Exploring the diverse landscape of Web3 development projects

Web3 has captured imaginations and headlines, offering visions of a decentralized online world. Yet skepticism persists: is Web3 a real innovation or a bubble ready to burst? Let’s take a first look at the projects Web3 developers are actually working on.

Decentralization evangelists promise a world devoid of centralized control, where developers and consumers will be free to explore, create, and build as they wish. However, after a few years of development, what projects are Web3 developers working on?

In our latest global developer survey, we asked web and back-end developers if they are currently involved in Web3 projects and, if so, what type of projects they are working on. The majority of these developers have never been involved in a Web3 project (58%), indicating that Web3 is still a nascent space. Although Web3 has technical challenges and often requires unconventional approaches to monetization, interest in it continues among some developers, despite many skeptics. Even with this interest from developers and consumers, Web3 has not yet emerged as a space that many developers feel the need to move their projects into.

Additionally, among developers involved in Web3 development, 44% are no longer actively working on such projects, and almost half of them stopped development in the last 12 months. The potential of Web3 is presented as vast, but its path to full realization is expected to be gradual. However, this attrition rate, which is to be expected given the nascent nature of Web3, raises questions about its current trajectory.

For the 24% of web and cloud developers working on Web3 projects, what are they actually building? The most common project type is decentralized finance (DeFi) applications, with 31% of Web3 developers working on them. DeFi offers a system and framework for people to participate in financial transactions and investments without the need to go through current financial instruments. This aims to reduce reliance on the multiple layers of traders involved in managing and securing transactions, as well as the regulations and laws currently in place to protect individuals investing or transacting.

While these systems may appeal to developers and provide an easy way to monetize their projects, current perceptions of DeFi may make widespread adoption difficult. DeFi applications place a lot of responsibility and risk on users rather than institutions. Additionally, DeFi is more popular among less experienced developers, as well as developers in the Middle East and Africa (39%) and East Asia (35%). This could be more attractive to regions with a history of unstable currencies or depreciating wages, where the unstable cryptocurrency market is even safer than their fiat currency. As such, broadening interest beyond those already engaged in the crypto space, whether for ideological or practical reasons, can be difficult, as evidenced by the fact that DeFi revenues are no longer seeing growth. significant growth.

Other finance-focused projects are also popular among Web3 developers, with 25% working on non-fungible token (NFT) marketplaces and 20% involved in decentralized autonomous organizations (DAO) applications. NFT marketplaces allow users to exchange tokens, typically associated with receipts of ownership of an image, with cryptocurrencies where the owner makes a small share of each transaction or minting of an NFT. DAOs are comparable to financial institutions involved in spending, investing or holding capital, but focused on cryptocurrencies and smart contracts.

However, the regional popularity of these two projects may be indicative of the future of these other projects. Similar to DeFi, NFT marketplaces are most popular among developers in the Middle East & Africa (30%) and East Asia (27%). Similar motivations behind distrust of local fiat currencies may lead to interest in decentralized ownership verification mechanisms. In contrast, interest in DAOs is highest among North American developers (29%). Although DAOs have multiple uses, their ability to act as a collective financial institution may particularly appeal to North American developers who want access to methods of generating passive income that they may have otherwise found difficult to access.

The motivations of developers in these regions are likely to define the use cases for these projects, which may limit their growth beyond those interested in high-tech.

Another example can be seen in the popularity of Web3 gaming apps in East Asia (31%) compared to all other regions. East Asian game developers and consumers are fans of a particular type of collectible game, gacha, which translates well to play-to-earn and blockchain mechanics.

However, this type of game has received political orientation from certain governments, accusing it of encouraging gambling or exploitative mechanisms. This could lead to strong regionalization of Web3 games, with some areas able to produce popular, well-monetized games, while others struggle with regulations and demonstrate their value and use of Web3 technologies. This can be seen with North American and European gaming communities displaying high levels of hostility towards Web3 in general.

Web3 projects are most popular among developers with three to five years (31%) and six to ten years (29%) of experience, and the lowest involvement of the most experienced and least experienced developers (22% and 13% of developers with less experience). more than one year or more than 16 years of experience, respectively). This suggests that Web3 development is less accessible to less experienced developers. However, the lower adoption of Web3 projects by the most experienced developers suggests several possible situations.

More experienced developers have greater expertise in their respective fields and, as such, are likely to focus on complex projects in more traditional development spaces, reducing the proportion of people moving to Web3. Additionally, Web3 is still a relatively unproven space, and experienced developers have seen many trends or new paradigms rise and fall without having a lasting impact on the industry. This may lead them to be less interested in engaging with Web3 as early adopters, and wait for it to first prove its value to them or their development projects.

However, when looking at the specific types of projects that developers of different experience levels are involved in, we can see a pretty noticeable divergence in project choices. Web3 projects traditionally associated with the cryptocurrency space are the most popular among mid-career developers.

DeFi is most popular among developers with three to ten years of experience (34%), with NFT marketplaces and DAOs most popular among those with six to ten years of experience (31% and 26%, respectively). ). Additionally, DeFi remains the most popular choice for all developers with less than ten years of experience. Until recently, cryptocurrency and its associated activities were in very experiential and unproven stages of development. As such, more experienced developers may not have focused their attention on this area, leaving it as a space where less experienced developers were able to generate their own domain-specific expertise. As they gain prominence, those who had previously tinkered in this field are now entering the mid-career phase and positioning themselves to capitalize on their early interest.

However, projects that are more closely associated with traditional development projects are undertaken in greater proportion by more experienced developers. Identity verification and authentication systems are popular projects for developers with 11+ years of experience. Likewise, we consider decentralized storage solutions and supply chain or logistics solutions to be among the most popular among more experienced developers.

When we look at Web3 development, we can see that the most experienced developers seem to be focused on solving traditional solutions with the new technologies that Web3 uniquely enables. On the other hand, less experienced developers focus more on new projects that can only exist under Web3 technology paradigms. More concretely, more experienced developers transform old challenges with new solutions, while less experienced developers attempt to create entirely new technologies.

This article is part of the developer information offered in the State of Developer Nation 25th Edition. You can access the full report which covers:

1. Language Communities – An Update

2. Create a sense of community – How developers interact and engage with their peers

3. How generative AI will affect developers’ work

4. Web3 Unveiled – Exploring the Diverse Landscape of Web3 Development Projects

5. From Code to Consumer Magic – The Software Developers Behind Our Everyday Electronic Devices

6. What are people building in AR/VR?

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