Crypto venture fund giant Andreessen Horowitz (a16z) has highlighted that development and demand on Ethereum is “unmatched” despite the network’s high transaction fees.

The firm does warn, however, that its “popularity is also a double-edged sword” given Ethereum prioritizes decentralization over scaling, resulting in competing blockchains stealing market share with “promises of better performance and lower fees.”

The comments came via a blog post introducing a16z’s 2022 “State of Crypto” report, with the firm’s data scientist Daren Matsuoka, head of protocol design and engineering Eddy Lazzarin, General Partner Chris Dixon, and head of content Robert Hackett all working together to provide five key takeaways from the study.

Outside of Ethereum, the report focuses on topics such as Web3 development, crypto adoption rates, decentralized finance (DeFi) and stablecoins.

Introducing a16z’s 2022 State of Crypto Report A lot has changed since we started investing in crypto nearly a decade ago. Here are 5 key takeaways from the a16z crypto web3 industry survey and data analysis by @darenmatsuoka, @eddylazzarin, @cdixon & @rhhackett ⬇️ pic.twitter.com/JFLXbNh03u

According to data from the report, Ethereum towers over the competition in terms of builder interest, as the network has around 4,000 active monthly developers compared to second-ranked Solana (SOL) at 1,000. Bitcoin (BTC) and Cardano (ADA) are next in line at roughly 500 and 400 apiece.

The analysts noted that “Ethereum’s lead has much to do with its early start, and, the health of its community” but emphasized the significance of development continuing to surge on the network despite high transaction costs:

The demand for Ethereum can also be seen across the report’s