JPMorgan Report States Ethereum Might Lose Defi Dominance Due to Scaling Issues – Bitcoin News

A note from JPMorgan states that Ethereum may be at risk of losing control of the challenge due to its inability to quickly produce effective expansion solutions. The memo, written by Nikolaos Panigirzoglu, managing director of global markets strategy at the company, said that other new blockchains that enable smart contracts are those that are taking this market share, rather than Ethereum sidechains or other Ethereum-based solutions.

Ethereum dominates the stake according to JPMorgan

A note from JPMorgan states that Ethereum may continue to lose its dominance in the decentralized finance space in the coming year. The memo, written by Nikolaos Panegirzoglu, managing director of global markets strategy at JPMorgan, notes that this dominance is at risk due to the problems Ethereum has had in expanding its network.

In this regard, the note states that the analogy:

Which is essential for the Ethereum network to maintain its dominance, may arrive too late.

Ethereum has focused on its L2 (layer 2)-focused L2 (Layer 2) roadmap, which supports the emergence of backlogs and sidechains to try to find alternatives to the intense activity and high fees that are occurring on the Layer 1 blockchain. Even with this strategy, the percentage of dominance, which was estimated at 100% at the beginning of last year, has fallen to an estimated 70% of the market today.

The emergence of new competitors

Panigirtzoglou further explains that what is more problematic is the fact that Ethereum has lost part of its challenger influence to other chains, rather than its own L2 scaling solutions. Solana, Avalanche, BSC, and Terra, a group of cryptocurrencies that enable smart contracts and networks known as the “Ethereum killer,” are gaining market share and creating a community that supports them.

This also increased the prices of their original tokens. While Ethereum has also managed to increase the price of its network asset, ether (ETH), each of the mentioned tokens has outperformed ETH last year. Sharding, the strategy that Ethereum will use to expand into the L1 blockchain, will not arrive until next year after the merger, which will change the Proof of Work (PoW) consensus into a more energy-friendly one. Share consensus (PoS).

The note concluded:

In other words, Ethereum is currently in an intense race to maintain its dominance in the application space with the outcome of that race far from meaningless, in our opinion.

What do you think JPMorgan thinks of Ethereum and its potential future in the face of the challenge? Tell us in the comments section below.

sergio@bitcoin.com

Sergio Goshchenko

Sergio is a cryptocurrency journalist based in Venezuela. Describing himself as a latecomer, he entered the crypto space when the price spike occurred during December 2017. Because he has a background in computer engineering, lives in Venezuela, and is influenced by the crypto boom on a social level, he offers a different perspective on the success of crypto and how it helps people who They do not deal with banks and the disadvantaged.

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