Telstra Ventures, a data-focused venture capital firm, has released a new research report showing that Web3-developer interest has remained strong despite the crypto bear market driven by the implosion of the terraUSD (UST) stablecoin, the bankruptcy filing of crypto-lender Celsius and the liquidation of hedge fund Three Arrows Capital. The report states:
The crypto contagion — fueled by the collapse of Terraform Lab’s UST stablecoin, Celsius Network (CEL) pausing withdraws and Three Arrows Capital defaulting on its loans — has been especially rough on digital currency holders and crypto startups looking for funding.
Since January, a 60% loss in crypto market cap wiped $1.3T, and VC investments tumbled 25.6% to about $9.3bn, down from a record $12.5bn invested during last year’s first half, according to Crunchbase News. Unflustered by prices and investments declining across the board, Telstra Ventures conducted health checks on 3 blockchain ecosystems – Ethereum, Solana and Bitcoin – by applying data science tools to open source developer communities.
What were the insights of Telestra Ventures’ study?
Led by Donghai He, PhD, Telstra Ventures’ data science team analyzed 1,000 active organizations contributing to more than 30,000 open source Web3 projects, revealing:
- Telestra Ventures’ research found that blockchain developers’ participation in Web3 communities remains robust, as measured by compound annual growth rates in the number of unique active contributors per project and per ecosystem each month.
- Telestra Ventures’ research found that venture and corporate investors are well aligned with 7 of the top 10 most active projects across key ecosystems.
- Only 4 to 5 of the top 10 most active projects in each ecosystem are backed by venture and corporate investors, suggesting unfunded opportunities remain.
According to General Partner Yash Patel, blockchain developers’ commitment to Web3 ecosystems forms the basis for the sector’s medium- and long-term viability, despite short-term price fluctuations. He contends blockchain developers’ decisions about which protocols to use will be driven by use case and will point to the winning protocols in the long run.
Ethereum remains the largest and strongest developer community
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- Telestra Ventures’ research found that Ethereum’s contributor community has grown at a 24.9% compound annual growth rate over the past 4 years since Jan 1, 2018.
- Telestra Ventures’ research found that since Ethereum’s peak of price in Nov-2021, the number of monthly active contributors has a drawdown of 9.0%.
Solana is growing rapidly and is on the heels of Ethereum
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- Telestra Ventures’ research found that Solana’s contributors have grown at a 173.0% compound annual growth rate over the past 4 years since January 1, 2018.
- Telestra Ventures’ research found that since Solana’s peak price of $204.35 in Nov 2021, the number of active contributors has a drawdown of 21.0%.
Bitcoin continues slow and steady growth through price volatility
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- Telestra Ventures’ study found that Bitcoin has seen a 17.1% compound annual growth rate in the number of contributors during the past 4 years since January 1, 2018.
- Telestra Ventures’ research found that since the peak of price of crypto Bitcoin in October 2021, the number of active contributors has grown 8.2%.
Institutional investors heavily involved
Institutional investors are aligned with robust blockchain development in each of the three primary ecosystems, and investment opportunities remain.
- 7 of the 10 fastest growing projects are backed by VCs or by corporations.
- 4 or more of the 10 fastest-growing repositories in each ecosystem are backed by VCs.
Ethereum is the strongest & largest community
- Ethereum’s upcoming merge will transition from proof of work to proof of stake, which implies the network will be able to process over 100,000 transactions per second, which is much faster and more scalable. Developers’ excitement is helping fuel the recent price rally, and we expect more innovations to come as different chains try to outdo each other.
- Telestra Ventures’ research found that Ethereum’s contributor community has grown at a 24.9% compound annual growth rate over the past 4 years since Jan 1, 2018.
- Since Ethereum’s peak of price of over $4,800 in Nov-2021, the number of monthly active contributors has a drawdown of 9.0%. This compares to an x% drop in price.
Solana developer community is growing rapidly
- Telestra Ventures’ research also found that the Solana developer community began taking shape in late 2017, and the first block was created in 2020.
Solana is growing 173.0% compound annual growth rate of contributors during the volatility of the past 4 years since Jan 1, 2018. Since Solana’s peak price of over $200 in Nov 2021, the number of active contributors has a small dip and drawdown of 21.0%.
Steady growth for Bitcoin’s developer community
- Telestra Ventures’ research found that Bitcoin has seen a steady growth in the number of active developers over the past eight years. Bitcoin’s contributor community has seen a 17.1% compound annual growth rate during the past four years since January 1, 2018.
- Telestra Ventures’ research found that since the peak of price of cryptocurrency Bitcoin in October 2021, the number of active contributors has grown 8.2%.
