Web3 developers have demonstrated their resilience in the face of the latest chapter of the crypto winter, according to data from Web3 developer backend Alchemy. The firm’s Q1 2023 Developer Report revealed that developers deployed an average of 1.9 million Ethereum SDKs per week, a 47% increase year-over-year. Additionally, 788% more wallet SDKs were deployed since Q1 of 2022, marking an all-time high for installing wallet infrastructure. Despite an 82% decrease in non-fungible tokens (NFTs) trading volume year-over-year, there has been a 126% increase since the last quarter of 2022. Trading volume on decentralized exchanges (DEX) is down 38% since Q1 2022, but it has seen a 43% increase since Dec. 2022.
It’s not just Ethereum that’s seen new highs of developer activity. Developers across sidechain Polygon and layer-2 networks Arbitrum and Optimism deployed 160% more smart contracts year-over-year, fueled in part by a desire to build on Ethereum scaling protocol zkSync 2.0, which went live in February, and Polygon’s zero knowledge Ethereum Virtual Machine (zkEVM), which released to the public at the end of March. Jason Shah, head of growth at Alchemy, told CoinDesk that although crypto winter has been long and trying for many Web3 developers, there’s still an incentive to stick around for when the market finally returns to its previous levels. “It’s certainly not easy to survive a crypto bear market, and the longer it goes, the more challenging it can be,” said Shah. “But what we’re noticing is most of the builders who are in the space are here for the technology, and so many people certainly look forward to a return in more top-line metrics like prices, and a lot of new projects being launched and new funding entering the space.”
Despite the promise that the last quarter brings to the crypto space, it has been challenging for many companies to not only hold their funds but confidently operate as expected. The recent collapses of Signature Bank, Silvergate Bank, and Silicon Valley Bank, alongside concerns over the U.S. regulatory crackdown on cryptocurrency, haven’t been promising for the future of Web3. However, Shah noted that while events have shaken up public sentiments around the space, developers have remained nothing but “resilient” towards building blockchain-based products and services. “It hasn’t been the most ‘gangbusters’ quarter ever in terms of crypto growth, but we’re seeing this strong resilience under the surface of the broader narrative,” said Shah. “During the more euphoric periods in the market, there’s kind of frenetic urgency and unbridled optimism.”
The report highlights the ongoing efforts of developers to deploy decentralized applications (dapps) despite the challenges posed by the crypto winter. The increased deployment of smart contracts on sidechains and layer-2 networks reflects a desire to build on Ethereum scaling protocols, which are seen as critical for the ongoing success of the Ethereum ecosystem. While trading volumes for NFTs and DeFi have decreased year-over-year, they have seen significant increases since the last quarter of 2022. This suggests that there is still significant interest in these areas of the crypto space, and that developers are working to create new products and services that will drive adoption and growth. As the crypto market continues to evolve, it will be interesting to see how Web3 developers adapt and innovate to meet the changing needs of users and investors.