Despite the positive price movement in recent weeks, the software development aspect of the crypto industry is trending in the opposite direction.
According to a report by venture firm Electric Capital, the number of active developers working on open-source crypto projects has declined by 22 percent over the past year.
In June, there were 21,300 active developers, compared to 27,200 the previous year. This decline may be attributed to developers finding more enticing opportunities in other booming tech sectors like AI, as suggested by self-described DeFi addict and crypto analyst Miles Deutscher on Twitter.
The report highlights that most of the developers leaving the crypto space are newcomers with limited experience.
Since June of the previous year, 7,730 newcomers have departed from the digital asset space. However, newcomers account for less than 20 percent of all code commits.
In contrast, the majority of commits come from experienced open-source developers who have been working with crypto for more than a year. This group has seen a 16 percent increase in numbers, growing from 11,300 to 13,100 over the past year.
The decline in the number of developers exploring crypto projects for the first time is also notable.
In May of the previous year, 5,900 developers entered the space, while this past May saw only 2,900 new entrants. This decline in interest could be attributed to factors such as fatigue and reduced venture capital investment. US regulatory uncertainty is also causing upheaval as related businesses move their operations to more welcoming countries, like the UK.
Despite the decline in newcomers and the shifting preferences of investors, the report suggests that the exodus of fresh talent from the crypto industry is not necessarily a cause for concern.
Historically, newcomers have dominated the digital assets space after previous market peaks—only for the momentum to shift back to experienced developers. Therefore, it remains to be seen whether this shift is a temporary phenomenon or a longer-term trend.
(Photo by ANIRUDH on Unsplash)
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