October 5, 2022

Can Ethereum lose its Defi supremacy? JPMorgan believes so

2 min read

JP Morgan

The pro-crypto Wall Street giant, JPMorgan took a rather surprising stance against the controling blockchain, Ethereum and its coin, Ether ($ETH). JPMorgan highlighted that Ethereum is already losing its rank in the Defi sphere to the up and coming rivals, and may lose further if it does not escalate the time taken for scalability upgrades.

According to Bloomberg, JPMorgan noted that due to the late launch of the Sharding feature, which is “most crucial” development for scaling the Ethereum network, it is possible that by the time Ethereum catches up to speed it would have currently lost its supremacy.

“In other words, Ethereum is currently in an extreme race to maintain its supremacy in the application space with the outcome of that race far from given, in our viewpoint”

Bi-fold reason to Ethereum losing Defi dominance

It is evident that there are two main factors because of which Ethereum might possibly lose its dominance in the Defi sphere. Very first – – the scalability issue and 2nd would be an increased number of rivals with independent blockchains.

Currently, blockchains procedure deals one after the other. However, with Ethereum’s Sharding feature – – a scalability performance in ETH 2.0, parallel processing will become possible, keeping Ethereum’s superiority. But, this upgrade is far from application, anticipated to show up in 2023 although, Ethereum has actually already fell from its 100 percent market share in Defi, to a mere 70 percent, and is predicted to fall even more if it does not prepone the Sharding function implementation.

Bloomberg quoted the note from analysts led by Nikolaos Panigirtzoglou that mentioned “optimistic view about Ethereum’s supremacy is at danger”…… Scaling, “which is essential for the Ethereum network to preserve its supremacy, may get here too late.”

Panigirtzoglou included that another “rather problematic” hazard to Ethereum are market rivals with independent blockchains. These competitors are creating more available and less expensive innovations on their separate blockchains, rather of counting on Ethereum’s Layer 1 network for their security. In lieu of these concerns, Ethereum needs to ideally push forward its ETH 2.0 launch to reclaim its throne.

The post Can Ethereum lose its Defi supremacy? JPMorgan thinks so appeared initially on CoinGape.