JPMorgan has explained that Ethereum can lose DeFI dominance due to scaling issues. The managing director of the firm has stressed that new smart contracts enabled blockchains are attracting more market share than Ethereum-based solutions.
Ethereum blockchain was the first one to introduce DeFI and smart contracts. These new features attracted a lot of investment from the investors. The increasing traffic and transactions on the blockchain have created a lot of issues for the network. This has already been stated by many people and developers are working hard to manage these issues. The managing director of JPMorgan has expressed his thoughts on Ethereum.
Ethereum can lose DeFi dominance:
Nikolaos Panigirtzoglou, managing director of global market strategy at JPMorgan, has said that Ethereum can lose DeFi dominance due to the scaling issues. He further elaborated:
Which is necessary for the Ethereum network to maintain its dominance, might arrive too late.
Panigirtzoglou further explains that what’s more problematic is the fact that Ethereum has lost part of its influence in the defi arena to other chains, instead of to its L2 scaling solutions. Solana, Avalanche, BSC, and Terra, a group of smart contracts-enabled cryptocurrencies and networks known as “ethereum killers,” have been gaining market share and creating a community behind them.
Ethereum has centered its roadmap around L2 solutions. Layer 2 focuses on the rise of rollups and supports sidechains to try to find an alternative to reduce transaction fees. But the L2 might not be sufficient for the network due to which Ethereum can lose DeFI dominance.
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