Ethereum DeFi Dominance Not a Given
2 min read

Ethereum DeFi Dominance Not a Given: JPMorgan

By News Desk

While the majority of decentralized finance (DeFi) is still happening on Ethereum, banking giant JPMorgan says this might not be a permanent thing.

In a note to Bloomberg, JPMorgan analysts led by ​​Nikolaos Panigirtzoglou say that Ethereum’s DeFi dominance is at risk of being further eroded as more competitors start to enter the space.

According to the analysts, Ethereum’s Sharding process will be the “most critical” development for scaling its network. Until its completed, the bank says Ethereum will remain vulnerable to its rivals.

The “optimistic view about Ethereum’s dominance is at risk,” Panigirtzoglou wrote. Scaling, “which is necessary for the Ethereum network to maintain its dominance, might arrive too late.”

The analysts also point out Etheruem’s waning dominance in total value locked (TVL) within DeFi platforms.

relates to Ethereum’s Dominance in DeFi Is ‘Far From Given,’ JPMorgan Says

JPMorgan/Bloomberg

Panigirtzoglou adds that a “rather problematic” aspect of Ethereum’s situation is that it’s losing market share mostly to independent blockchains, rather than those that rely on the Ethereum network for their security.

JPMorgan said that the chains gaining the most of Ethereum’s market share are Terra (LUNA), Binance Smart Chain (BSC), Avalance (AVAX) and Solana (SOL), which have all been receiving large amounts of funding and using incentives to boost their usage.

“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 given, in our opinion,” according to the note.

The future of Ethereum’s dominance over DeFi is debated, but currently, the bank’s theory is being supported by price performance of other layer-1 chains.

Last month, Arcane Research released a list of predictions for 2022, which included layer-1 Ethereum competitors continuing to outperform ETH throughout the year.

“We expect this trend to continue in the upcoming year as these other smart contract platforms continue to steal market share from Ethereum in terms of users and the amount of funds stored on the network. These networks have thriving and fast-growing ecosystems that continuously drive the price performances of their native tokens.”

Arcane Research

Newsletter Inline

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

Related Posts

FTX Exchange
Withdrawals not Halted at FTX: Instead Binance will Buy FTX
FTX Exchange

Withdrawals not Halted at FTX: Instead Binance will Buy FTX

November 9th, 2022 3 min read
OKX invests in WAX
OKX Blockdream Ventures Invests Millions in GameFi and NFT Development on WAX
OKX invests in WAX

OKX Blockdream Ventures Invests Millions in GameFi and NFT Development on WAX

June 3, 2022 2 min read
Binance partners with the weekend
Binance Partners with The Weekend to Provide First-Ever Web 3 Enhanced World Tour
Binance partners with the weekend

Binance Partners with The Weekend to Provide First-Ever Web 3 Enhanced World Tour

June 3, 2022 2 min read
21Shares Releases Sixth State of Crypto Report
21Shares Releases Sixth State of Crypto Report: Summary
21Shares Releases Sixth State of Crypto Report

21Shares Releases Sixth State of Crypto Report: Summary

June 2, 2022 3 min read
Algorand and MakerX Commit 1M Algo to Migrate Terra Users to Algorand
Algorand and MakerX Commit 1M Algo to Migrate Terra Users to Algorand
Algorand and MakerX Commit 1M Algo to Migrate Terra Users to Algorand

Algorand and MakerX Commit 1M Algo to Migrate Terra Users to Algorand

June 2, 2022 2 min read
Regulators are “Not Allowing” Banks to Engage with Crypto
Bank of America CEO: Regulators are “Not Allowing” Banks to Engage with Crypto
Regulators are “Not Allowing” Banks to Engage with Crypto

Bank of America CEO: Regulators are “Not Allowing” Banks to Engage with Crypto

June 1, 2022 2 min read
US Conference of Mayors Introduces Blockchain Resolution
US Conference of Mayors Introduces Blockchain Resolution
US Conference of Mayors Introduces Blockchain Resolution

US Conference of Mayors Introduces Blockchain Resolution

June 1, 2022 2 min read