Alchemy released its quarterly report Thursday assessing the state of Web3 development. Among other details, the analysis revealed that Ethereum and wallet SDK installations have reached all-time highs.
A large number of developers installing these SDKs shows that there is still an appetite for building applications in the Web3 space, despite the marked slowdown in NFT and DeFi trading volumes – down 41% and 27%, respectively, according to report.
Weekly wallet SDK installs reached 11.1 million in Q2 2023, up 22% quarter-over-quarter, according to the report. Similarly, Ethereum SDK installs increased 7% quarter-over-quarter, reaching almost 27 million.
Adding to the trust picture, developers created more Ethereum virtual machine smart contracts this quarter than ever before. On Ethereum, Polygon, Optimism and Arbitrum, the number of deployed smart contracts approached 80 million; a spike of more than 300% compared to last quarter.
Alchemy Growth Analyst Blake Tandowsky commented specifically on this trend, saying that a Layer 2 future is coming.
“What you’re seeing is Ethereum’s gradual shift from a largely Layer 1-centric use case environment to a fast-growing (Layer 2) environment, and we expect this trend to continues,” Tandowsky said.
The future is not entirely rosy for DeFi builders, however. Experts say that market sentiment still hasn’t recovered and little attention is being paid to crypto as a whole.
Alchemy also surveyed 625 Web3 developers to gauge their mood. The main obstacle to growth next year in their eyes? Funding.
They also said concerns about capital drying up outweighed their concerns about the potential impact of regulation on Web3’s growth; a fear that persists despite US authorities actively pursuing numerous high-profile cases to determine the classification of digital assets. Think Ripple, Coinbase And Binance.
The survey also found that developers’ top priorities are smart contract security and account abstraction. In his month of June Blog In this article, Vitalik Buterin touched on both of these topics in a discussion about the three transitions Ethereum needs to make to become truly secure and permissionless.
“When we look over the last few years, one of the common pieces of feedback we’ve heard from our developers… is that there’s still a long way to go in security,” Tandowsky told Blockworks.
He cited how people continue to lose seed phrases, lose custody of their assets, and be locked out of their MetaMask wallets.
With Metamask, Coinbase Wallet, or one of several external accounts, he explained that “the only way you’ll like to sign transactions…to and from peers or to dApps is to sign with a wallet that has your seed phrase in it.” .
Through account abstraction, users could authenticate to send money through alternative, more familiar means, such as a social media account, email, or Face ID.
“We think this will help increase people’s asset retention and bring more users into a space where they might otherwise be afraid,” he said.
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