What happens to the developers of a blockchain network after an entire ecosystem implodes? Terra offers a glimpse.
More than half of the 323 open-source developers who contributed to projects on Terra’s network before its algorithmic stablecoin collapsed in spring 2022 stopped working on crypto projects altogether by December, according to a report from Electric Capital.
Terra’s network halted in May, part of the fallout of its TerraUSD algorithmic stablecoin losing its one-to-one peg with the U.S. dollar and wiping out $40 billion worth of assets. In the aftermath, 180 developers appear to have stopped contributing to crypto projects, according to the Electric Capital report released earlier this month.
Of those who remained active, 42 developers migrated to other Cosmos network projects. According to Electric Capital, 35 developers have stuck with the network and are now working on the “Terra 2.0” rebuild, five others moved on to Solana, and 11 are now involved with Osmosis, a Cosmos-based decentralized exchange.
The collapse of Terra was a huge blow to the DeFi ecosystem, because Terra, itself an ecosystem built on Cosmos, had become the network of choice for DeFi traders after Ethereum.
Electric Capital, the venture capital firm that put together the crypto developer report, has been an early-stage investor in decentralized exchange dYdX, software wallet MetaMask and centralized exchange Kraken. The firm has led an open source effort to catalog GitHub repositories for crypto projects, which it uses to estimate how many active developers there are in the industry.
"An early and leading indicator of value creation in emerging technology ecosystems is developer engagement," Avichal Garg, a partner at the firm, told Decrypt in an email (and echoing language on the company's website). "Developers build killer applications that deliver value to end users, which attracts more customers, which then draws more developers."
In the aftermath of Terra halting and then restarting its blockchain, other networks launched efforts to help developers migrate their projects.
Juno Network, a Cosmos-based blockchain that lets different smart contracts interact with one another, was one of the first to create a grant program to help Terra projects migrate to the network. TronDAO, the organization behind the Tron blockchain, launched a $10 million fund to attract developers. Another large group of developers moved to Polygon.
Terra was one of several crypto ecosystems to have lost developers in 2022.
One of the other ecosystems, Harmony, saw its token price take a plunge after $100 million worth of assets was stolen from its Horizon Ethereum Bridge in June. Another is Fantom, a layer-1 blockchain that connects to Ethereum with a bridge chain, which has seen its growth curtailed amid security concerns.
Despite all the exits, Electric Capital estimates the crypto developer community grew by 5% in 2022. An all-time high of 61,000 developers contributed code to crypto projects for the first time during the year and more than 23,000 monthly developers were active as of December.
Last year there were also signs that the Bitcoin and Ethereum duopoly, at least in terms of core developers, was starting to wane. Up to 72% of monthly active developers worked on projects outside the two largest blockchains, according to the report. Solana, Near, and Polygon all grew by 40% since 2021, with more than 500 monthly active developers each.