Electric Capital Developer Report Recap: Where are the crypto developers going and why it's important to track | Crypto Market Update 1.10
Electric Capital Developer report recap | Market Update | NEWBIES: The Origins of Bitcoin: The Cypherpunks Movement pt.1
Disclaimer: I am not a financial advisor, everything on this report is financial opinion. Please consult your financial advisor before participating in crypto.
A quick update of the market before getting into the Electric Capital report.
The markets will likely continue their current behavior until there is a reason to alter the macro environment. Wednesday will see the release of the Core Inflation Report that could see an alteration of its course. I have recently discovered the measuring metrics of inflation were “updated” before the upcoming report. It will be no surprise if inflation is miraculously down. It’s pure speculation, but it would be a valid excuse for a slow down of tapering and interest rate hike talks. Neither the FED nor government officials want to see a struggling stock market that would likely precede aggressive monetary policy.
Beforehand, I must apologize for the poor quality of the graph charts, they came directly from the report in that state.
Electric Capital Developer Report Recap
Electric Capital is an early-stage venture firm focused on cryptocurrencies, blockchain, fintech, and marketplaces.
Once a year, they release a developer report that gathers developer activity across crypto.
Developers are the builders of platforms and ecosystems and are extremely important to track. The report aids in spotting the mitigation of a limited developer base.
A simple flowchart will give you an idea of where developers stand concerning market cap. Increasing Market cap is typically a late-stage indicator of a successful venture.
On to the report.
Total Crypto Developers
Developers in crypto are at an all-time high of 18,416 monthly active developers. Bitcoin has increased monthly developers by 9%, and Ethereum increased by 42%. The positive number is auspicious for crypto in general. In addition, the report states that Amazon employs 36k active developers, and Golden Sachs (US bank) employs 9k to aid us in comparing developer count to competing industries.
Total Developers by ecosystem
Key takeaways from this chart:
Polkadot is a solid 2nd but well behind Ethereum
Solana Grew the fastest out of the top ecosystems in 2021 but is still significantly behind Ethereum, Polkadot, and Cosmos.
Zooming in:
Notable Takeaways:
Near protocol has 3x’d developers
Polygon, Binance, Kusama, Cardano have nearly 2x’d developers
Zooming in further:
Notables Takeaways from “Total Developers from Ecosystems between 51–300”
4xers: ICP, Terra, Fantom, Harmony
3xers: Algorand, Avalanche
2xers: Chainlink
The list on the left confirms that increased developer action similarly had decisive price action 2021. Harmony is an interesting standout with a market cap comparatively lower than its counterparts on the chart.
The “growth’ of Full-Time monthly developers” has a few interesting names in Kusama and Moonriver. Kusama, The sister chain of Polkadot, saw a lot of growth alongside a four-month-old Moonriver ecosystem.
Ecosystem Growth Comparison
Polkadot is growing faster than Ethereum, and Polkadot Parachains has recently gone live. Polkadot is well funded and led by Ethereum co-founder Gavin Wood. Solana is no surprise and saw tremendous backing from Billionaire and FTX founder Sam Bank-Fried. Cosmos continues its steady climb into 2022, where its interoperable abilities will suit the recent narratives of a cross-chain environment.
Zooming in
Growth comparison of ecosystems with 250+ developers.
Notable takeaways
Near is growing at a high-speed rate in the past two years
Binance is likely falling due to the China Ban and the competitive emergence of Solana, Avalanche, Fantom, and others.
Avalanche, Terra, Algorand, Polygon are growing rapidly
Cardano, Tezos, Celo, Stacks are showing weakness as of recent
Fantom is steadily increasing but not at a tremendous pace
On a side note, it takes about two years to develop a community that can attract 100+ developers. Binance, Terra, and Avalanche are exceptions.
Ethereum vs. EVM compatible ecosystems (growth)
Ethereum is king, and it utilizes EVM. There has been an emergence of EVM compatible chains to attract Ethereum Developers 2021. EVM compatible chains have grown four times faster than Ethereum in talent this year. (+42% vs +120%).
Defi Developer Growth
Osmosis, Mango, OlympusDAO, and Trader Joe did not exist last year, and they have more than 30 developers. On the other hand, Uniswap, Maker, and Balancer remain as DeFi flagships. Not on the chart, Acala has 26 developers and has 2x’d developers in 2021 and is going live in a few days.
Some opinions formulated from the report
Ethereum is still king. It is unlikely any ecosystem will catch its developer count any time soon.
Polkadot has a lot of activity, and Parachains just went live last month. DOT will likely continue growing rapidly
Cosmos remains a strong investment according to Dev metrics
Harmony One is a big surprise in relation to growth and one of the smallest ecosystems as far as Market cap ($3.3 Billion).
Kusama’s ($2.2 billion) and Moonriver’s ($441 million) success could be an early indicator of Polkadot’s future. Kusama is the sister chain and testnet of Polkadot.
Keep a close eye on Moonriver with a $441 million market cap and its cult-like following.
Near protocol has attracted a lot of developer growth and less attention than competing chains. Suppose the ecosystem for users begins to take traction; could it be the next Solana or Avalanche as far as Market cap is concerned?
EVM compatibly is an essential factor when investing in an ecosystem
Mango (MANGO) is a big surprise to see in the 4xers of DeFi.($193 Million Market cap). It leads me to believe that there is a significant investment going to the development of Mango. Mango is a Solana-based DEX that is constructed similar to a CEX. DYDX is a similar project. DYDX had a tremendous year following the integration of user incentives (large airdrop).
Closing Remarks
There were a notable amount of surprises in this year’s developer report. Ethereum was not one of them. Ethereum continues to dominate in every aspect of developer count and growth. However, it loses ground to EVM compatible chains at a 4:1 rate. Harmony, Fantom, and Moonriver are notable growers that are EVM compatible.
All signs point towards Polkadot becoming a force once all the parachains begin going live.
Ecosystems with higher market cap than DOT but notably less developer activity:
Cardano
Binance
XRP
Near protocol is a state-of-the-art blockchain that has yet to attract as much attention or TVL as Solana or Avalanche. NEAR has been having many updates and has many more in the works. NEAR is an excellent protocol to keep an eye on in 2022.
The Electric capital report is one of my favorite reports because it helps highlight metrics we rarely get to explore. Live metrics would be excellent but are not available. Nevertheless, the report provided valuable insight that can help compose decisions in 2022. The report is public and free to read. Remember to share any helpful information you discover!
All we need is for the market to start behaving now.
I will likely refer to this report as the year goes on.
Crypto Market Update
Bitcoin (BTC) has settled in the 40–42k support after an up and down weekend that saw BTC hit a low 60 day low of 39.7k. However, don’t expect a whole lot of action until Wednesday, when the Core Inflation Rate Report is released.
Bitcoin Dominance (BTC.D) has been rising for a week after 76 days of downwards action. The market is moving into Bitcoin likely in anticipation of Wednesday’s report and the overall market sentiment insight regarding bond tapering and rate hikes by the FED.
Volatility S&P 500 Index (VIX) has spiked today, hitting a high of 23.33, showing fear in the stock market that is transferring into digital assets. Chart below.
Most Smart Contract Platforms are struggling, Cosmos and Near are exceptions:
ATOM 37.22 +2.1%
NEAR 14.88 +7.2%
ETH 3039 -4.8%
SOL 134 -7.9%
ADA 1.12 -6.7%
DOT 23.37 -7.0%
LUNA 69.85 -4.8%
AVAX 83.30 -8.0%
Bitcoin Fear and Greed Index: 23 Extreme Fear
“Bitcoin” Google Trends: 33 (+3)
Bitcoin Options Max Pain (Jan 20): 43K
How to use The Fear and Greed Index for investing
Major Crypto News
“I think the average investor should ask themselves what do you have in your portfolio that has that kind of track record — number one; is very, very underpenetrated; can provide a service of insurance against financial catastrophe that no one else can provide; and can go up ten times or fifty times. The answer is: nothing.” -Bill Miller
NEWBIES lesson of the day
Origins of Bitcoin: The Cypherpunks pt.1
Bitcoin’s ideas have been around since the Cypherpunks movement in the late 1980s. The cypherpunks imagined creating a cryptographic currency that could not be altered or traced. The Cypherpunk community advocated using technology as a route to social and political change and improvement.
Modern cryptography was practiced only by the military and spy agencies until about the 1970s when the US government published the Data Encryption Standard (DES). IBM developed DES as a method to encrypt unclassified sensitive digital data through the use of algorithms. The DES standard was widely adopted despite its flaws and evolved until it was ultimately entirely superseded in 2005 by Advanced Encryption Standard (AES). Despite its flaws, the public availability and distribution of DES was a catalyst for the cypherpunk movement.
Inspired by DES, A cryptographer named David Chaum was credited with becoming the father of the cypherpunk movement with the publication of “Security with Identification: Transaction System to Make Big Brother Obsolete” (1985). David Chaum’s publication described ideas eventually merged into a movement in the late 80s.
In 1992 the Cypherpunks came to fruition when Eric Hughs, Timothy May, and John Gilmore founded a small group that met monthly at Gilmore’s San Fransico company Cygnus Solutions. The group began a mailing list and by 1994 included 700 subscribers that grew to 2000 by 1997. The forum had technical discussions covering mathematics, cryptography, computer science, politics, and philosophy.
Tomorrow will explore the next phase of the Cypherpunk movement.
References:
Cypherpunk - Wikipedia
A cypherpunk is any individual advocating widespread use of strong cryptography and privacy-enhancing technologies as a…en.wikipedia.org
It was a long report today with a treasure trove of information. I hope you enjoyed it!
Thanks for reading fam!
Gabi
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