The last five years of EVM development have shown consistent growth with SDK installs reaching ATHs each year.
Solana activity quickly gained momentum, competing with Ethereum's DEX and NFT volume in Q4.
ERC-4337 gains adoption 1.8 million total accounts deployed in just two quarters.
Solana and Polygon chip away at Ethereum's long-held market share, snagging 8% of NFT volume.
The OP Stack, Arbitrum Orbit and Polygon's CDK allowed new chains to launch as either L2s (settling to Ethereum) or L3s (settling to the layer 2).
NFTs: -76% Y/Y Trading volume to $12.78B USD DeFi trading volume: -30.28% Y/Y to $862.63B
Token Prices:
NFT: Pudgy Penguins launched toy and collectible line in collaboration with Walmart and zkSync, generating new licensing opportunities for Pudgy holders.
Loyalty: Boba Guys launched onchain loyalty program using Solana and plans to integrate NFTs and token-gated experiences to drive consumer engagement.
Supply Chain: WiPro deploys Falcon, a supply chain platform incubated by Shell and powered by Polygon PoS and Alchemy's account abstraction stack.
Auth: Fox Corporation released Verify, its product for content authentication allowing media companies to register content and grant usage rights to AI platforms.
TradFi: Franklin Templeton launched the Franklin OnChain U.S. Government Money Fund on Polygon, the first U.S.-registered mutual fund to use a public blockchain.
The development cycle shows developers build new products, which onboard more users, which then attract more builders to the web3 space.
1. Ideation & interest — Developer becomes interested in web3 and forms an idea of what to build 2. Local development — Developer installs libraries for web3 application building and local deployment 3. Testnet deploys — Developer connects to testnet blockchains through RPC nodes, gets testnet ETH and deploys on testnets 4. Mainnet deployments — Developer connects to mainnet blockchains, places Ethereum in wallet and deploys to mainnet 5. Scaling usage — Developer maintains and improves existing code base for growth
These 3 indicators show how devs are building, deploying, and scaling:
Students used Alchemy University to learn web3 basics including Javascript, Solidity, and EVM fundamentals.
Before launching projects on testnets or mainnet blockchains, devs build on their personal computers to test and iterate before shipping.
Total Ethereum SDK installs have consistently increased for the past 5 years:
Ethereum SDKs include ethers, web3, hardhat, truffle, foundry, eth, alchemy-sdk, viem, userops, and wagmi.
Weekly wallet SDK installs followed suit:
Wallet SDKs include Coinbase Wallet, Rainbow, Web3 Onboard, and Web3 Modal which developers use to connect consumers to the Ethereum blockchain, signaling more dapps added wallet support.
Developers deploy applications to testnets to refine their product on a blockchain that mirrors the mainnet environment without spending real ETH.
Continued evolution of Ethereum testnets shows:
Developers deploy tested applications to the mainnet when their product is ready to serve real users in a live environment.
EVM L2 contracts grew 303.42% Y/Y with:
L2 bridging up 138.15% Y/Y for Total Unique Bridgers from Ethereum Mainnet to Arbitrum, Optimism, Starknet, and zkSync L2s.
As web3 products attract real users and find product-market fit, developers need to scale their systems to support the increased consumer demand.
2023 Highlights:
2023 Highlights:
2023 Highlights:
2023 Highlights:
2023 Highlights:
2023 Highlights:
2023 was a big year for reshaping the industry in terms of tightening security, professionalizing services, and shipping new use cases.
FTX fallout: After the high-profile implosion of FTX in 2022, Sam Bankman-Fried was found guilty on seven federal counts and convicted on fraud and money laundering charges. The collapse cast a shadow over the Solana ecosystem for much of 2023.
Tokenization: Demand for onchain Real World Assets (RWAs) increased more than 4x in Q4 alone to over $5.6B in assets, while traditional finance institutions made big strides in tokenizing securities on private networks.
Crypto ETFs: Years of legal and regulatory work by industry leaders culminated in victories in 2023 that paved the way for the January 2024 approval of the first spot Bitcoin ETFs.
Smart account adoption saw major growth in the fourth quarter of 2023, surpassing 1 million total deployed accounts.
Monthly Active Accounts data tracked from March 2023 through November 2023.
Monthly Active Accounts classified by usage showed significant growth.
New vs Returning Monthly Active Accounts data tracked growth.
Cumulative Paymaster Volume (USD) reached this significant threshold.
Monthly UserOps showed substantial growth.
In Q4, the top three apps driving growth were:
Grindery — a popular self-custodial EVM smart wallet for Telegram, generated 35% of UserOps in December.
FanTV — a video streaming platform that rewards users with tokens for watching videos. In December, 18% of UserOps were driven by users claiming and transferring FanTV rewards.
CyberConnect — a web3 social network that allows developers to create social applications centered on digital identity and content ownership, generated 13% of UserOps in December.
NFT Volume by Year shows decline from previous year.
Unique Wallets that traded NFTs declined significantly.
NFT Volume by Chain shows market share shifts.
While traditional NFT volume and users were down across EVM chains, new forms of non-fungible tokens took the stage in 2023.
Bitcoin Ordinals: Ordinal Inscriptions were introduced in early 2023 with the Ordinal protocol and the BRC-20 token standard. By December 2023, more than 47M Ordinals were inscribed on Bitcoin by 263K users.
Inscriptions migrate: The resulting congestion on the Bitcoin network led creators to migrate across a number of chains, leading to similar challenges and dominating Q4 traffic for some.
Solana NFTs: In 2023, Solana snatched up 6% of NFT volume away from Ethereum. By the end of 2023, monthly sales volume of Solana NFTs surpassed Ethereum for the first time ever.
DeFi volume declined from the previous year.
DeFi Unique Active Wallets also decreased.
This report aims to provide an accurate and useful representation of web3 development.
The following sources were used for data collection purposes: Alchemy's data, Dune (verified smart contracts), npmjs.com (SDK installations and metadata), and Coingecko (token prices).
Sources:
This report is for informational purposes and does not constitute investment, legal, or tax advice. You should not put undue reliance on any statements of historical trends or interpret them as guarantees of future performance or results.
In addition to providing information based on internal sources, this report contains statistical data and estimates that are based on public information. You should not give undue weight to such data or estimates as they have not been verified.
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As indicated on the Alchemy website, there is a business relationship with certain chains including Ethereum, Polygon, Optimism, Arbitrum, Starknet, and Astar. However, this report is not intended to promote the token of any particular chain.
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