Developer Report Deepdive Fresh Data on What Devs Are Doing, and Why It Matters | Maria Shen

[Music] all right hey everybody thanks so much for being here I'm Zach Seward great to see you um we're going to dive into some more great content I'm happy to introduce Maria Shen of Electric Capital she's going to debut some high level findings from the Electric Capital developer report which is a really great asset to people building in the space who want to understand what's going on so she's going to do a quick presentation followed by a panel discussion please give Maria Shen a warm welcome to the stage thank you so much hi everyone SCB here um awesome let's get started I'm going to run through some uh a bunch of data and charts very very quickly um this comes from the developer report every year Electric Capital puts together a developer report that accounts the number of open-source developers that are building in crypto um and the way we're actually able to do that is we aggregate over 900 million commits across over a million repositories to understand what open- source developers are doing a big caveat here is again this only looks at open- source developers so keep that in mind as you look at all the numbers that are going to come um which means uh coinbase developers are not included game developers are not included anyone who's building in Clos source is not going to be included in these numbers there cool so so let's get started Electric Capital is a VC firm um there's 23,63070 n we had one developer who was Satoshi 2015 July 2015 is when ethereum launched um we were at a little over at th000 monthly active open source developers and now we're at 23,000 and that's 39% growth annualized uh which is really really incredible to see there's a lot of differences since 2015 crypto developers are now distributed across the world and that was not always the case you can see here that North America and Europe used to dominate specifically North America had more than 40% of developers 43% of developers and now they have 24% % of open- source developer share Asia is now the number one continent for developers one in three open- Source developers in crypto are coming from Asia if we break that down into countries it's the US India UK China Canada with the most crypto developers the the country to to um experience the biggest decline is the United States the United States started off with 38% of the global developer share and is now 19% of developers um whereas India Grew From 1% to 12% if we look at the top ecosystems that developers are looking at uh by country um what's pretty fascinating is almost across the board in these top five countries ethereum is number one and salana is number two except for of course India where salana is number one and ethereum is number number two and base is number three in India's case and the number three slot does change depending on the country and most new developers are coming from Asia uh from India um if you do want to look at more of the country breakdown you can go to developer report.com to look at the numbers um but of course we'd be remiss to not go through the ethereum ecosystem as well ethereum has very strong uh Network effects 26% of all monthly AC developers in crypto work on ethereum Main net and the ethereum l2s so on a monthly capacity that's 6,244 open- Source developers established developers which is this deep purple line um has grown tremendously established developers are developers who have been in ethereum for over two years they have grown 21% in the course of 2021 or 2024 meaning that these uh you know there's there's clear retention they're developers who are clearly staying within the ethereum ecosystem um but there's been a huge growth of l2s 56 of percent of ethereum ecosystems developers Now work on ethereum l2s and this is up from 25% just in 2022 ethereum mainnet however still has the most developers in the ethereum ecosystem um base is number two arbitrum is number three um and there's a lot of other uh l2s after that so bases the biggest ethereum L2 with over 4,000 developers and each of these uh top l2s have over 2,000 developers oh we lost screen on a monthly basis that's 3592 developers working across ethereum l2s um in terms of new developers I find this pretty interesting as well new developers uh really expresses almost like mainstream interest in crypto and so new developer charts tend to follow price charts and so I think you know if you've been in the uh if you've been in space a long time I think the Peaks and valleys here look pretty familiar in terms of when new developers come in um but you know what's really what's really great is that new developers do do come in more during bull markets but that doesn't mean they don't come in during bare markets and over the course of 2024 or even 2023 you can see that though we were in a clear bare Market you still had over 3,000 new developers per month coming in and contributing to open- Source crypto and contributing to open source crypto is actually a pretty hard um hurdle to clear so it's it's quite a lot of friction this is really fascinating as well is if you look at the number of new developers salana became the number one ecosystem for new developers as of July 2024 which made them the number one ecosystem for new devs in 2024 a lot of these are coming from hackathons and we saw earlier that India uh has the highest number of new developers and India also has the highest number of developers working on salana and so a lot of this new developer growth on salana is driven by new develop ERS in India the next panel is going to go through uh product Market fit and use cases so we're going to fly through some of the adoption metrics across different use cases in crypto as well one is zero knowledge I think what's really really great about zero knowledge is finally where we're coming out of the research and these numbers indicate that there's more and more developers exploring this technology so uh at as of the end of 2024 we're looking at a little over 2,000 monthly otive developers working within the ZK space contract deployments also grew significantly um you can kind of see this clear up into the right chart uh but in absolute numbers it's still quite small so over the course of January to October 2024 there were 639 contracts deployed uh ZK contracts deployed which is up from 40 but you know again an absolute numberers still quite small but really emerging pointing to the fact that this is a really an emerging space for developers nfts a lot of things here really surprise people for example a lot of people think nfts were most popular in 2022 but actually nft deployments um reached an all-time high in 2024 and a lot of that is because the definition of what an nft is is has really dramatically expanded it's not just art if you dig into what the contracts are that are actually being deployed a lot of it is identity rewards loyalty and so now we're really seeing this like explosion of what nfts can be and as a result you can see that deployments have also hit all-time highs most of that deployment was happening um specifically on base as the biggest uh biggest place for new deployments of nfts nft minting activity um I don't have the chart here but also reached all-time highs and uh is is quite Global but you can see there are certain Peaks when people participate a little bit more than others specifically during Us hours and during Asia hours defi over 3,000 monthly active developers working across defi which is up from uh up in 26% annualized since defi summer in 2020 tvl um is uh we have really a tremendous amount of tvl now this is even an old slide and so the numbers are are not as high as they are now ethereum maintains its dominance and ethereum tbll is 7x bigger than that of the next biggest chain which is salana and it's been able to maintain dominance of its tvl since defi summer um but of course you can see that alternative chains with uh tvl is pushing into to the ethereum TBL as well uh dexus um saw a lot of usage in 2024 uh through the rise of meme coins as of October 2024 there was 209 billion um monthly Dex transaction volume which is really a staggering number most of that of course was happening on salana and ethereum and salana settled more um by Dex volume than ethereum did but if you add up ethereum on and all its l2s it settled almost a trillion dollars in Dex transaction volume over the course of 2024 I really like the slide because it shows that Dex um Dex activity is global at no time is there a dead period right where no one is swapping on dexes um but there are slight increases in Dex transactions which is uh in US hours um and uh then going into stable coin Co we have over uh this number is a little bit still now it's actually over 200 billion um stable coins in circulation um every day is minting a new all-time high for stable coins in circulation so stable coins is just growing and growing in Supply um most of those stable coins are living on ethereum uh the next biggest one is Tron and I will stop there but for anyone who's curious we do release a report with over 200 slides of different types of data and you can find that on developer report.com so thank you so much oh and coming up next is going to be a panel on product Market fit um we're going to have uh Andre from safe we are going to have Jason from a16z and Gemma from coin fund and myself as well [Music] hi everyone um I'm Jenna Pilgrim I'm the head of platform at coin fund uh thank you so much for joining us um this is forget the tech why Builders should focus on product Market fit uh but before we get started um I would be remiss if I didn't uh give Andre from safe the opportunity to address the uh safe buit hack uh so I'm going to toss it over to Andre to discuss that and then we'll get to our panel as soon as we can yeah thanks so much um I'm Andre VP growth at the safe ecosystem foundation and as you can imagine like when going on this panel I didn't think it was behind uh the circumstances um that we're facing especially another panel that's called forget the tech and and um as you also like to be honest I can think a lot of people um advise us not to be on panels here but we actually don't have uh we don't want to hide away and uh we truly believe in self- custody and peer-to-peer non custodial activities um having said that I'm sure a lot of you have been reading on Twitter here and there bits and pieces but um want to refer like to the best sources which are the report of the safe wallet team and also the report um by biit which are not contradictory at all but very complimentary and uh basically stating that leros uh state sponsored uh Hecker group um did a very sophisticated attack on bybit and compromised uh developer Machine by the safe wallet team and um through that uh through that um uh transaction a malicious transaction was proposed um but also external assessment has shown that the smart contracts itself um are rock solid there's no vulnerabilities in them and yes the safe wallet team will um keep on being very transparent about it and funds are safe funds are safe great thank you so let's get to our panel um so I'm blessed to be joined here from Andre from safe Jason from a16z and Maria from Electric who you just heard from uh so I'd like to start this panel really addressing the developer uh the developer report so you've just seen the growth of you know developers in this ecosystem I'm joined by two story VCS here um I'd be interested to know and this could be to to Jason or Maria how do you really separate the measurement of what product Market fit is if builds are looking to sort of capitalize on specific metric areas which which areas how do you separate what's a vanity metric and what is uh what is really an important metric and it could be could be either of you yeah um I think behind every metric there's a lot of nuances even when it comes to developer numbers um one of the reasons why we track things like full-time developers or established developers is because um you know a lot of developers come in through hackathons and they don't necessarily retain very well um but some of them do right and that's why we do have this long-term developer growth um and so for me personally when it comes to developers I really like to look at full-time developers or developers who are contributing 10 or more days in a 28 day period or established developers who are developers who have stayed in the space for over two years um cranking away which is really incredible and these two segments specifically contribute over 80% of the code commits crypto um I you know there's a lot of vanity metrics actually tvl I would say is a really complicated one as well it's it's uh it's very good it's very straightforward and I I certainly use it all the time but uh it also doesn't really capture the Nuance in a lot of you know like it it doesn't quite make sense that all D5 protocols adhere by tvl um because some some of it need it for liquidity but some of it are actually should be measured by volume or or Revenue um i' one thing I've been thinking a lot about as well is adoption metrics um I think there's a lot of conflation between wallets and users which I find very frustrating um and wallets are really tricky because um in our data we see that the overwhelming majority of Dex transactions are done by Wallets on both salana and base which are the biggest Dex participants are done by wallets that are only transacting one time less than $1 right and so when you have naive countings of wallet participation all these things can be very misleading but um but I think this is part of it the spaces of evolving and we're trying to figure out for ourselves what exactly are the right side of metrics it's hard to apply web 2 metrics to web 3 there's it's really not a direct translation and so um you know I I do see the industry in general pushing further further for for nuanced interesting thoughtful metrics and and certainly that's one thing we try to do as well definitely Jason when you're looking at new companies to to invest in what kind of metrics are you looking for yeah so we take a view from uh really the other side which is more of a a Bottoms Up perspective and and think of it more on a product by product and Company by company basis and and really want to look at uh you know is is the team is the company uh building something of high value to a core set of users to those same users users come back again and again do they get you know joy and delight and utility out of using the product and uh you know really what you want to see is starting with a small cohort of loyal customers and users and being able to double down on that behavior and grow that over time Andre do you believe crypto has product Market fit today yes or no like a general question General answer yes generally yes okay do you Jason I I think I'll uh disagree with the premise of the question and say so I think that I think that um you know looking at crypto is as a category is just too broad I think there are um you know parts of the industry that are uh working really really well so I think you know the infrastructure level with salana and ethereum and the l2s has become like a phenomenal substrate for developers to build on uh I think if you look at how the Dex ecosystem is looking in in um salon and ethereum like that's really thriving I think what we all want to see that we just haven't quite seen yet is um you know a breakout consumer oriented app or or business oriented app and I think we're very close but uh but we haven't seen that yet obviously from like at safe safe as an infrastructure provider there's a you know significant amount of um information from like that infrastructure providers need to get from uh different projects that they're working with is infrastructure uh product Market fit for crypto are we are we all here to help people launch more blockchains I think there's definitely an argument that product Market fit is very circular so like it Ser crypto serves itself but um I do believe that is also true product Market F like in crypto I think every single word of product Market F challenged like you don't know what the product is is that the protocol is that the token um what is the right Market is that just people who are early and like to try things out are these speculators are these people that are in it just for um uh getting yield um and I've been thinking about this also lately I think the general metrics that we had for product Market fit don't apply so for instance like people say you product Market fit you feel it users are coming and they want the product there they're waiting to get it that is completely broken in crypto due to incentives like the whole product funnel from acquisition and lately also retention is completely biased um but I do believe leave a second kind of metric which would be kind of like if half of your users would be sad if tomorrow you don't exist well I think that's the better metric because if you ask that to users they would say well I'll just go somewhere else uh a prge project that gives me incentives and I think the users of products that say yes I would be really sad about it and that can be a retail product that can be a Zora that can be an infrastructure product um I think it's kind of like more looking at this way and um Maria we were speaking backstage do you think that um speculation is a product is speculation a feature of crypto or is it something to be averted yeah I think speculation is definitely a product um but I would say it's one of the many products for crypto and many use cases um involve speculative elements but it's still a very clear use case I think dex's is a really really great example of that decentralized exchanges um of course is useful for swapping tokens uh during mem coin m you see just you know we were looking at over 200 billion in monthly Dex transaction volume right absolutely insane a lot of that is speculative a lot of that is from meme coins um but that doesn't mean that this fundamental utility of being able to swap tokens right being able to swap usdc for eth um like that that is fundamentally quite useful and so I think there's a mix of both in a lot of these use cases in crypto Jason what do you think needs to happen where we can say yes this is you know is what killer app or what company or category needs to really take off for us to be having this same conversation in a year and for there to be a to be a concrete answer yeah I mean I think it it's uh easy to say hard to do right which is that we just we uh as an industry uh need to continue to work to build better more compelling products uh and I think the the great thing is that a lot of great talented entrepreneurs are taking a lot of shots on goal uh I think that you know if you look at um if you look at the preponderance of crypto products today like the ux has gotten much much better transaction times have decreased uh transaction costs have have decreased by two orders of magnitude so like everything's moving in the right direction but I think like there's a there's a good analogy with AI right where um you know lots of people were talking about uh reinforcement learning and and uh machine intelligence for years and years and years and then it took chat GPT uh to you know put a user interface space on on top of something make it generally useful and now you've seen what that's catalyzed uh I think we're I think we're not far from that in crypto but it hasn't happened yet Andre what categories are you seeing from sort of your customers or your your users that you're excited about well I think we see mostly like stable coins adoption so um yes so I would say um we have a high number of stable coins that are on uh smart accounts and I think what is exciting about uh stable coins that it seems to kind of like align all the problems of the whole value chain so at the end um stable coins have a huge utility depending on where you are at like having a stable asset is a privilege um for a lot of countries um for countries that feel like their currency is stable at least um it gives them access to a completely new Financial systems that I see on the one side and on the other side um issues of stable coin there's a lot of value that is being left on the table that is being captured by others and now we see with a new generation of stable coins that this value is being democratized so that's I think why this is like this why this pulls off so quickly um everybody's really moving in the same direction there Maria I know you you invest a lot and and talk speak a lot about consumer crypto um what kind of consumer applications are you seeing in the investment landscape or what kind of companies are excited about there's a lot happening in the consumer space I'm pretty excited cuz you know as Jason mentioned the transaction fees are so low now and transactions are so fast I'm finally getting to the point where I'm using some of these apps and it it feels like a web 2 app it's it's super super exciting um you know it used to be that uh like you know I remember having to pay $200 plus in fees like sometimes and like it's you know that's like that's Unthinkable now um so I do think the infrastructure is ripe but what exactly is the first use case I've been thinking about that a lot there's a lot of different types of consumer um apps or mainstream type apps in in the crypto space today um I would say there's a category aimed at crypto natives that are maybe like descendants of um you know friendtech for example so um there's time.fun is an that launch and everyone's trying it out which seems really really cool you just uh your tokens represent the minutes um that's definitely aimed at crypto natives but it's a like kind of like a fun fun social use case um another one in that vein but but totally different is uh is ethos uh Network which is effectively like a review system for everyone in crypto and so there's a lot of scammers but then there's also a lot of very very reputable people in crypto um and so this is a system that lets you review people and gives you a credibility score and so at the extremes it's really the beginnings like the early endings of a credit system right which is which is really exciting and can get us to you know crazier things like uncollateralized lending and other cool things in the future um so there's there's that category of consumer apps which is still targeting crypto Natives and then I see a category of things that are really looking specifically not at CP natives um a lot of them involve for example um AI personalities uh and allowing um you know character AI esque type uh platforms and allowing these agents to be able to transact in uh in stable coins and and thinking around use cases like that um another one would be I've seen a lot of companies working at the intersection of live streams in crypto which is also are really interesting so enabling interesting betting markets in the middle of live streams um as well as allowing tipping in crypto and so it really runs the gamut I would say it's a very exciting time in consumer right now yeah it's interesting that you mentioned sort of ai ai agents and the applications of crypto and AI I know um Jason we have a couple portfolio companies in common in that category um how do you how do you see the AI crypto companies looking at product Market fit and how do they how do they decide you know what is what is just like yet another agentic AI company and what what is actually real and how do you how do you assess that category yeah I mean I think the the intersection that we're most excited about is that uh crypto has the opportunity to solve a lot of problems that uh that AI creates uh and so for example uh one of our portfolio companies Jensen just uh you know announced a little bit about what they're doing yesterday and uh with the Jensen protocol um you can take uh heterogenous set of gpus uh contribute that to a training Network you know it can be as simple as uh or as lowend as like oops MacBook M1 to uh to a more powerful Nidia gaming card uh and you can contribute that to contribute that to a training swarm uh and train larger and larger models and so like you know contributing directly to the um to the to the GPU shortage that we have so applications like that to us are super interesting other things like you know uh proof of humanity and proof of authenticity and AI are uh areas that I think are ripe for Innovation for sure for sure definitely um we've obviously seen many projects raise large amounts of money before they have product Market fit that obviously is a diversion from the traditional Venture model where you build something and then you raise the money and then you succeed and then you you raise the money again you raise the money again um how have we and this is to to marj how do we um how do we assess what is like does hype come before product Market fit or does it come after like how do we like is is a in today's crypto world is that war chest of $100 million round is that war chest necessary to be able to run the large scale experimentation required to figure out what's actually working here yeah I mean I think one of the unique properties of crypto is the opportunity to uh build a Community around what it is that you're doing uh and use tokens and uh a treasury to incent the right behavior um unfortunately that I I think that that lesson has been a little bit misunderstood to your point where um people have uh only focused on the incentive part in some cases and not ended up building great products and what we've seen is like that fails in 100% of of cases what what works is when you build uh a great product capabilities that your users love uh and then you can use uh Network effects and tokens as a way to uh Drive the community towards the most advantageous behavior for them and for the protocol and the network overall yeah definitely um Andre where do you sort of see your next wave of customers coming from if you're if the integrated partners are the real winners here if they're the ones making money now um where do you see your next wave of customers coming from so was so hard to tell because um it's such a general purpose technology that especially projects building on top of safe they have their own Target group and user groups so we see projects for instance like picnic that is based out of Brazil that identifies stable coins and bring stable coin issuance to uh their users we have um a pulley Market that is using uh safe and they are going for Bing and uh prediction markets um so I think it's very hard to tell um it's kind of for the builders on top to figure out how to take that technology and identify kind of their Market definitely um I think that's a great a great point to end on so I'll toss it to Jason to talk about the next round of crypto startup School great yeah so in in the spirit of product Market fit uh as some of you may know at a16z we have a program called CSX crypto startup accelerator uh it's 100% focused on helping talented Founders reduce the time to product Market fit uh 9we inperson program uh we invest in every company uh that comes through at a minimum of $500,000 uh our our next cohort starts in San Francisco at the beginning of April uh and we had closed applications for that but uh is a special uh treat for eth Denver uh attendees we're reopening applications for the uh duration of the conference so if you want to go to uh we should have a QR code up here momentarily but uh in uh while we wait for that you can go to apply. a6z crypto.

com uh and get access to the application uh if you're starting something new if you're building something uh we'd love to see what you're doing and uh and talk to you awesome thanks everyone we'll speak to you soon and La coat on fire sticky note constellation stuck to the sailing wire gas are confet [Music]