Web3 Development: Crisis Not a Barrier to Innovation
Alchemy has published its Q1 2023 report on Web3 developments, which reveals promising results despite the ongoing financial crisis and notable market volatility.
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Alchemy, a firm that equips millions of users from 197 countries with tools to create decentralized applications on various blockchains, analyzed key metrics such as library installations and smart contract launches on Ethereum. These areas remain primary focuses for Web3 developers, a group that continues to expand.
Web3 developers count and ETH price. Source: Alchemy's official report.
Is Ethereum SDK still a hot commodity?
Despite high transaction fees, Ethereum continues to be a frontrunner among blockchains for decentralized applications. Developers extensively use its SDK (Software Development Kit). Weekly installations have seen an 8% increase over three months and are up by 46% compared to Q1 2022.
Ethereum SDK installation count. Source: Alchemy's official report.
Wallet SDK downloads reach new heights
The Wallet SDK, used for creating support for a corresponding wallet in any blockchain application, is also essential. The number of weekly installations showed a quarterly growth of 33% (438,500 downloads) and a more than 4-fold increase over the year. The following SDKs were considered in the statistics: Coinbase, Rainbow, Web3 Onboard, Web3 Modal. Data for MetaMask, the most popular wallet, were considered separately: interactions with its SDK grew by 325% over the quarter, with peak values in March (6309 installations).
Number of Wallet SDK installs. Source: Alchemy's official report.
Ethereum testnets: Goerli or Sepolia?
While Wallet SDK usage suggests increasing numbers of applications aiming to support popular wallets, testnets represent the subsequent development stage. Although the number of smart contracts deployed on Goerli has risen by 577% since Q1 2022, it has dropped significantly (by 46%) over the past quarter.
This decline is largely attributed to a growing user base leading to a shortage of test ETH and a surge in its price. This situation has led many projects to shift to Sepolia, where tokens are unlimited. However, major players still prefer using Goerli.
Goerli faucet visitor count and Goerli ETH price. Source: Alchemy's official report.
Ethereum Mainnet: The situation is better than it appears
Once all errors and issues are fixed, developers deploy smart contracts in the mainnet, followed by an audit. This metric fell by 53% over the quarter, mirroring the trend in Goerli. However, the yearly dynamics showed a 48% growth. It should be noted that these figures are often inflated due to the Cointool Xen Batcher account, which creates a smart contract each time it interacts with someone. Excluding this account, the decrease would be only 19%.
Count of deployed smart contracts in Ethereum's main network. Source: Alchemy's official report.
L2 Solutions prevail
In the field of smart contracts deployment, leading platforms such as Arbitrum, Optimism, and Polygon have witnessed an annual growth of 160%, although they've faced a decrease of 30% compared to Q4 2022. The appeal of low fees and swift transactions remain a lure for both developers and users. With a significant proportion being retrodrop hunters, individuals are increasingly transferring tokens through bridges to second-tier layers, breaking new records with 635,000 wallets. This signifies a 44% surge over the last quarter, and an astonishing annual increase of 518%. Consequently, in spite of a slight dip in new application launches, this trend continues to draw substantial demand.
Developing through Alchemy
Project creators utilizing Alchemy harness various supplementary blockchains, with Arbitrum and Optimism standing out owing to their considerable growth. In a year's span, active teams working on Arbitrum have multiplied by 2,779%, and those on Optimism by 1,499%. These impressive figures are a testament to the ongoing allure of L2 projects, fostering a positive trend in the creation of second-tier ecosystems.
Wrapping up
In the grand scheme of things, Alchemy holds a favorable outlook on the Web3 market, continuing to invest in DeFi development and the creation of supplementary tools, acknowledging the potential inherent in every sector. Although the report doesn't encompass data on other blockchains like BNB Chain, Tron, and Avalanche, the available data on Ethereum and select L2 solutions offer a glimpse into the long-term trend within the realm of Web3 development. The trajectory is decidedly positive and broadly stable, albeit susceptible to minor dips.
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