JPMorgan Chase report points out that Ethereum may lose Defi’s dominance due to expansion issues – Bitcoin News

A report by JPMorgan Chase pointed out that Ethereum may face the risk of losing its absolute advantage due to the inability to quickly produce effective scaling solutions. The report was written by Nikolaos Panigirtzoglou, managing director of the company’s global market strategy, and further pointed out that other new blockchains supporting smart contracts are occupying this market share, rather than Ethereum side chains or other solutions based on Ethereum.

According to JPMorgan Chase, the dominance of Ethereum is in danger

JPMorgan’s note state In the coming year, Ethereum may continue to lose its dominant position in the field of decentralized finance. The report was written by Nikolaos Panigirtzoglou, managing director of global market strategy at JPMorgan Chase, stating that this dominance is at risk due to Ethereum’s problems in expanding its network.

At this point, the description states that zoom:

What is necessary for the Ethereum network to maintain its dominance may come too late.

Ethereum is centered on the L2 (layer 2)-centered roadmap, which supports aggregation and the rise of side chains in an attempt to find ways to replace the intensive activities and high fees that occur on its layer 1 blockchain . Even with this strategy, the percentage of defi dominance that was estimated to be almost 100% at the beginning of last year has now fallen to an estimated 70% of the market.

The rise of new challengers

Panigirtzoglou further explained that what is more problematic is that part of Ethereum’s influence in the defined field has been replaced by other chains instead of its own L2 scaling solution. Solana, avalanche, BSC and Earth, A group of cryptocurrencies and networks that support smart contracts called “Ethereum Killers” have been gaining market share and creating a community behind them.

This has also led to an increase in the price of their respective native tokens. Although Ethereum has also managed to increase the price of its network assets, Ethereum (Ethereum), each of the above tokens exceeds EthereumLast year’s performance. Sharding is a strategy that Ethereum will use to expand in its L1 blockchain. It will not appear until after the merger next year. This will change the proof of work (PoW) consensus to a more energy-efficient proof of equity (PoS). )consensus.

The note concludes:

In other words, in our opinion, Ethereum is currently in a fierce competition to maintain its dominance in the application field, and the outcome of this competition is far from certain.

What do you think of JPMorgan Chase’s view on Ethereum and its possible future in defi? Tell us in the comments section below.

Sergio Goshenko

Sergio is a cryptocurrency journalist based in Venezuela. He described himself late and entered the crypto space when prices rose in December 2017. With a background in computer engineering, living in Venezuela, and being affected by the cryptocurrency boom at the social level, he offers a different perspective on the success of cryptography and how it can help people without bank accounts and underserved people.

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