Ethereum still has the largest developer ecosystem on the Web3, according to Electric Capital. But other networks are gaining traction
There’s nothing like a market boom to bring people on board. After a 2021 record for cryptocurrency prices, more developers than ever joined Web3 projects in the past year.
And according to a new report from early-stage cryptocurrency investment firm Electric Capital, several protocol ecosystems are outpacing the largest developer ecosystem out there, Ethereum. “Polkadot, Solana, NEAR, Binance Smart Chain, Avalanche and Terra have faster initial ecosystem growth than Ethereum,” states the report.
The metrics it uses to reach that conclusion are the duration of days since the first “commit,” or code change, and the total number of developers since release. When measured against Ethereum at a similar stage, these six tier 1 ecosystems have more active developers.
Solana, Avalanche, BSC and Terra emerged last year as new hubs for decentralized financial activities (DeFi), with their networks accommodating applications for peer-to-peer loans, exchanges and other transactions. Their token prices rose on the charts accordingly. NEAR is also integrating DeFi elements, making its native currency hit a record this week. And after several years of work, Polkadot launched “parachains” in late December, essentially bringing smaller Blockchains into their network.
Electric Capital’s extensive report includes several elements that put the ecosystem’s growth into perspective, so no one claims it misrepresents the overall value of Ethereum while swelling rivals.
First, it admits that “not all commits are created equal” in terms of time spent and limits its scope to open source repositories, which has the effect of underestimating the total number of developers.
Second, the report breaks down developer data in a number of ways, including analysis of full-time, part-time, and single-time community and protocol developers. (Protocol developers work on the main Blockchain, while community developers work on the tools and applications of that Blockchain.) Looking only at full-time developers (those with at least 10 commits per month), Solana, Polkadot, BSC, and NEAR still rank ahead of Ethereum at comparable stages; Avalanche and not Earth.
Third, Electric Capital also looks at retention levels between protocols and what causes developers to stick. (Hint: Those entering the peak of the market probably won’t stay.) He finds that Ethereum attracts the most new Web3 developers, averaging between 20 and 25% of the total each month. That equates to more than 700 new developers to Ethereum per month, a historic record. Additionally, 30% of developers who started full-time on Ethereum projects in 2017 were still in existence in 2021. Across the entire Web3 space, three-year retention was 30% – Ethereum has lower attrition rates.
Finally, there is a tacit acknowledgment that Bitcoin and Ethereum existed in very different market environments than newer competitors such as Solana and Terra. Bull’s races attract developers, according to Electric Capital’s findings, not the other way around. The success of Bitcoin and Ethereum during previous bull cycles helped to prepare the largest cryptographic ecosystem we see today. Also, Blockchains like Avalanche and BSC are clones of Ethereum, which helped them to attract developers familiar with the latter.
In terms of where things are today, regardless of the Blockchain’s age, Ethereum still has the largest developer ecosystem, although Bitcoin has fallen to fifth place, behind Polkadot, Cosmos and Solana.