Electric Capital: Developer Report ETH Denver 2023 with Maria Shen

which has 185 slides of charts which I have tried my very best to condense down to 80 slides of charts so I will just be going through really rapidly I hope you like numbers super quickly Electric Capital we are an early stage crypto focused VC firm um that's us we have actually this is not you know this is just a sampling of this is just our team who contributes to the developer report but we actually have over 300 contributors that make the data possible which is really incredible our team is 70 engineers and it's our thesis that the number of developers in the space is one of the most fundamental measures of what's actually happening in crypto and the momentum of what is exactly happening in crypto so you know why is it that developers are so important well it's because crypto has a very unique open source ethos Bitcoin launched as open source code ethereum is open source um crypto is the only emerging industry that's growing so fast and yet most of it is transparent at its peak it was a three trillion dollar industry most of the most important code is public and with public code means that we can look at who are the developers who are actually building on them and how many developers exist so in order to put this report together we analyzed over 200 million code commits that are all all open source uh crypto code um one very major caveat is that it's only open source meaning that closed Source developers are not included who's a closed Source developer coinbase developers are closed Source uh Magic Eden open C blur all closed Source developers a lot of games have closed Source developers so none of those developers will be in the numbers that you're going to see okay anyways without further Ado let's go through the 80 something charts that I have um we're 14 years into the creation of Open Source crypto so this is satoshi's original Forum post where he talked about um the open source he he open source the C plus plus code for Bitcoin encouraged everyone to run and know to take a look at it and since then what's happened in the crypto space it took us seven years from when ethereum launched to uh when sorry when Bitcoin launched to when ethereum launched um to get you a thousand monthly active Developers a monthly active developer is a developer who commits code in a 28-day period so it took us seven years to get to a thousand monthly octave developers what's happened since then is that in the second seven years that crypto has been around we actually added 22 000 more monthly active developers which is absolutely incredible and we are at by the end of December 2022 we're at 23 343 monthly active developers in crypto um over the course of 2022 we grew monthly active developers by five percent and a lot of people are very curious how developers respond to Market Cycles so the blue line is the number of monthly active developers in crypto and the gray line is um crypto Network value what you can see very clearly here is that monthly octo developers increase alongside market prices in a market cycle so in this 2017-2018 period you can see developers prices increasing and developers increasing similarly here in the 2021 and 2022 period you can see developers increasing and prices increasing together but I think the interesting thing is what happens after that as prices increased in the last Market cycle we actually gained more than 8 000 monthly active developers so that by the by this kind of developer Peak we had just over 10 000 monthly active open source developers working in crypto and this time around we started from that 10 000 number and the developer all-time high happened June of 2022 which is just a little bit after after Tara's collapse and that was 26 323 monthly octave Developers this means that since the last developer developer Peak to the 2022 developer Peak we increased monthly active open source developers by 141 percent so here's what I think is is really the actual like fascinating kernel here which is that developers actually stay even when Network values are down yes developers do come in when prices come in but developers do not leave when prices are depressed and you can see this very clearly here right in this um you know as we all uh probably very viscerally experienced um when prices fell more than 70 percent developers fell only 11 percent and that's how we keep accruing these developers over time and in the last cycle it was actually um you know prices actually fell more than 90 percent in this cycle over here and developers stayed flat so what this means is that um you know monthly octave developers prices actually by the end of 2022 went back to January 2018 numbers but developers grew close to 300 percent okay so that was an overview of developers now let's talk about new developers how many new developers are actually entering crypto as of December 2022 so over the course of just sorry over the course of 2022 we saw 61 127 new developers who has who have never touched open source crypto code ever commit to open source crypto over 2021 and 2022 I actually saw more than a hundred thousand new developers do something in open source crypto and if you compare that with the last Market cycle in 2017 and 2018 that was only 44 000 new developers and so each wave is getting bigger for developers to come into crypto 52 percent of monthly active developers um started contributing in 2022 actually so these new developers are actually um a huge number of the contributors that we're seeing all right but not to all developers are created equal how do we measure developer activity so we can look at activity by frequency and by the volume of commits um this is basically what you get when you try to graph all developers over a snapshot of 28 days and all this is saying is that 30 of all developers only have one day of contribution fifty percent of developers contribute two to nine days and 20 of developers contribute 10 plus days so another way to understand this is um is how we've decided to segment developers here which is one time part-time and full-time developers full-time developers you can think of as the developers who are um you know paid by the Dows they're working full time on a team contributing open source code a part-time developer you can kind of understand as a hackathon participant or someone who's working on a project nights and weekends a one-time developer from what we've seen generally someone who is updating documentation or updating their validator profile so they pop in and then you generally don't see them again this is a graph of all monthly commits in crypto and so we're actually by the end of 2022 at close to half a million monthly open source commits in crypto and if you segment who's actually doing the committing you can see that full-time developers contribute by far the most commits they contribute 356 000 commits a month what does that mean so that means that full-time developers are the biggest code contributors full-time developers contribute 76 of all open source commits in crypto this is also really fascinating right so what happens during a bull market during a bull market you can see the the orange section actually pushing into the blue section which means that part-time developers are contributing more of the share of the code in uh bull markets so again think about super well-attended hackathons that's kind of the phenomenon we're seeing um during those eras all right so what happens if we apply this frequency-based segmentation to developers in 2022 we can see that we can kind of translate what it means when we say developers Increase five percent over 2022. we can actually basically break this chart down into full-time part-time and one-time Developers and if we were to do that we can we can we can start to understand where that five percent came from so over the course of 2022 we grew full-time developers by eight percent and part-time developers by seven percent and what does it mean when we say you know developers reached an all-time high in June of 2022 and fell 11 can we understand who are the developers who left so if we apply that segmentation we can see that the developers who left were mostly one time in part-time developers full-time developers we also saw a decrease but not as dramatic all right so now let's go into some retention numbers when we say that a hundred thousand new developers came into the space across 2021 and 2022 why don't we have a hundred thousand developers working monthly well it's because a lot of them churn so this is one way to look at retention where um basically every every little box here is the weekly cohort and we can see retention over time this is full-time developer retention and the next thing we can see oh sorry these are monthly cohorts excuse me so this is full-time developer retention on the uh your left hand side and then total developer retention on um the right the right hand side and so what you can see here is a huge difference in retention full-time developers are much more retentive than um than other categories of Developers um how active were the developers who left 95 of all developers who churned were one time in part-time Developers uh and five percent of churn came from full-time developers so this is significant because full-time developers contribute close to 80 of the code so we don't want to see full-time developers leaving and in fact that is basically what we see is that once you're a full-time developer you tend to be very sticky and you tend to stay in the space all right ethereum ethereum is the biggest open source crypto community in crypto I'm just gonna check how I'm doing on time okay we're the biggest open source community community in crypto how is ethereum doing ethereum grew five percent um over 2022 if you look at full time one time and part-time similarly full-time saw the most growth and uh since all-time high June of 2022 ethereum saw 16 decrease in monthly active open source developers and if we were to try to understand what that 16 me uh what that yes what that 16 means we can see that most of the developer losses again comes from one time and part-time Developers um 14 691 new ethereum developers entered the space in 2022 which is an all-time high for ethereum and every single month there are about 800 new developers who are kind of minted into the ethereum ecosystem and if you were to compare new developers who come into uh crypto overall ethereum accounts for 16 of all new developers in crypto this means that any new developer like 16 of all new developers who contribute open source code to crypto uh contribute into the ethereum ecosystem all right evm evm has obviously emerged as a core technology and we're seeing a lot of evm compatible layer ones in layer twos how's that doing uh five percent also a five percent increase um over the course of 2022 such that there are 8 390 open source developers across all evm ecosystems um and if we were to kind of break out ethereum you can see that actually ethereum has more developers than all other evm layer ones and twos combined by quite a bit actually um okay across evm ecosystems um it's if we just look at the uh the the deployers we can see that most deployers overwhelmingly only deploy to one chain but um the average number of chains that a deployer has actually deployed on has increased over time and so what this chart is showing us is that although most people still only deploy to one chain in the evm ecosystem where undeniably seeing this trend toward multi-chain um and then how do we kind of account for developers working across multiple chains um this is basically you know if you are Sushi then you're not only building on optimism you're probably you're also building on ethereum and other chains and So within the optimism ecosystem you have what are considered primary developers so developers that are only in the optimism ecosystem and then you have multi-chain developers so this is just a categorization to help us understand the next few slides so let's compare multi-chain with primary Developers this is for polygons so polygon has much more multi-chain developers than they do primary developers but primary developers grew 29 over the course of 2022. this is Avalanche Avalanche actually lost primary developers over the course of 2022 but increased multi-chain developers and so this is this is really interesting for the evm ecosystem it means that you can have multiple strategies you don't need to just grow your primary developers you can also just choose to grow your your multi-chain developers as well this is BNB uh or BSC are they still known as BSC okay anyways binance smart chain um oh no they rebranded to BNB uh they got rid of the word binance in there so primary developers fell by 23 and multi-chain developers fell by two percent they now have more multi-chain developers than they do primary developers um this is cello cello lost 19 of primary developers but they grew their multi-chain developers by seven percent arbitrum uh arbitrum has four times more multi-chain developers than primary developers again that kind of speaks to what it means to be part of the evm ecosystem if you're arbitrum um it just means that you can support a lot of developers even if you don't have as many primary developers but that being said primary developers grew by 38 to a um 215 open source monthly active Developers similar thing for optimism optimism has five times more multi-chain developers and primary developers and primary developers grew 73 over the course of 2022. um okay two minutes okay perfect a lot of people ask me about or ask about how developers actually distributed across the globe where are developers based so this is some of the analysis that we started to put together I didn't put together this analysis this is someone on our team called Enrique please follow him on Twitter he's awesome and he often tweets out data around developers as well so let's look at um uh first kind of methodology how do I identify where developers are coming from so one of the things that we look at is self-reported locations self-reported location means that this open source developer has chosen to put their location either on their GitHub profiles or they put it on their Twitter profile and that Twitter profile is available through their GitHub profile um and so about one in ten open source developers we can identify some sort of self-reporting around around location and I think I'm just pausing here to say that because we can only see one out of 10 open source developer self-reported location this is a much smaller sample size and so that's a big caveat is that you know treat these as trend lines um and this is this is a fairly small sample size overall okay the United States is losing its lead it started with 42 percent of all open source developers working out of the United States and now that share has fallen to 29 in 2022. so how do other regions of the world compare outside the United States the biggest three regions in the world for Developers for open source crypto developers are North America Europe and Asia with LA am coming in at seven percent and I think that's probably not a huge surprise to most people we can break it down even further and this is really interesting India has roughly the same share of developers as ladam and Africa combined um and we can look at you know rather than just looking at statically how it's been doing we can also look at how that has changed and evolved over time as well so if we look at how kind of the acceleration of developers share across different regions of the world we can see that Africa Grew From almost zero percent of Open Source developers to five percent in six years so very very rapid growth although still small absolute numbers India's share saw the fastest growth from five percent in 2021 to 8 percent in 2022 India is uh basically right here and in the previous slide Africa is right here so it's a little bit small North American Europe lost two percent and one percent of death share respectfully respectively every year another way to visualize this data is to actually normalize it and basically what you can see here is India Africa and lat M gain crypto developer share and took share away from the EU considering including UK and the United States um okay all right that's it you can find this data and more at developerreport.

com um and if you scan the QR code I'll just pause this for a second and developerreport.com is basically a website where we publicly publish all of these developer numbers um you can see data up to December 2022 but we're working on a refresh of the data which will be coming in about a week or two and numbers will be regularly refreshed after that and the most important thing is if you are working in open source crypto if you have if you're working on an open source repository please please please please um submit a pull request to our GitHub this is the largest open source taxonomy of mapping open source repositories in the crypto space this is open to everyone everyone can go in and take a look every single open source repository that anyone has identified in crypto is mapped out in this um in this repo right here and if we're missing anything which we inevitably will be missing something please do submit a pull request or DM me on Twitter if you have any questions and um yeah thank you so much thanks for coming appreciate it [Applause]