Analysts at JP Morgan, the multinational investment bank giant, pointed out that Ethereum is gradually losing its grip on the Decentralized Finance (DeFi) ecosystem. The comment was endorsed by managing director Nikolaos Panigirtzoglou, one of the bank's top names.
According to JP Morgan's analysis, many Cryptocurrency protocols such as Terra, Avalanche and Solana have emerged as strong competitors over the past year and Ethereum's supremacy is in danger of diminishing further as 2022 progresses.
Quoting Nikolaos Panigirtzoglou and other analysts at JPMorgan Chase & Co., Bloomberg reported that Ethereum is currently responsible for almost 65% of DeFi's market share, however, the protocol is gradually losing its dominance in the sector, which in early 2021, for example, was almost 100%.
Experts commented that the Ethereum will only have a new lease of life when the final phase of Sharding (the “most critical” development for the dimensioning of the ETH network) is completed, which is scheduled for 2023. Until then, projects such as Terra, Binance Smart Chain , Avalanche and Solana could make life even more difficult for Ethereum as the others have received large amounts of funding and public attention.
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 certain, in our opinion,” the JPMorgan analysts stated.
Ether, Ethereum's token and second-largest cryptocurrency by market capitalization, closed 2021 with a price increase of nearly 220%. However, experts argued that the value of the US dollar could suffer in the near term due to the network's weakened supremacy in the DeFi sector.
