Web3 developer growth hit an all-time high in 2021, yet challenges lie ahead for new developers flooding the space.

“Web3” may be one of the biggest buzzwords of 2022, but the idea of creating an entirely decentralized platform to host decentralized applications has long been a vision of the crypto community. While it’s notable that some blockchain companies began building out Web3 applications four or five years ago, the Web3 space has only started gaining traction recently. 

The recent growth of Web3 was highlighted in a new report from Electric Capital, a venture capital firm that has been investing in Web3 companies since 2018. The “Electric Capital 2021 Developer Report” analyzed data from nearly 500,000 code repositories and 160 million code commits across Web3, finding that over 34,000 new developers committed code to Web3 projects in 2021 — the highest number of developers in history according to the document.

Moreover, the report pointed out that 65% of active developers and 45% of full-time developers started working on Web3 last year. The document also found that over 18,000 monthly active developers commit code to open-source crypto and Web3 projects today, primarily building on the Ethereum network.

Web2 developers flood the Web3 space

 Maria Shen, a partner at Electric Capital, told Cointelegraph that 2021 was a year of historic growth for Web3 development, as it brought in the highest number of monthly active developers the crypto space has ever seen. She elaborated that this number refers only to open-source developers:

“While there are a large number of closed-source developers working in crypto, Web3 is highly open-source. This is the main difference between how companies function in Web3 from Web2. In Web2, everyone is developing privately before the final product is shipped. In Web3, developers are shipping and building in the open.”

Even with these differences, Shen remarked that an increasingly high number of Web2 developers have been migrating into the Web3 space recently. She believes this is the case partly because Web3 allows for a more flexible point of entry.

For instance, Shen explained that part-time developers can easily come in and build out Web3 projects. “In Web2, you either work for Google, or you don’t. There really isn’t an option in-between. But Web3 allows for hobbyists to join,” she said. And due to its open nature, Shen explained, the Web3 space contains more of a variety for developers, letting individuals work either full-time, part-time or even on occasion. She said:

“Full-time developers may commit 10 or more days a month to a project, while a part-time developer may only work nights and weekends. We are seeing Web2 developers come in because Web3 uniquely allows this to happen.”

Another reason Web2 developers have taken a recent interest in Web3 is mainstream adoption. For instance, Shen remarked that the rise of nonfungible tokens (NFT) has helped usher in a new group of developers who are focused on art, design and supporting creators. Echoing this sentiment, Tegan Kline, co-founder of Edge and Node — the development team behind open-source indexing protocol The Graph — told Cointelegraph that developers everywhere are dipping their toes into Web3 due to the rise of decentralized finance and NFTs. “NFTs have made it easy for traditional companies to enter Web3,” she said.

Kline added that The Graph has seen a 300% year-over-year developer growth, noting that Edge and Node has recently hired engineers from Google, Amazon Web Services and Airbnb, along with individuals from traditional financial organizations. “The mass exodus into Web3 is here, and I think we will continue to see more tech companies move into the space,” said Kline. 

Solutions are maturing to help Web3 developers build

In addition to a more flexible point of entry and mainstream adoption, it’s important to point out that solutions are maturing, making it much easier for developers to build products for decentralized, Web3 ecosystems.

For example, taking centralized points of data and incorporating that within decentralized protocols is an important feature of Web3.

Heikki Vänttinen, co-founder of blockchain oracle API3, told Cointelegraph that API3 aims to bring off-chain data sources — such as real-world weather data — to blockchain networks at scale. “We bring the API economy to the blockchain to enable decentralized applications and smart contracts to do things based on real-world data and events,” he said. Vänttinen explained that the oracle’s “Beacon” features are continuously updated data feeds, each powered by a single first-party oracle, which makes it easier for Web3 projects to build on API3’s technology.

Vänttinen further mentioned that Beacons eliminate the need for third-party oracles, like Chainlink for instance. “Instead of having a third-party entity that exists between a smart contract on-chain, Beacons enable APIs to be directly connected to a smart contract instead of having a middleman oraclize the data source off-chain.” In turn, Vänttinen explained that data querying for Web3 development has become more cost-efficient, faster and better regulated.

To put this in perspective, Shawn Douglass, CEO of Amberdata — a digital asset data provider — told Cointelegraph that Amberdata is using API3’s Beacons to offer its APIs on-chain in the form of first-party oracles. “This provides a more secure and cost-efficient approach than alternative solutions that employ middlemen,” he remarked.

In regard to how this may help Web3 developers, Douglass said that Ameberdata Beacons will be used at ETHDenver 2022’s “Buidlathon,” where over 3,000 Web3 developers will have the opportunity to build their own API3-powered data feeds. While Douglass commented that he is curious to see what use cases will be built, he explained that Beacons are not about helping developers build faster. “This solution is more about enabling developers to build with data directly from proven, reputable data providers, without having to rely on third-party oracles,” he said.

Data aside, another challenge facing Web3 developers today is integrating new products into crypto wallets. Erik Marks, an engineer at MetaMask — a software cryptocurrency wallet for the Ethereum blockchain — told Cointelegraph that integrating with wallets is often the fastest and, sometimes, the only way to grow a product’s user base in Web3:

“This is especially true for those building completely novel things — for example, networks and protocols, exotic assets, scaling solutions, etc. Any application can only build and maintain so many features at a time, and some integrations inevitably become de-prioritized.”

In order to ensure that developers can easily build out Web3 applications, Marks explained that MetaMask has released a new feature called “Snaps.” Marks added that Snaps was recently released through MetaMask Flask, which is the company’s developer-focused distribution channel.

According to Marks, Snaps was designed to allow developers to expand the functionality of MetaMask at runtime without the organization’s involvement:

“Developers can add their own features and make them available to users by themselves. Any wallet developer will tell you that providing first-class support for just Ethereum and its various layer-2 networks is challenging enough, to say nothing of the up-and-coming layer-1 networks out there. The only way to keep up is to invite the Web3 developer community into the wallet itself and allow anyone to extend its capabilities with as little involvement from us as possible.”

Adding to this, Jacobc.eth, lead of operations at MetaMask, told Cointelegraph that when Snaps matures, getting MetaMask to support hardware wallets, layer-2 networks or new asset types will no longer involve asking MetaMask. “You’ll just build a Snap and then tell your users about it,” he said.

Web3 developers will continue to increase over time

Given the maturing Web3 ecosystem, industry experts believe that the Web3 developer space will continue to grow over time. Shen thinks this is the case by looking back at how the crypto space has matured previously. She mentioned that during the 2017 and 2018 bull run, crypto prices peaked in January 2018, but developers didn’t start flooding the space until about a year later. “If we think this market is like the last one, developers will still be coming in through 2023.”

Kline further commented that the Web3 space is already going mainstream, yet she predicts that the next six to 12 months will focus on finalizing the sector. “We’ve reached the limits of what we can do in a centralized world. Web3 is allowing us to scale further.” While this may be, Shen pointed out that many challenges remain for Web3 developers. “In Web2, there are a lot of off-the-shelf tools developers can use to ship products fast, but you don’t have that in Web3,” she said. As such, Shen mentioned that creating the underlying infrastructure for Web3 will continue to pose challenges, remarking that although the space is maturing, it still lacks much-needed accessibility.

For example, interoperability is a major component still required of Web3, which would enable different ecosystems to communicate with one another. Maly Ly, co-founder and CEO of the Laconic Network — an upcoming blockchain project for aggregating data in Web3 — told Cointelegraph that different blockchains need to be able to communicate with each other in order to enable interoperability and expand utility.

Ly mentioned that the necessity for cross-chain communication has led to the proliferation of bridges, which require faster and more flexible access to verifiable blockchain data, or proofs. With this, Ly believes that a number of solutions will arise this year to meet these challenges:

“The promise of Web3 is aligned with network, builder and user incentives reliant on trustless systems where data availability and verifiability is essential. Solving these fundamental data querying and verification problems will help address core decentralized application development and adoption challenges.” 

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.