Could Ethereum lose its dominance in the Defi market?
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Answer Could Ethereum lose its dominance in the Defi market?
The momentum around Ethereum increased and its brightness increased with the increase in the pace of development, adoption and expansion of DeFi projects, as most of the decentralized finance projects are based on the Ethereum blockchain.
As for whether things will continue at the current pace and Ethereum remains the king of DeFi, it is uncertain, especially in light of the proliferation of competing projects that offer what Ethereum offers with lower fees and faster speeds.
Wall Street pro-crypto giant JPMorgan has taken a somewhat surprising stance against the dominant Ethereum blockchain and its digital currency, ETH.
JPMorgan explained that Ethereum is already losing its decentralized finance rankings to up-and-coming competitors, and could lose even more if it does not take the time to build scalability upgrades.Read:Bitcoin price drop to $38,000 triggered $700 million liquidations
According to Bloomberg, JPMorgan noted that due to the late launch of Sharding, which is the most important development for scaling the Ethereum network, it is possible that by the time Ethereum catches up with the rest of the projects, it will have lost its dominance. Already.
JP Morgan commented as follows:
In other words, Ethereum is currently in a race to maintain its dominance in the decentralized finance space.
Reasons why Ethereum may lose its dominance in the Defi arena:
There are clearly two main reasons why Ethereum may lose its dominance in the Defi arena
The first is the scalability problem.
The second is the increase in the number of competitors with independent blockchain networks.
As for the scalability issue, despite Ethereum’s attempts to fix it by preparing for the “Sharding” update that will help transactions to be faster with lower fees, but this upgrade is far from being implemented, as it is expected to arrive in 2023.
Ethereum has already lost 30% of its stake in the decentralized finance arena that it controlled.
According to Bloomberg, analyst Nikolaus Panigerzoglu published his view on Ethereum and its future by saying:Read:Learn about the 10 most famous personalities in the field of cryptocurrency and blockchain
The optimistic view of the dominance of Ethereum is in jeopardy due to the expansion.
Ethereum needs to devote more attention to scaling to stay on top.
Another threat to some extent is the rise of projects competing with Ethereum. These competitors are making innovations that are easier and cheaper, rather than relying on the Ethereum Layer 1 network for their security.
Therefore, Ethereum must speed up the Ethereum 2.0 update to regain its throne.
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