Developer activity on Ethereum L2s has grown 47% year-over-year despite the bear market, according to Electric Capital’s Q1 2025 report.

• Over 3,200 monthly active developers now contribute to Base, Arbitrum, and Optimism combined. The share of projects building cross-chain infrastructure rose from 12% to 21% in 12 months.

• Bear markets historically concentrate talent. In 2023-2024, seed-stage funding for Web3 infrastructure doubled relative to DeFi and NFTs. Teams are prioritizing modular blockchains and account abstraction over speculative front-ends.

• Real utility emerges when latency drops and UX improves. Current median block times on L2s are under 1 second. Account abstraction wallets now process 600,000 monthly active users on Ethereum. These numbers were negligible two years ago.

• Infrastructure builders are earning revenue through gas fee rebates and sequencer profits, not token inflation. This shift suggests a maturing economic model.

The quietest building periods produce the most durable networks. Today's low-engagement environment is where the next cycle's foundations are set.

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