According to a JPMorgan analysis. The Ethereum’s supremacy in the field of decentralized finance may continue to erode in the coming year. The report, published by Nikolaos. That’s, managing director of global markets strategy. Of course, claims that Ethereum’s dominance is in jeopardy owing to scaling issues.
The message went on to say that scaling:
“Which is necessary for the Ethereum network to maintain its dominance, might arrive too late.”
Ethereum has focused on an L2 (Layer 2)-centric roadmap, which encourages the use of rollups. Then, and sidechains as alternatives to the high fees and intense activity on its Layer 1 blockchain. Despite this strategy, the percentage of defi domination. Which was believed to be about 100% at the beginning of last year. Then, has now reduced to an estimated 70% of the market.
What’s more concerning, according to Panigirtzoglou, is that Ethereum has lost some of its leverage in the defi arena to other chains, rather than to its own L2 scaling solutions. A collection of smart contracts-enabled cryptocurrencies and networks known as “ethereum killers,” Solana, Avalanche, BSC, and Terra, have been gaining market share and building a community around them.
The price of their native tokens has also risen as a result of this. While Ethereum’s network asset, ether (ETH), increased in price, each of the aforementioned tokens outperformed ETH in the previous year.
After the merger, which will shift the proof-of-work (PoW) consensus to a more energy-friendly proof-of-stake (PoS) consensus.
Sharding, which is the approach Ethereum will use to scale in its L1 blockchain, won’t arrive until next year.
The note ended with these words:
“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.”
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