First Mover Asia: Active Crypto Developers Decreased Nearly 60% in 2022

Good morning. Here’s what’s happening:

Prices: Bitcoin and the CoinDesk Market Index turned lower, as traders started to rethink the takeaway from this week's Federal Reserve meeting.

Insights: Ethereum had 192 active developers on Dec. 14, the highest number of developers among blockchain projects, data from Token Terminal suggests.

Prices

Crypto sentiment makes quick reversal

By Bradley Keoun

If Wednesday's Federal Reserve meeting brought a buoyant mood to crypto markets, Thursday's action brought a reality check.

Bitcoin (BTC), the largest cryptocurrency was down 2.6% over the past 24 hours, to about $17,400 – tracking a similar trajectory in U.S. stocks.

Ether (ETH), the native cryptocurrency of the Ethereum blockchain and the second-biggest overall, lost 3.6%, to $1,262. The CoinDesk Market Index (CMI) slid 2.4%. Optimism's OP token ranked among the biggest losers with a 10% decline.

The take of CoinDesk markets analyst Glenn Williams Jr. was that the Federal Reserve, while slowing the pace of interest-rate increases, still has a long way to go before it can end its campaign to wring out inflation. Before price rises can moderate, the Fed will have to see a pretty significant increase in unemployment – to keep expectations of higher wages from becoming entrenched. Hopes of a quick reversal by the Fed Chair Jerome Powell and his colleagues might be premature. Funding rates – a key barometer of sentiment in crypto derivatives markets – are still pointing negative.

Insights

By Sage D. Young

The number of daily active developers working on top blockchains and decentralized applications (dapps) has decreased roughly 57% this year, according to financial data platform Token Terminal.

In January, about 3,700 daily developers were active, compared to almost 1,600 on Dec. 14, data from Token Terminal suggests, which tracks daily totals.

The decline has come as ether, the token of the Ethereum blockchains, and other cryptocurrencies have plummeted from record highs little more than a year ago. ETH was recently trading at about $1,300, down 64% from the start of the year when the second largest crypto by market capitalization was still hovering near $4,000. The number of projects built on the Ethereum platform over this period has plummeted as some projects have failed and increasingly risk averse investors have deployed their money at a slower rate than during 2021’s bull market.

“It’s not surprising to see an overall decline in daily active devs,” said Chris Eberle, angel investor and contributor at Coordinape and PleasrDAO who goes by DeFi Ginger on Twitter. “2022 has been punch after punch for crypto. The impact to the market and the overall brand of crypto is just brutal.”

Eberle noted that this year’s crypto debacles, including the recent collapse of crypto exchange giant FTX and failing of centralized lender Celsius, have created “one, big ball of pain” for the industry that has also contributed to the decline in active developers.

With 192 developers as of Dec. 14, Ethereum currently has the most daily developers among blockchain protocols and dapps. Cardano and Cosmos rank second and third with 144 and 143 active developers, respectively. Bitcoin, the largest cryptocurrency by market capitalization, currently has 18 active developers.

According to Token Terminal, Solana saw the largest reduction from roughly 2,500 devs in January to 75 developers at the time of publication, although the protocol insisted in a tweet last month that thousands of developers are working on the platform. “Something doesn’t add up, Eberle said. "Solana fell off a cliff before [the FTX collapse].”

He added: ”Others seem to have some dip but it could well be seasonal as we’re in the holiday zone now.”

Token Terminal’s methodology to determine an “active developer” is based on the “number of distinct GitHub users that made 1+ commits to the project’s GitHub repositories during the past 30 days.”

Overall, the number of the active developers in the crypto space has stabilized between 1,500 and 1,600 since mid summer, suggesting that a core of the determined, adequately funded people remain convinced of blockchain technology’s potential.

Important events.

4:30 p.m. HKT/SGT(8:30 UTC) Germany S&P Global/BME Composite PMI (Dec)

5:00 p.m. HKT/SGT(9:00 UTC) Eurozone S&P Global Composite PMI (Dec)

5:30 p.m. HKT/SGT(9:30 UTC) Great Britain S&P Global/CIPS Services PMI (Dec)

CoinDesk TV

In case you missed it, here is the most recent episode of "First Mover" on CoinDesk TV:

Top FTX Group Exec Tipped Off Authorities Prior to Bankruptcy Filing; Charges Pile Up Against Sam Bankman-Fried

As he sits in jail in the Bahamas, FTX founder Sam Bankman-Fried finds himself facing a litany of both criminal and civil charges. Renato Mariotti of Bryan Cave Leighton Paisner, a former federal prosecutor, explained the charges as "First Mover" explored what happens next in the increasingly complicated case. Octavio Marenzi of management consultancy Opimas shared his crypto markets analysis and outlook for 2023. Plus, Maple Finance CEO Sid Powell discussed the platform's overhaul and future of crypto lending.

Headlines

Protocol Developer Archblock Aims to Bring US Community Banks to DeFi Through Partnership: Archblock and Adapt3r's joint effort highlights an accelerating trend in DeFi to cozy up with old-school banking.

CryptoQuant: On-Chain Data Shows Crypto Exchange Binance Isn't Exhibiting ‘FTX-Like’ Behavior: The analytics firm found the exchange is almost entirely collateralized and diversified away from its proprietary token.

Ethereum Name Service DAO Votes on Stewards for Three Working Groups: The stewards will be responsible for the Meta-Governance, ENS ecosystem, and the Public Goods working groups for 2023.

Wintermute, Venture Cap Octopus Given Seats on Key FTX Creditor Committee: The crypto firms and individual investors will play a key role in representing the issues of the million or so potentially owed money by Sam Bankman-Fried’s company

The Next Step in the Evolution of Web3: Regenerative Finance: “ReFi,” coined by economist John Fullerton, is the process of using markets to fix the issues markets have created. Crypto, the freest market system yet, can help bootstrap efforts to regenerate the world economy.

Web3 Domain Provider Unstoppable Domains to Integrate With Etherscan and Polygonscan: The integration will make it easier to trace domain addresses on the two blockchain explorers.