Developers stop contributing to the US crypto ecosystem.

– The implementation of smart contracts and active addresses in all blockchains have reached their respective ATHs.

Since Bitcoin [BTC] many other assets rallied to reach their respective All-Time Highs (ATH) in 2021, the cryptocurrency landscape is characterized by its dynamism and volatility, with constant ups and downs.

While there has been a concerted effort to move the industry forward, there have been changes in trendsdevelopments, participation and regulatory hurdles that never seem to disappear.

Among all these, the State of Crypto index Gained 11.54% in the last 30 days. But over the past year, the index fell 5.86%.

Compiled by a16z, the status of the crypto index refers to the percentage change that reflects the development, innovation and contributing parameters to the entire crypto economy.

Source: a16z

For the unskilled, the venture capital firm has been providing this data since 2016. According to the latest release, it was clear that the industry has experienced growth over the past month. And possibly all of 2023. But there were also drawbacks that certainly hindered growth.

Battling regulatory fever and attracting more developers

Based on the report, the United States’ approach to regulation has been a drag. For a while, the regulatory authorities, led by the US SEC, have made it difficult for crypto companies. Because of this, the likes of Ripple [XRP] had to fight tooth and nail to track progress. Exchanges, stablecoins, and regulator promoters tagged “securities” are not omitted.

Well, some might say the suppression is justified, especially given the way various institutions in the industry crumbled in 2022. Examples include the infamous Sam Bankman-Fried led ftxCelsius [USDC]and crypto hedge fund Three Arrows Capital (3AC).

For some, “extreme market conditions” were the cause of their downfall. Others, however, could not escape the blatant instances of mismanagement. But as regulations work their way into crypto organizations, a16z noted that the country was losing its lead in terms of developers and traffic.

Source: Electric Capital, similar web

However, the declining interest in the US has not had an entirely negative impact on the ecosystem. While there were some drawbacks, active and interested developers have maintained a good level of interaction.

Active developers refer to the number of developers engaged in public building in crypto. This metric measures the speed of public GitHub repositories. However, interested developers are those related to open source projects in the crypto ecosystem.

As of February 2023, there were 28,240 active developers. On the other hand, there were 55,760 interested developers. This figure implies that developers’ interest in participating in technological advancements in this area remained visible.

Source: a16z

ZKs, Optimists lead the drivers of participation

As a result, the developers involved have pushed the number of verified smart contracts to an all-time high. Smart contracts are self-executing programs used to automate the execution of an agreement on the blockchain.

At the time the report was released, there were 33,870 verified smart contracts. This means that the number of crypto applications already deployed has surpassed all previous years. Interestingly, these programs weren’t the only ones to hit new highs.

Active addresses also followed in the same footsteps. In crypto, an active address is a participant in successful transactions. Therefore, active addresses are the number of senders and recipients across a given blockchain.

However, this a16z data accumulated the metrics across different blockchains. And at the time of writing, there were more than 15 million active addresses. But there are reasons why participation increased. One notable component is the way several promising pathways are involved in driving traction and user adoption.

Source: a16z

For example the Ethereum [ETH] blockchain has seen the introduction of optimistic rollup scale projects such as arbitration [ARB]And Optimism [OP]. The zero knowledge [ZK] part is not omitted either. In this case, Polygon [MATIC], zkSyncAnd StarkNet [STRK] showed what they have to offer.

This has consistently proven to be a positive development for Ethereum. The blockchain also recorded a substantial increase in transaction fees. Besides that, the strike payout activation is also expected to drive more adoption for the second largest blockchain by market value.

NFT bulls may be on their way to…

Still on Ethereum. Recall that the blockchain was one of the main drivers and beneficiaries of NFTs in the 2021 bull market. Yes, bottom prices and sales volume have fallen, but NFT royalties have increased to $1.9 billion across all chains.

Moreso, some of the largest web2 brands are now exploring the digital collectibles and web3. Because of this and the development of new marketplaces such as Fadethe number of NFT traders recovered from the remarkable decline recorded in 2022.

Source: a16z

Apparently, Bitcoin has also been involved in this aspect with the evolution of Ordinal Numbers Enrollments. But as it stands, the crypto sector is not entirely free of challenges, especially with regard to unfavorable regulation.

Some of these have even prompted users to reduce exposure to centralized entities. In turn, it has led to an increase in the volume of decentralized exchanges (DEXs). Policymakers are conflicted about drafting bipartisan bills while enforcing regulatory action.

However, progress has been made. And with more builders entering the crypto space, there is a possibility that this will create more opportunities. Meanwhile, one cannot deny that NFT and DeFi activity were underwater. Despite this, there seem to be early signs that the perceived chaos could soon turn into a pleasant market cycle

This post Stalemate, Progress, and Drawbacks: Analyzing the Crypto Sector’s Push for Resurgence

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