A few weeks in, we’re now in a position to start analyzing the effect of one of the most dramatic sanctions in recent memory – the Russian SWIFT ban.

More importantly, we’re starting to see how that ban has impacted the crypto world.

But while early hot-takes predicted one thing, the reality is shaping up to be slightly different, with some surprising lessons for crypto investors moving forward.

To get a better grasp on the issue, we’ve broken down the topic into smaller questions:

• What is the SWIFT ban, and is crypto a potential substitute financially?
• What are the current economic impacts of the ban?
• How has the crypto world responded, and what does that say moving forward?

Let’s get to it.

What is SWIFT? Can crypto bypass the ban?

You have money in an account in Bank A. You need it to be in an account in Bank B.

Prior to 1973, when you initiated a transfer, banks would use the TELEX system to describe each transaction, in detail, using sentences.

As expected, TELEX was a bit slow.

In 1973, SWIFT – The Society for Worldwide Interbank Financial Telecommunication – replaced the TELEX sentence structure with a code-based system. SWIFT dramatically increased the speed and efficiency of inter-bank transfers, and eventually became the standard system used by banks the world over.

It’s hard to overstate just how expansive the SWIFT system is; it’s currently employed in well over 200 countries, and processes over 5 billion transactions per year. SWIFT isn’t the only system out there – China has a native version, as do other countries  – but it is the industry leader by a wide margin.

The Western-led ban prevented Russian banks from accessing the SWIFT network.

Inter-bank transfers became harder and more expensive, prompting all the hot takes on how Russia could or should turn to crypto networks as a workaround.

But how viable is that solution really?

Could Russia rely on crypto networks instead of SWIFT?

We’re not the only ones asking that question.

It hasn’t gone unnoticed that centralised finance worked together to cripple Russia’s monetary system, and that’s got people wondering about over-reliance on PayPal, SWIFT, Visa, Mastercard, and others.

But even without getting too deep into “CeFi vs. DeFi,” it’s one thing to argue against SWIFT et al. It’s entirely another to actually replace those institutions with crypto.

One of the best breakdowns so far comes by way of XRP and Ripple. Here’s some key takeaways from Asheesh Birla, GM of RippleNet:

• Russia averages $50 billion in foreign exchange daily
• BTC – the largest crypto network – averages between $20-$50 billion daily liquidity
• Transfer limits for the ruble on major exchanges are quite low: Coinbase allows a $200k max transfer from RUB/BTC, compared to $3.7 million BTC/USD.

The SWIFT ban highlights the continuing gap between crypto and tradfi in terms of volume. Could Russia use crypto networks as a partial workaround?

Sure, in theory. As a complete substitute? Not currently possible.

It’s also worth noting that Russia’s approach to crypto has previously been…complicated. Crypto payments aren’t entirely legal, and current legislation pending in Russia’s government makes it expressly illegal.

Switching from SWIFT to a crypto-centric system, especially if done so quickly, would require some major regulatory gymnastics.

With all that being said, there are three main current economic impacts:

1. Short-term Russian financial crisis

At this point, the outcome of the SWIFT ban and accompanying sanctions have been little short of devastating for Russia. The Russian stock market fell 39% on the day of sanctions, recovered slightly, and then promptly closed (and has more-or-less stayed closed ever since).

The ruble dived; at time of writing, it was down over 40% against the dollar. Adding in the difficulty of accessing foreign currency reserves (because of the SWIFT ban), and the Russian economy is in shambles.

^xe.com

2. Crypto gets caught up in sanctions

What about using crypto payments to get around the ban?

There’s a real question about how much demand there has been for crypto in light of the ban, and we’ll come back to that later.

What’s become abundantly clear is that Western governments and financial institutions expect the crypto ecosystem to enforce the ban on their behalf.

It’s the old, “clean up your own house, or we’ll do it for you” message. That’s why you get ominous press releases like this one from the EU, saying that crypto payments are “clearly” in the realm of sanctions.

3. Increasing inflationary pressure

Check out just a few commodities prices affected by the war, and you’ll see what we mean; here’s a combined chart showing crude oil prices alongside wheat prices.

Russia supplies much of Europe’s oil and natural gas, while Ukraine is a wheat powerhouse, exporting grain all around the world. Russia also exports wheat, and worldwide exports were estimated to drop by 7 million tonnes between the two countries.

^{tradingeconomics.com}

The result of those increased prices is further inflationary pressure around the world.

Those are some of the short-term impacts. But what does the SWIFT ban have to say about the broader crypto ecosystem?

The SWIFT ban highlights crypto’s reliance on traditional finance:

Not the best hedge

Let’s touch on the inflation point again:

US inflation hit 7.9% in February, the highest in years. Most of that was before the Russian invasion got fully off the ground, meaning there’s worse to come when the March data comes out.

^{tradingeconomics.com}

Crypto is meant to act as an inflationary hedge – at least, that’s how the typical crypto head will talk about it.

But does the data back that up?

Let’s start with Bitcoin. Global turmoil, the potential to bypass SWIFT restrictions, and increasing fiat inflation are all factors that should drive BTC higher.

And yet, here’s BTC over the past month: essentially flat.

^{coinmarketcap.com}

Ethereum? Down slightly. Solana? Down a bit more.

It gets even……

The takeaway?

Crypto might be a great hedge against inflation on the individual level, but most people don’t seem to be treating it that way. With trading volumes more or less steady and prices flat or declining, crypto isn’t responding to turmoil as we might have expected.

And that’s despite the fact that the current situation seems tailor-made to see if crypto can replace tradfi on a large scale. Russia hasn’t really even tried to use crypto to bypass the ban, and individuals largely seem to be following suit. Western investors aren’t fleeing crypto, but neither are they pouring money into it.

The upshot? Most ordinary crypto users don’t seem to be treating crypto as an inflationary hedge.

In fact, there’s even more to it than that:

With crypto markets down slightly since the beginning of the war in Ukraine, and without a mad rush to pour money into crypto as a hedge against inflation, one conclusion is becoming more and more clear.

Like traditional finance, crypto likes stability

There’s a lot of talk about crypto as the great disruptor. DeFi will grow bigger and bigger, eventually turning institutional finance obsolete. Cryptocurrencies will become dominant, largely replacing fiat currencies. This is a whole new world, powered by the immense potential of crypto.

Instead, what we’re seeing is a new and improved system that operates in many ways very similarly to the old one. Investors prefer a stable trading environment, and governments expect compliance with their rules.

That’s probably the clearest outcome of the SWIFT ban: making clear to all that the crypto world is still largely centralised.

The crypto ecosystem is still dependent on tradfi as an on/off ramp. The two systems are joined at the hip.

Banning access to one system (the SWIFT ban) doesn’t result in huge demand for the other. They work together, not as opposites.

This will come as no surprise to anybody familiar with the crypto space…

…but the solidity developer salary has EXPLODED over the past 12 months.

And to be fair:

You could run a generic “[insert crypto-related buzzword] EXPLODED in 2021″ headline for any number of articles, and you wouldn’t be wrong.

NFTs, the Solana blockchain, Layer 1 altchains in general, DAOs, the list goes on. All of those areas did see dramatic growth and success over the course of the year, and most of them seem set to continue into 2022.

But we have a very unique insight into the Web3 space at Plexus: because we help scale and grow Web3, crypto and blockchain companies. Every. Single. Day.

We’re able to spot hiring and growth trends early on and provide actionable insight on it. Like this article we published chronicling the noticeable uptick in the use of the Rust programming language, seen in the rise in demand (and pay!) for Rust programmers.

Companies like Voltz, Blockswap, Enso Finance, Dapper Labs, Spectral Finance and Stader Labs have had huge pushes for solidity developers recently. Solidity is following a familiar hiring pattern that a lot of other languages have, and we wanted to find out why.

(On a side note: We recently released a State of Crypto Hiring Report which talks about salaries, in-demand skills and the growth of solidity, rust & NFTs; you can download that here.)

In this article you’ll find out why the solidity developer salary has exploded over the past 12 months.

Let’s get into it:

Solidity has had a slow, but steady rise in popularity.

You can see small upticks going back into the final quarter of 2020, but the real jump hits in April 2021 and continues for most of the year.

There’s an obvious winter lull in the pattern – notice December’s equally low numbers for both years. That’s more an artifact of seasonal hiring patterns than anything else. Anecdotally, we’re seeing a continued demand for solidity devs into 2022.

Take a broader look, and the same pattern appears elsewhere.

Google Trends shows roughly corresponding trends in search patterns for solidity-related keywords.

Here’s the chart for “solidity developer”:

Same thing for “solidity developer jobs” (you can also see solidity developer jobs here)

And again for “solidity developer salary”:

Search volume differs, but the broad pattern is the same – there was a spike back in 2017/2018, then interest appears to have fallen off, only to rebound in recent months and jump to new levels.

This increased search volume has had a direct and clear impact:

The ceiling of solidity salaries is much higher.

We’ll dig a bit more into the “why” of these trends shortly. One of them, at least, is easy to explain:

Increased searches for “solidity developer salary” can be at least partially attributed to an increase in those salaries.

In other words: follow the money!

^{itjobswatch.co.uk}

According to itjobswatch.co.uk, the median compensation for solidity devs is just north of £80,000 per year (that’s a hair under $110k USD).

Those figures are roughly in line with our own info.

^{Data taken from the State of Crypto Hiring Report 2022}

In fact, it correlates nearly exactly with what we’re seeing with junior-level developers. In 2021, those salaries ranged between 70k-110k, up 3% from the previous year.

(It’s worth remembering that the first chart shows a median, not an average, meaning there are an equal weight of salaries above and below that $110k line).

Our data backs that up as well:

The solidity developers with the biggest gains in 2021 weren’t the junior-level devs, but senior and principal developers. Those groups saw increases of 6% and 13%, respectively.

That’s a crazy percentage increase for just one year.

The average salary increase for junior solidity devs hasn’t kept pace with senior and principal for a couple of reasons:

1. Junior developers are so eager to start their journey in crypto, that they’re willing to take less to get their foot in the door (the crypto space is very, very enticing right now).
2. Start-ups are a huge percentage of the companies coming out of the crypto space right now, and they’re less likely to hire juniors (although this trend is beginning to change).

Here’s one final look at the data:

^{itjobswatch.co.uk}

The chart is in GBP; notice the number of jobs above the 80k median. The range goes up to £170k per year, typically for principal developers.

Salaries aren’t the only thing that have increased, although:

There’s WAY more opportunities too.

The increase in pay is no mystery; there’s more demand – and more opportunities – for experienced developers than ever.

We looked at our internal data, and the number of job postings requiring solidity experience increased 8% in 2021, to nearly a quarter of all postings (you can see that report here).

Again, other data confirms this:

For the six-month period that ended in February, 2021 saw 17 permanent jobs citing solidity. For the same period in 2020, there were 9 jobs.

In 2022, that six-month period saw 149 jobs, over 9 times the previous period. In the UK alone, jobs that cited solidity experience increased dramatically as a percentage of all available jobs.

On LinkedIn you’ll find thousands of jobs that require solidity experience. A little digging shows that many of those jobs have only a handful of applicants, at least through LinkedIn’s in-house application system.

Which is why passive candidates are so crucial to engage with.

Solidity salaries have seen a big increase, no doubt. But you can go one step further:

Concentrated skill sets is where the real money is.

With ever-growing number of jobs and a fairly well-developed learning base (more on that shortly), it’s a bit surprising that there aren’t more solidity devs around.

Two factors seem to be playing a role here:

First, solidity is young. It only debuted under a decade ago, hardly enough time to develop (pun intended) an expansive base of users and programmers. Plus, like Ethereum itself, solidity isn’t the only game in town. Young, up-and-coming programmers might be tempted to focus on other languages with booming Web3 applications, such as Rust.

Second, the Web3 space as a whole is short on devs. A recent developer report from Electric Capital highlighted the discrepancy; there are over 2500 developers in the Web3 space. Of those, fewer than half – around 1000 developers – control projects with over $100 billion in total value locked (TVL).

That concentration indicates the sheer amount of money flowing into key projects, and the corresponding demand for developers with advanced skills in smart contract languages.

It also puts some of the compensation into perspective.

One detail will ensure the stable growth of solidity:

The well-established learning curve is a HUGE factor.

One of solidity’s strengths lies in a well-established learning curve.

Would-be programmers can start with the main solidity site, reinforced by further resources at the solidity GitHub. The solidity learning economy includes sites like CryptoZombies.io, where programmers build crypto games while learning the language. Beyond simple gamification, this allows developers to practice using smart contracts in a real-world use case – i.e., crypto gaming.

In short, there’s an easy on-ramp for the language that powers much of the smart-contract world.

That’s a pretty solid point in solidity’s favour.

This easy on-ramp means sustained growth and adoption of the language itself – but how will this impact salaries?

Short answer: They’ll level out.

We won’t be seeing the big 6% & 13% increases year-on-year increases that we have over the past 12 months. That type of growth simply is unsustainable.

Which is what makes this current Web3 market so appealing to developers.

Although, there are many branches of the Web3 space that developers will be able to specialise in:

Smart contracts use cases are almost infinite.

Ethereum smart contracts power the DeFi world, and as more and more projects enter that space, demand for experienced solidity devs goes up. Solidity smart contracts are also deployable on the Ethereum Virtual Machine, covering the entire Ethereum ecosystem.

Because solidity is the language of EVM-based smart contracts, use cases are as broad as smart contracts themselves. That’s more than just DeFi – crypto games and the whole broad world of Web3 all rely on smart contracts.

Unless EVM-based DeFi projects fade considerably, there doesn’t seem to be much chance that solidity will fall off anytime soon.

There’s an incredibly active community behind the language, with regular updates and releases every few weeks to correct flaws and improve usability.

Solidity is a high-level language, using letters and numbers rather than a simple binary code. While this can complicate security, it also makes the language easier to understand and work with.

Of course, there’s another big reason to feel bullish about solidity – especially if you’re already skilled with the language:

Developers can deploy smart contracts to generate tokens.

Solidity’s appeal is more than just “it works on Ethereum.”

As a high-level, project-oriented programming language, solidity brings a number of benefits to the table. It’s a more recent language, but one that shares similarities with a number of older languages, including Javascript.

Using solidity, developers can deploy smart contracts to generate tokens, making it ideal for projects with native tokens. And of course, the use of the EVM positions solidity as an integral part of the emerging world of smart contracts.

With more solidity jobs available, and higher pay at those jobs, solidity devs are in a good position going forward.

I love helping teams grow, and this is an exciting time for us all to work in the Web3 space.

William Hogan
Hello! I specialise in scaling web3-native projects. I love hearing what you’re building and I keep an ear close to the ground. If you have an interesting project, I’ll have an engineer for you…let’s chat! Here’s my LinkedIn, telegram wogan.eth and email.