In an industry where innovation drives value, the cryptocurrency sector is facing a troubling trend: developer activity has plummeted by 40% in just one year. This dramatic decline signals potential challenges for the long-term health and innovation capacity of the entire blockchain ecosystem. As the institutional adoption grows, why are the builders, the very people who create and maintain the technology, stepping away?
The exodus of developer talent from crypto projects comes at a critical juncture, with venture capital trends shifting and AI increasingly capturing investor attention. This article examines the causes and consequences of this developer decline, the changing venture capital landscape, and what this means for the future of blockchain technology.
- Ethereum, Solana, and Cosmos Network Stack lead in both developer engagement and code commits, but all major chains have experienced recent declines in activity.
- Developer activity is a critical metric for ecosystem health, often preceding value creation and innovation.
Top Ecosystems by Blockchain Developer Activity (April 2025)
| Ecosystem | Weekly Active Devs | Weekly Commits | 1Y Change (Devs) | 1Y Change (Commits) |
|---|---|---|---|---|
| Ethereum | 2,469 | 30,855 | -15.0% | -28.0% |
| Solana | 716 | 3,921 | -19.0% | -25.5% |
| Cosmos Network Stack | 666 | 7,031 | -24.1% | -9.6% |
| Foundry | 575 | 2,211 | -4.3% | -12.5% |
| Cosmos Network | 559 | 4,803 | -16.9% | 6.3% |
Macro Trends and Insights
1. Declining Activity, But Resilient Core
- Most major chains have seen a decline in both weekly active developers and commits over the past 6-12 months.
- Ethereum, despite a 15% drop in active devs and a 28% drop in commits over the past year, still leads by a wide margin, reflecting its foundational role in Web3.
- Solana and Cosmos ecosystems also show double-digit declines, which may reflect broader market cycles or developer migration.
2. Bear Market Resilience
- Even with declines, the number of weekly active developers remains significantly higher than during the last bear market in 2020, indicating a maturing and committed developer base.
- Artemis data shows 6,000-7,000 weekly active developers ecosystem-wide since early 2023, with daily active devs near 1,700.
3. Commits as Productivity Proxy
- Artemis uses weekly commits as a proxy for productivity, with over 50,000 weekly commits tracked across the crypto ecosystem.
- Discrepancies in reported numbers (e.g., Artemis vs. Token Terminal) stem from differences in data sources and inclusion criteria, such as sub-ecosystem and application-level activity.
4. Ecosystem Diversification
- The Polkadot ecosystem exemplifies how activity is not always concentrated on the main chain; parachains and appchains often drive more usage and innovation.
- Artemis’s expanded analytics for Polkadot and its parachains highlight the importance of cross-chain and multi-chain development.
5. Developer Activity as a Leading Indicator
- Sustained developer activity is a leading indicator of future value creation, as developer engagement precedes user adoption and ecosystem growth.
- The cyclical nature of commits (e.g., holiday dips) and event-driven spikes (e.g., major upgrades, crises) reflects the responsiveness and adaptability of the crypto developer community.
The Alarming Drop in Blockchain Developer Activity
Data from crypto metrics aggregator Artemis Terminal reveals a stark reality: weekly active developers in the crypto space have fallen from approximately 12,000 in April 2024 to just 7,290 by March 2025—a 40% decrease in a single year. Even more concerning, this figure dipped below 5,270 in late December 2024 before slightly recovering in January.
This decline isn’t isolated to a few projects. According to Artemis data, the crypto space encompasses over 1,500 ecosystems, many with multiple sub-ecosystems, suggesting the downturn is widespread. Other sources confirm similar numbers, with some reporting the decline at 38.6% year-over-year.
For specific platforms like Solana, the trend is particularly concerning. Despite Solana’s strong price performance, its core developer count has been declining since 2022, while competitor Ethereum has maintained steady growth in its developer base. This disparity highlights how market performance doesn’t necessarily correlate with developer retention.
The Critical Role of Developers in Blockchain Ecosystems
Why does developer activity matter so much? Developers are the lifeblood of blockchain technology—they build applications, maintain protocols, and drive innovation. A reduction in developer activity suggests decreased innovation and inadequate maintenance across crypto protocols, raising serious doubts about the industry’s long-term viability.
Binji Pande, a contributor to the Ethereum-based layer-2 network Optimism, explains that the decline indicates “attention has shifted, incentives have dried up, and speculation is moving faster than utility in the crypto space”. Pande argues that the industry has become “rife with narrative-led development when there should be more development-led narratives”.
This sentiment is echoed by other developers who suggest the industry needs to return to basics and support applications that demonstrate the futuristic potential of crypto. Without active developers, protocols stagnate, security vulnerabilities go unpatched, and new features stop emerging.
The Venture Capital Factor: Following the Money
The developer exodus coincides with significant changes in venture capital funding patterns. According to Stephen Flanders‘ analysis, the overwhelming consensus is that “crypto beyond bitcoin, stablecoins, and pump.fun is simply put extremely cooked”.
Flanders places much of the blame on venture capitalists: “I think the VCs are mostly to blame, who, without their rape train of low float high fdv L1s, have mostly retreated from the space”. His analysis shows that even in 2024, when Bitcoin reached $100,000, VC investment barely surpassed the “barren 2023” levels.
Looking at early-stage funding (angel, pre-seed, and seed rounds), the situation appears even more dire, particularly concerning since these rounds typically fund the most innovative ideas.
AI vs. Crypto
As crypto struggles to attract venture funding, artificial intelligence has emerged as the preferred destination for investment dollars. In Q1 2025, U.S. crypto venture funding reached approximately $861 million—a respectable figure until compared with AI’s nearly $20 billion haul during the same period.
The blockbuster deals tell the story: While crypto’s largest deal was a $2 billion investment into Binance by Abu Dhabi’s MGX, AI boasted Databricks’ $15.3 billion round and Anthropic’s $2 billion raise. The pattern extends beyond a single quarter, AI startups attracted $131.5 billion in 2024 (one-third of global VC investment) across 4,318 deals, compared to crypto’s $4.9 billion across just 706 deals.
This preference for AI over crypto isn’t new. Historical data shows consistent growth in AI funding, from $670 million in 2011 to $36 billion in 2020. The gap between the two sectors has only widened since then.
Why Have VCs Lost Faith in Crypto?
The retreat of venture capital from crypto can be attributed to several factors:
1. Past Investment Experiences
The peak of VC excitement in crypto occurred in 2021-2022 during the height of crypto mania. VCs who invested in “cool” projects often faced poor returns, while those who backed “free money” projects like L1s and bridges sometimes made substantial profits. This created a mixed legacy that influences current investment decisions.
2. Market Maturation
The crypto market has evolved beyond its early speculative phase. As Flanders notes, “You don’t need 75 L2s or 23 bridges, so these deals are just not available anymore”. Investors have also become warier of potentially predatory tokenomics, leading to decreased exit liquidity.
3. Shifting Risk-Reward Calculus
With AI offering potentially higher returns with clearer use cases, VCs are reallocating their risk capital. As one Reddit commenter observed, “If I were a VC and I wanted to bet on something with upside, I’m not going to be as interested [in crypto]”. The perception that crypto has yet to deliver world-shifting applications after 17 years further dampens enthusiasm.
4. Regulatory Uncertainty
While the regulatory environment for crypto has improved in some respects, uncertainty remains a significant concern for investors. Even “stability over action” would be viewed positively by the industry after years of unpredictable regulatory approaches.
Why Are Builders Leaving?
The decline in developer activity isn’t solely attributable to funding shortages. Developers themselves point to several factors driving their exit:
1. Misaligned Incentives
According to Binji Pande, the crypto industry often rewards speculation over utility. “People who are building real applications rarely get the spotlight, and capital in the crypto space still flows to short-term ‘dopamine loops,’” he explains. This creates a discouraging environment for serious builders.
2. Lack of Meaningful On-Chain Activity
Developers find themselves building applications with little actual usage. Pande notes there is “not much to do on-chain” currently, making it difficult to justify continued development efforts. Without meaningful activity, “distribution starts to lose its power, and worse still, the game of chasing dopamine loops is beginning to collapse under its weight”.
3. The Brain Drain to AI
Similar to VC funding, developer talent is being drawn to AI and other frontier technologies. Alliance, previously one of the most active early-stage investors in crypto, has begun pivoting, with 30% of their recent batch being “pure AI startups”. This shift reflects broader talent migration patterns.
4. Project Lifecycle Issues
Many crypto projects launched during the 2021-2022 boom have either failed or reached maturity, requiring fewer active developers. Without new projects to replace them, the overall developer count naturally declines.
Signs of Potential Recovery
Despite the concerning trends, there are some positive indicators for the crypto development ecosystem:
1. Projected VC Funding Rebound
PitchBook analyst Robert Le projects crypto venture capital funding to reach $18 billion in 2025, representing a 50% increase compared to 2024. This would mark the strongest funding environment since the peak of the last cycle.
2. Q1 2025 Funding Surge
The first quarter of 2025 saw $4.8 billion in crypto VC funding, the highest since Q3 2022. This quarter alone represented 60% of the total VC capital deployed in all of 2024, suggesting a potential turning point.
3. Institutional Involvement
Financial institutions are increasingly leveraging their regulatory relationships to facilitate investments in the sector. Standard Chartered analysts predict that institutional inflows will not slow down in 2025 and may even accelerate.
4. Focus Shift to Application Layer
The focus of crypto VC funding is transitioning from infrastructure projects to application-layer innovations. This could drive a new wave of development focused on real-world use cases rather than speculative infrastructure plays.
Case Study: Polymarket’s Long Road to Success
Polymarket offers an instructive example of why patient capital is crucial for crypto innovation. Polymarket raised seed funding in October 2020 but didn’t raise again until 2024. For four years, they gained virtually no traction, with minimal monthly active user growth.
“It’s an almost certainty that they would’ve died without the seed funding, and that would’ve been terrible not just for the crypto ecosystem, but the world as a whole,” Flanders argues. This raises a critical question: If Polymarket were still in its 2020 form, would VCs invest in it today?
The developer decline isn’t uniform across all regions. Geographic and regulatory environments play significant roles in determining where crypto activity flourishes. Research indicates that countries with higher institutional quality can attract more Bitcoin traders, with corruption paradoxically attracting investors while internal and external conflicts repel them.
The influence of regulatory factors is evident in projections that suggest “regulatory clarity or reduced enforcement actions under a new administration could create a favorable environment for crypto innovation”. This highlights how policy shifts can directly impact developer activity and investment flows.
Revitalizing Crypto Development
For the crypto industry to reverse the developer decline and return to a growth trajectory, several key changes are needed:
1. Refocus on Real-World Utility
Binji Pande argues that “the next era of crypto will be unlocked by meaningful on-chain activity, not a bull market driven by trade winds”. This means prioritizing applications that solve genuine problems and create value beyond speculation.
2. Sustainable Funding Models
The industry needs funding models that allow developers to focus on building rather than token price maintenance. As Flanders notes, “The beauty of private funding is that once you get the money, you can put your head back down and focus on building”.
3. Developer Support Ecosystems
More support is needed for teams “thinking about end-to-end products, not just code”. This includes better documentation, more accessible tools, and communities that prioritize builder success.
4. Educational Initiatives
Research shows that developers increasingly turn to community platforms like Reddit rather than traditional sites like Stack Overflow. Creating better educational resources on these platforms could help attract and retain talent.
5. Patience and Long-Term Vision
The industry may need to embrace slower growth and longer development cycles. As one commenter noted, comparing crypto to AI, “AI has gone through two major ‘winters’ that combined spanned almost 20 years,” before its current renaissance.
The 40% decline in crypto developer activity represents a critical juncture for the blockchain industry. While concerning, this decline may be part of a natural evolution as the industry matures beyond its purely speculative phase toward sustainable utility.
As Flanders concludes: “At this point, one of two scenarios has to be true. Either we are still early and mainstream adoption is still possible, or crypto is rubbery-rare cooked”. The truth likely lies somewhere in between, crypto has shown remarkable resilience despite numerous challenges, but needs to evolve beyond speculation to fulfill its potential.
The developer exodus signals that the industry must refocus on building applications with genuine utility while creating sustainable environments for builders. Venture capital remains essential to this process, providing the runway needed for innovative ideas to mature.
The projected rebound in VC funding for 2025 offers hope, but the industry cannot rely solely on capital inflows to solve its challenges. A fundamental shift toward development-led narratives rather than narrative-led development may be the key to revitalizing the ecosystem and bringing developers back to the blockchain space.
For an industry built on the premise of decentralization, the path forward ironically depends on re-centralizing focubins on what truly matters: creating technology that improves lives rather than merely enriching speculators. Only then can crypto fulfill its promise of transforming not just finance, but the broader digital landscape.