Telstra’s VC arm, Telstra Ventures, has taken a deep dive into web3 and blockchain world amid the crypto crash that’s wiped $1.3 trillion in value from investors, with the market down 60% since January, to see who’s survived and thrived.
The 12-page report, titled Blockchain Open-Source Developers Signal Strength of Web3 Community, shows that web3-developer interest has remained strong despite the crypto bear market that’s seen the terraUSD (UST) stablecoin implode, crypto-lender Celsius file for bankruptcy and put hedge fund Three Arrows Capital in liquidation after defaulting on its loans.
In that climate, VC investment in the space has also fallen by a quarter (25.6%) to $9.3 billion in the first six months of 2022, compared to a record $12.5 billion in the same period last year.
The Telstra Ventures data science team, led by Dr Donghai He, conducted health checks on three top blockchain ecosystems — Ethereum, Solana and Bitcoin – analysising 1,000 active organisations contributing to more than 30,000 open source Web3 projects.
Their key findings are 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.
- 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.
Telstra Ventures General Partner Yash Patel said the commitment to Web3 ecosystems by blockchain developers forms the basis for the sector’s medium- and long-term viability, despite short-term price fluctuations, adding that decisions about which protocols to use will be driven by use case.
To be considered in the study, projects have a minimum 100 stars in related GitHub repositories and had active contributions between January and April 2022.
The highlights of the Telstra Ventures blockchain report are:
Ethereum remains the largest and strongest developer community
- 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 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
- Solana’s contributors have grown at a 173.0% compound annual growth rate over the past 4 years since January 1, 2018.
- Since Solana’s peak price of $204.35 in Nov 2021, the number of active contributors has a drawdown of 21%.
Bitcoin continues slow and steady growth through price volatility.
- Bitcoin has seen a 17.1% compound annual growth rate in the number of contributors during the past 4 years since January 1, 2018.
- Since the peak of price of crypto Bitcoin in October 2021, the number of active contributors has grown 8.2%.
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 or corporate investors.
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 than currently. Developers’ excitement is helping fuel the recent price rally, and we expect more innovations to come as different chains try to outdo each other.
- 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 more than $4,800 in Nov-2021, the number of monthly active contributors has a drawdown of 9%. This compares to an x% drop in price during the same
Solana developer community is growing rapidly
- 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%.
Steady growth for Bitcoin’s developer community
- 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.
- Since the peak of price of crypto Bitcoin in October 2021, the number of active contributors has grown 8.2%.
You can download the report here.
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