Hachathon Developer Trend - 2022

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Market activity in a sector has historically been preceded by an increased level of developer attention and hackathons provide a clear perspective of developer activity. For the last six months, the Social sector has accounted for the most hackathon submissions and is continuing to receive developer attention. This developer emphasis and publicity have helped boost engagement on existing Web3 social platforms like Lens.

Introduction

  • ​​Developer activity is a leading indicator of which application sectors and ecosystems are likely to receive future market attention.
  • Tracking developer activity, however, is far easier said than done. Github commits and social metrics are often easily manipulated and noisy as a result. Hackathons, on the other hand, incorporate a human judgment element, which leads to a higher signal perspective on developer activity.
  • Historically, the application sectors that have dominated hackathon submissions and awards have gone on to be leaders in market rallies.
  • In 2020, DeFi, with 25% of submissions, was the most represented sector at hackathons. By Q4 2020, the top DeFi protocols hit their all-time-high price measured in ETH terms. In the five months following DeFi’s dominance of hackathon submissions, the sector’s market cap continued to climb, hitting 185% growth over the period.
  • NFTs displayed a similar pattern of growth following a majority of hackathon submissions. In the first two quarters of 2021, NFT projects accounted for 27% of the submissions which was followed by an 8x increase in unique NFT the next quarter. Volumes similarly increased by nearly 17x in Q3 2021 compared to Q2.
  • Now, aided by significant sponsorship from Aave’s Lens protocol and others, social projects are the majority of hackathon submissions with nearly 36% of all submissions since March 2022.
  • Submitted social projects range from social media frontends and live-streaming platforms to niche features in the social stack.
  • The increased development activity within Web3 social has helped push Lens engagements up 110% from its second month of operation through its sixth (September 2022). Even more than overall submissions, social protocols have dominated the share of awards since April’s LFGrow hackathon. Receiving nearly 40% of the ETH Global hackathon awards since LFGrow, social projects have earned more than double the number of awards than the next most winning sector. The rise of social projects in hackathons continues to accelerate.
  • September’s ETH Online 2022 event saw social projects earn over 200 awards, which was the largest sector award count since the ETH Global hackathon awards have been recorded. Additionally, the 200 awards were nearly double the next largest sector’s last three events combined.
  • The projects winning awards are going on to have a meaningful impact on the sector’s adoption. For example, Lenster was a finalist and won the best frontend award at LFGrow. Since then, the frontend has grown to be one of the largest, go-to apps on top of Lens Protocol.
  • Successful hackathons have helped drive both usage and attention to the sector as a whole.
  • Each of the most recent ETHGlobal hackathons has preceded a boost in Lens Protocol’s daily engagement. In each event, social projects took home nearly half of all awards. Some of the top projects have included more social frontends, music NFTs, monetization features, and more.

ETHBogota Hackathon

  • ETHBogota, the most recent hackathon in October 2022, can help provide a sense of where developers’ attention is focused.
  • ETHBogota Hackathon Projects
    • Of the over 200 submissions, 12 projects were selected as finalists at ETHGlobal’s Bogota hackathon. Social was the largest sector represented among the finalists with four out of the 12 projects. DeFi and Infrastructure were the second most represented sectors with three projects each.
    • Many of the finalist projects aimed to either use new tools to address user experience pains in existing processes or introduce new features altogether. About a third of the finalists experimented with using social profiles, ENS, or Polygon ID as an identity solution for new features. Bringing credible identity on-chain opens up the design space for protocols to tackle features like undercollateralized lending and traditional social applications. Identity appears to be a key cornerstone of the next wave of applications and is a second-order benefit from the increased development in the social sector this year. However, to ensure reliable identity solutions, social networks must become sufficiently large to provide social consensus on identities.
    • User experience was also a key focus of many of the projects. A quarter of the finalists incorporated Push to send notifications to users from decentralized apps. Additionally, a few of the projects utilized SuperFluid for payment streams. Payment streams enable users to pay for services on a block-by-block basis, which brings the concept of subscriptions and future payment obligations on-chain. Since user experience has been such a bottleneck for the adoption of crypto, it is promising to see developers focusing on creating more familiar, approachable products.
    • The ETHBogota hackathon finalists have unique projects whose architecture and feature sets offer clues to how developers are thinking about products and the underlying services.

Hackathon Finalist Projects

  • Frens
    • To mitigate against the risk of solo staking, Frens enables users to combine capital into staking pools. Trusted operators, designated at pool creation, manage each pool’s stake and validator operations. The model is designed to give users staking options outside of centralized services and large staking providers, without the slashing risk that comes with technical validator management.
  • BlobScan Explorer
    • EIP-4844 introduces a data store field called “blobs” that is a new, larger memory storage transaction for Ethereum. The purpose of blobs is to benefit rollups by allowing them to store posted data at a much cheaper cost than the current alternative, calldata. However, given the new storage type, there doesn’t exist an easy way for users and developers to view the associated data. BlobScan is designed to be a simple explorer to navigate and visualize blob data.
  • Bet Streams
    • Bet Streams combines a live-streaming platform with a betting aspect where users can place bets on the outcome of live streams. For example, if a live stream is an eSports game, a viewer can wager on the result. The project plans to use Livepeer for video streaming and UMA to tokenize the outcome. Additionally, SuperFluid is used for streaming payments, which can also be token-gated. These tools will allow streamers to earn subscription revenue on a per-second viewed basis and for viewers to bet on the outcome of the stream.
  • ETHernal Reviews
    • ETHernal Reviews is a simple review project for application protocols where only users with protocol activity history can leave reviews. In the future, the project wants to mint reviews as NFTs to the addresses providing reviews so that users cannot hide them.
  • Pulp
    • Pulp is a DeFi project that aims to serve under-collateralized loans to users by leveraging Polygon ID to verify a ”Good Reputation” score. Normally, under-collateralized lending is difficult to do on-chain since you cannot inherently know the owner of an address. But, by bringing reputation scores on-chain, users can verify their ID and creditworthiness to receive more favorable loan terms. While the design still depends on a third party to designate the score of the address, Polygon ID makes the process viable on-chain.
  • Superseed
    • Dollar-cost average (DCA) purchasing involves regularly buying an asset over a period of time so that the purchaser can be volatility insensitive. Superseed is a DeFi protocol where users can set up DCA purchases of on-chain assets. Additionally, the idle deposits waiting for an upcoming purchase are routed into a yield-generating protocol like Aave to earn interest. On these interest profits, the project plans to enforce a minimum 2% Public Goods tax.
  • Coedia Network
    • Coedia Network is a developer community social network with a help-to-earn aspect. Users with an issue can post bounties for their development issue and other users who can help are directed rewards. Over time, users can build reputation scores around their address for how helpful or knowledgeable they are. Under the hood, Lens is used to facilitate user profiles and content, while IPFS/Filecoin is used to store content files.
  • Zipline
    • Bridging is notoriously dangerous due to the associated trust assumptions. However, rollups are an example of a chain-to-chain connection with minimal trust assumptions. With a similar architecture to optimistic rollups, Zipline, a bridging protocol, can be built to bridge funds from Ethereum to another EVM chain. An off-chain relayer is used to send finalized blocks from Ethereum to the destination EVM chain. The relayer’s execution can be verified by executing a proof so it can be checked by anyone within the challenge period.
  • Anonymous Vickery Auctions on Chain
    • Vickery auctions require participants to place bids without knowing the value of the bids of others. As usual, the highest bidder wins, but the price paid is the second-highest price. The design is meant to incentivize participants to bid what they believe to be the true value. The project aims to bring this auction style on-chain with users sending funds to an address that is later used in the reveal phase to deploy a contract with the bid amount. This auction style could then be used to accurately price NFTs.
  • diZKreet
    • To make NFT purchases completely private, disKreet implements a custom ZK Shielding bridge using Aztec’s ZK rollup. NFTs themselves would live on the Layer-1, while the transfer and purchasing of NFTs would be conducted on the ZK rollup. This architecture enables the Layer-1 to know that an NFT was purchased but not know who purchased it (until the new owner wants to redeem the NFT on L1).
  • ClubSpace
    • ClubSpace allows music NFT curators to host a live listening space for their followers. Participants can then see each other’s avatars and send reactions while listening to the live stream together. Additionally, attendees will be able to mint an NFT proving they were at the event if they provide a ZK proof. ClubSpace is using Semaphore for the ZK poofs and Spinamp to power the music NFT playlist. Then, Lens serves the base role of providing user profiles and content posting.
  • txn.xyz
    • By creating a dedicated page for signing on-chain transactions, txn.xyz hopes to improve both the user and developer experience of transactions. The details of a transaction are URL-encoded, which allows a transaction to be initiated from another app or even the command line. Additionally, by conducting transaction execution on another page, other frontends don’t have to slow down page loads by importing an ethers.js package.

Wrapping Up

  • Market activity in a sector has historically been preceded by an increased level of developer attention and hackathons provide a clear perspective of developer activity. Both DeFi and NFTs before their respective bull markets accounted for a majority of hackathon submissions.
  • For the last six months, the Social sector has accounted for the most hackathon submissions and is continuing to receive developer attention. This developer emphasis and publicity have helped boost engagement on existing Web3 social platforms like Lens.
  • The most recent hackathon submissions continue to be mostly projects in the social sector. Additionally, projects have been focused on solving user experience headaches and introducing new features. Many of the proposed features involve some level of user identity; This is one of the key features of social which is foundational in many downstream applications.
  • However, admittedly, the current Web3 social frontends and feature sets are skeuomorphic in that they closely resemble their Web2 counterparts. Identity and smooth user experience are the norm in traditional consumer applications. Web3 consumer products appear to be in the stage of establishing the basic foundations before more native features are introduced. Given the developer velocity, it is presumable that the social sector establishes an adequate user experience in the next year, at which point native Web3 feature sets can flourish.