Outlier Ventures report: EOS, Bitcoin Cash and TRON are massively abandoned by developers
The crypto industry continues its rapid development, despite the global crisis. It would seem that the activity of blockchain developers should also grow, but judging by the latest Outlier Ventures report, this is not entirely true. The company's analysts studied the activity of developers of leading crypto projects and came to the conclusion that over the past 12 months it has decreased by about 20%, primarily due to coronavirus. Some projects have suffered much more than others, especially EOS and TRON. Obviously, the reason here is far from a pandemic alone. But not everything is so bad, as other projects confidently rushing into the blockchain arena, striving to become one of the industry leaders. Among them are Cosmos, Polkadot, Theta and Cardano, which are causing increased interest among blockchain specialists.
Outlier Ventures is a venture platform that strongly supports the development and growth of new technologies. Including its experts carry out detailed analyzes to identify the ins and outs of a particular industry. This time they studied the activity of developing leading blockchain projects over the past 12 months.
To conduct the analysis, the company used its own code, which, together with the methodology and data sources, was made publicly available on the GitHub repository.
Outlier Ventures report key findings:
• On average, developer activity has declined in almost all major protocols. Basically, there was a "moderate decrease in activity" - most blockchain projects left no more than 20% of specialists. But there are exceptions - some cryptocurrencies suffered much more seriously - EOS, Bitcoin Cash and TRON began to support 86%, 63% and 51% fewer developers than a year ago.
• The main reason for the leaving of the developers, experts call the COVID-19 pandemic, with the exception of unique cases where other factors strongly influenced the state of affairs.
• The leaders in attracting new programmers to their ranks were the Polkadot and Cosmos projects, which were joined by 44% and 15%, respectively, more developers than a year earlier. However, analysts at Outlier Ventures believe that after recent large-scale releases, this growth may slow down.
• Theta and Cardano projects have become leaders in the rate of change of the core protocol core. They showed the largest increase in the number of code updates — an impressive 931% and 580%. However, experts predict in the future some fading enthusiasm against the background of the recent depreciation of these coins.
• The Ethereum network continues to be the most popular platform for developers of smart contracts and dApps. The index of its dominance in these areas is 79% and 82%, respectively. Moreover, the daily number of Ethereum-based dApps users is twice as high as that of its closest competitors.
• A newcomer confidently squeezed into the niche of decentralized applications and smart contracts - the Klaytn platform, which unexpectedly in the last year entered the top 5 most popular multifunctional blockchain platforms. Soon Cosmos and Polkadot should join this list.
Let's analyze the Outlier Ventures report in more detail.
Number of active developers
Almost all the major protocols, including the Bitcoin network, began to support up to 20% fewer developers. Analysts consider the coronavirus pandemic to be the main culprit, which has shifted the focus in the crypto industry (as elsewhere in the world) from research and development (R&D) to supporting business projects. In addition, coronavirus caused sharp cryptocurrency market collapses, which probably led to a decrease in external interest and, consequently, to a decrease in the number of enthusiasts.
At the same time, the EOS (-86%), Bitcoin Cash (-63%) and TRON (-51%) projects stood out from the rest, showing a much sharper decrease in the interest of blockchain encoders.
The worst dynamics of developer activity are in EOS, Bitcoin Cash, and TRON. Source.
⁃ In the case of EOS, the departure of programmers has continued since the launch of the main network in 2019. Kernel developers are moving away from the protocol. The situation is aggravated by overloads, interruptions and other problems that accompany the “Ethereum killer” and lead to a decrease in its ratings.
⁃ Activity in the Bitcoin Cash network has been declining for a long time. The recession began after the hard fork, as a result of which another “true” Bitcoin was born - Bitcoin SV. Naturally, disagreements within the network only exacerbate the situation. The recession may slow down or reverse when the hype around this whole situation has subsided.
⁃ The main reason for the developers to leave TRON is primarily due to the falling quotes that accompanied the coin for almost the entire year. The decline in prices, combined with the conflicts that accompany the project of TRON and its creator Justin Sun, negatively affected the desire of coders to contribute to the development of the product.
The main projects that did not face the departure of specialists, but, on the contrary, attracted many new talents, were Polkadot (+44%) and Cosmos (+15%).
The Polkadot project attracted the most developers over the year. Source.
It is noteworthy that experts associate a significant increase in activity again with a pandemic. Due to the reduction of the budget for research and development, many companies and programmers who want to work with blockchain technology have decided not to create their own networks in favor of existing solutions in the market. And recently, around Polkadot and Cosmos, a positive news background and high expectations have formed.
However, it is unlikely that Polkadot will be able to maintain a three-fold increase in popularity compared to Cosmos for a long time. The increased interest from external developers in the platform occurred on the eve of the launch of the Mainnet, which partially took place in May 2020. A similar surge in activity once accompanied the Cosmos platform, but after the launch of the Mainnet, when the hype died down, it expectedly decreased.
The dynamics of interest of developers over 12 months. Source.
Code Update Rate
If earlier we talked about the number of active developers working on code, now it's time to take a look at the quality of their work. Outlier Ventures analysts measured the pace of GitHub commits and the frequency of code updates. The study touched the 30 largest open source cryptocurrencies by capitalization and two leading non-tokenized platforms - Corda and Hyperledger.
Experts note that throughout the industry, the activity of developing basic protocols was very unstable with sharp ups and downs in the frequency of code updates. The bulk of the projects recorded a decrease in activity during the holidays and faced a slow recovery, probably caused by the same COVID-19.
The dynamics of the code update frequency of leading crypto projects. Source.
In this field, MakerDAO, TRON, and EOS suffered the most - the pace of updating their core almost halved compared to a year earlier.
⁃ MakerDAO code refresh rate decreased by 98%. The main reason is the excessively high activity in 2019 related to the development and launch of the stablecoin DAI and the inability to maintain this momentum after the New Year holidays due to the coronavirus. A drop in enthusiasm can also be exacerbated by the discovery of unexpected vulnerabilities in the MakerDAO project. However, taking into account the dominant position of the company in the DeFi sector, experts predict that the trend will unfold soon.
⁃ The TRON code refresh rate fell by 96%, and EOS - by 94%. The reasons, apparently, are the same as with an active developer base.
The worst code updates are MakerDAO, TRON, and EOS. Source.
The undisputed leaders were Theta and Cardano, who by a huge margin ahead of other crypto projects.
⁃ Theta core update rate increased by 931% compared to last year. Experts attribute tenfold growth to the successful launch of the main network in late May, positive price dynamics and low development activity in 2019.
⁃ Cardano code has been updated more often by 580%. The reasons probably lie in the upcoming release of the long-awaited Shelley update, which made Cardano one of the most promising projects of the year, and in the bullish mood in the market that has been accompanying the ADA coin for several months.
The leaders in code update rates are Theta and Cardano. Source.
Experts also clearly demonstrated the dynamics of changing the code of all “three bitcoins”. Throughout the year, the Bitcoin and Bitcoin Cash networks (even despite the departure of many developers) maintained high-quality core development rates, but Bitcoin SV showed a significant decline in activity.
Bitcoin and Bitcoin Cash continue to grow rapidly, while Bitcoin SV is in decline. Source.
Decentralized Applications and Smart Contracts
In addition to the activities of blockchain developers, analysts studied the activity of users of platforms for smart contracts and decentralized applications.
⁃ As expected, the Ethereum network is the undisputed industry leader. 79% of all smart contracts and 82% of all dApps are launched through the network of Vitalik Buterin.
⁃ In second place in terms of the number of created applications and smart contracts is EOS. Despite the “developers’ flight ”and a twofold decrease in the code update rate, it still remains Ethereum’s closest pursuer. EOS accounts for 9% in both categories - both in smart contracts and in decentralized applications.
⁃ The top three is closed by the Steem platform, which accounts for 3% of all smart contracts and 2% of all dApps created.
Ethereum is the undisputed leader in the share of smart contracts and dApps on the market. Source.
The positions of the second and third places are rather shaky, given the previously mentioned problems of EOS and TRON, especially if you recall that the latter is now directly related to the scandal surrounding Steem. Experts believe that the growing interest in the blockchain platforms Cosmos and Polkadot can give them a real chance to break into the race and crowd out Ethereum's closest pursuers. However, Ethereum itself is unlikely to be overthrown, at least in the near future, given such a huge gap and the status of a pioneer.
But the daily active user base is a more competitive category, but even here Ethereum boasts a result that is more than double that of its rivals. 32,000 people use Ethereum-based dApps daily, and 14,000 use EOS-based applications.
According to the daily number of active users, dApps is also the undisputed leader in Ethereum. Source.
Analysts note that future trends regarding daily user activity are difficult to predict, but emphasize that the departure of developers from EOS and TRON may affect the number of people using applications. Similarly, the growing popularity of Cosmos and Polkadot are likely to quickly grow their user base after they have the opportunity to create dApps and smart contracts on their networks.
Finally, experts noted a sharp rise in the popularity of the little-known Klaytn platform, which unexpectedly entered the top 5 in all three indicators - the share of smart contracts and decentralized applications on the market, as well as the number of active users of dApps. The reason for Klaytn’s sharp popularity is difficult to determine, especially given the modest external interest in the platform code. However, taking into account that historically sharp and poorly substantiated ups are facing no less sharp falls, experts believe that Klaytn’s share in the market of smart contracts and dApps may decrease.
The activity of blockchain developers in 2020 decreased primarily due to the coronavirus. However, in most projects, the recession is too small to sound the alarm.
Bitcoin, Ethereum and other leading cryptocurrency networks continue to evolve, remain highly active on GitHub and grow their user base.
Cosmos, Polkadot, Theta and Cardano projects caused a high growth of interest from developers and users, having earned the status of one of the most promising blockchain projects at the moment. Watching their development will be very interesting.
But the state of TRON and EOS causes serious concern - especially the second. If Justin Sun’s project is still gaining a new audience and attracting attention through regular high-profile acquisitions and no less high-profile meetings, then in the case of EOS, developers ’flight is accompanied by users’ flight. In April, it became known that the user base of the platform for the year decreased by 70%.
EOS boasts a record in the history of the crypto industry ICO. In 2018, the developers managed to raise about $4 billion during the initial offer of coins. However, it is completely incomprehensible how the project team is going to please its investors. Due to the fact that many developers have left the ecosystem, it is not yet clear how EOS can reverse the decline in the number of users or offer new innovative decentralized applications to compete with more active protocols. How long will EOS be able to enter the top 10 cryptocurrencies by capitalization if developers and users leave in droves?