Developers Stay Resilient Through Harsh Crypto Winter, Report Says

Where is Web3 headed? Take a look to the future with this pioneering investor in the metaverse and NFTs.

Data from Web3 developer backend Alchemy shows that despite the latest chapter of crypto winter that has unfolded over the past few months, developers are resilient in their efforts to deploy decentralized applications (dapps).

According to the firm’s Q1 2023 Developer Report, developers installed 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 – an all-time high for installing wallet infrastructure.

Although non-fungible tokens (NFTs) trading volume has decreased 82% year-over-year, it has increased 126% since the last quarter of 2022. As for decentralized finance (DeFi), trading volume on decentralized exchanges (DEX) is down 38% since Q1 2022, but it is on the rise in the new year, and 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.”

While the last quarter may bring promise to the crypto space, it certainly 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.

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,” said Shah.

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