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Bear markets bring challenging times and massive losses for investors. However, there’s more. The brain of crypto has significantly contracted over the last year. How does this happen? The not-so-obvious damages of bear markets are revealed in the latest report.
The Brain of Cryptocurrencies
Cryptocurrencies have different implications for different investor groups. Some view them as casino chips, while others classify them in the same category as stocks. Those with a more professional perspective believe that this structure is a new crowd funding model. The third option seems more logical because:
- You research the team of the project you will invest in
- You consider its future potential
- You take into account the probability of success
- Lastly, you invest by considering the token economy.
However, those who are interested in cryptocurrencies only for quick profit and speculative movements do not care about the above 4 points.
Crypto projects produce new ones based on blockchain. For instance, while Mina aims to be the network with the least system requirements with its Node’s that can work in the browser, Solana strives to be the fastest layer1. Of course, the developers who build these technologies are the “brain of crypto”.
The Brain of Cryptocurrencies is Shrinking
Bear markets also pull developers away from cryptocurrencies and the technology in this field. As of today (June 1, 2023), the number of developers has decreased by 22% compared to last year. The developers who recently left crypto were the newcomers, who worked in crypto for less than 12 months and were responsible for less than 20% of all code commitments. In contrast, developers who have been working in crypto for 12 months or longer continue to contribute to more than 80% of the commitments.
As of June 1, 2023, there are 21.3 thousand active open source developers. Today, there are more monthly active developers compared to before the crypto markets reached their all-time high in November 2021. The number of developers in the crypto area increased by 92% and 25% respectively in 2020 and 2021 (from June onwards). However, it decreased by 22% compared to June of last year.
The decrease in the number of active developers in bear markets is considered natural, but the escape was much faster during the bear season.
