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During the cold crypto winter, developers keep the candle burning

During the cold crypto winter, developers keep the candle burning

Despite the fact that the current crypto winter has begun to feel like an ice age, new data from Web3 developer platform Alchemy indicates that developers are forging forward and continuing to deploy on-chain.

Alchemy noted in its Web3 Development Report for the fourth quarter of 2022 that this past year saw token trading decline as Ethereum development increased. According to the report, non-fungible token (NFT) trading volume was down 94% year on year, while total value locked (TVL) in decentralised finance (DeFi) protocols was down 77%. Major cryptocurrencies, including BTC, ETH, and SOL, fell by 65%, 68%, and 94%, respectively.

And, even though the repercussions of FTX’s failure in November resulted in major losses that reverberated across industries, morale among Web3 developers remained high. Following the Ethereum merge at the end of Q3, the number of smart contracts deployed on the Ethereum mainnet surged by 453%, according to the report. In addition, 94.2% of the 985 developers polled by Alchemy expressed optimism about the future of Web 3.

In a news release accompanying the findings, Alchemy stated, “Web3’s typical highs and lows were on full display in Q4.” On the one hand, developers leaned into trustlessness, deploying smart contracts at rates comparable to the 2021 peaks. On the other hand, the collapse of major cryptocurrency exchanges shook the basis of customer trust.

While the fall of FTX led to a significant reduction in some metrics last quarter, according to Jason Shah, head of growth at Alchemy, the positive developer mood demonstrates a widening separation between cryptocurrencies and decentralised technologies.

It’s a tale of two cryptos, with centralised exchanges and financial fraud coexisting with builders and decentralised technology architecture,” Shah explained. “And, frankly, these are completely separate universes that are getting increasingly divorced.”

Shah also stated that the number of decentralised social applications (dapps) launched in Q4 increased by 58% among smart contracts deployed this quarter.

“It signals to us that a more sustainable and natural set of online products is being formed around that social sector,” Shah added.

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