Wednesday, May 29, 2024

Ethereum At Risk Of Losing DeFi Dominance: JP Morgan

Ethereum is at risk of losing dominance to its competitors in the decentralized finance space, says JP Morgan. It believes ethereum’s upgrade is taking way too long and as such, its rivals will take the lead. But investors are keen on the blockchain’s upgrade as it will reduce congestion and costs.

JP Morgan analysts, in a note, said ethereum’s shift from proof of work to proof of stake in mid-2022 will pull more investors to the network and ether. Nikolaos Panigirtzoglou, the lead analyst, pointed out that sharding, which is one of the key stages in ethereum 2.0 upgrade, will take place in 2023. He said this will prove to be a golden opportunity for other networks to steer way ahead.

Though scaling of the ethereum is necessary, it will negatively affect the network’s dominance. The analysts noted that ethereum lost footing in the DeFi market share. And this is being echoed in the falling DeFi share – relative valuation of ethereum against its competitors.

The Binance Smart Chain (BSC), Solana, Terra, Avalanche, Tron and Fantom are advancing. JP Morgan believes funding and incentives have given them a boost. The investment bank says ethereum risks losing market dominance to these networks. This is because by 2023 when ethereum implements Sharding, the competitors would have grown significantly. JP Morgan sees ethereum in a very tough race to maintain its dominance in the blockchain space.

Vitalik Buterin, the co-founder of Ethereum, highlighted this week that they have made a 50% transition towards the new version of the blockchain.

Cryptured Team
Cryptured Team
The writers team at Cryptured.com is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.
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