this trend is not out of the ordinary when looking at a longer time frame. According to them, developers who join the industry during bear markets tend to leave faster. In fact, cohort retention data from 2015 supports this claim.
Usually, new developers join the cryptocurrency sector during market peaks. Examples of this include a massive influx of new developers, representing 70 percent, six months after the January 2018 cryptocurrency market peak and a 60 percent increase in newcomers six months following November 2021’s market all-time high. Conversely, during bear market conditions, emerging and established developers tend to dominate the cryptocurrency industry.
In the second half of 2022, the cryptocurrency industry faced a wave of layoffs as companies looked to downsize given the challenging market conditions. However, starting in February 2023, there was a decline in layoffs.
