According to recent data, a prolonged market downturn has resulted in a more than 26% decline in the number of weekly active developers in the past three months.
According to Blockchain data aggregator Artemis, the top four smart contract platforms witnessed an even greater decline in developer activity. These include Ethereum [ETH]Dot [DOT]Solana [SOL]and Cosmos [ATOM]. These networks witnessed a 30.5% decline [ETH]43.6% [DOT]48.4% [SOL]and 48.9% [ATOM]respectively.
The current state of the market?
Building smart contracts that power decentralized applications, maintaining and updating infrastructure, and developing blockchain architecture are responsibilities of blockchain developers. One of the key indicators of the success of a smart contract platform is the activity of the blockchain developers. A platform with few developers would probably find it difficult to expand.
However, on September 8, Tascha Che, a cryptocurrency researcher and the founder of Tascha Labs, tweeted that she thought the trend wasn’t so worrisome. She also stated that the decline was attributed to the departure of “tourist investors” and “tourist builders”. In addition, it would give real builders “rest to get real work done”.
Active developers in all crypto protocols are down 30% this year.
Tourist builders are leaving together with tourist investors.
Finally, the industry has some peace of mind to get real work done.
— Tascha (@TaschaLabs) September 8, 2022
A second Twitter usera Binance research analyst claimed that developer activity will be an “essential indicator” to consider in the future due to the “flywheel effect” it has on the industry.
Interplanetary File System (IPFS), a decentralized data storage technology, and the Internet Computer blockchain network were two of the few leading smart contract platforms. These platforms grew by 206.6% and 21.7% respectively.
The impact on trading volumes
According to a study by cryptocurrency asset manager CoinShares, institutional investor trading activity for crypto funds fell to $1 billion last month. This was the second lowest amount of the year.
There has been no trading for a while. In addition, volumes have remained at or just above $1 billion for the past three weeks. According to CoinShares, last week’s drop to $1 billion made it the second worst trading week so far this year. That’s a 55% drop from the year’s average trading volume.
Additional research from Glassnode suggests that retail interest is also declining. Even if Bitcoin [BTC]According to Glassnode, the price rose slightly last week, while trading volume for trades costing $1,000 or less has consistently declined. In addition, Glassnode blamed this on retailers.