JPMorgan Says Ethereum’s DeFi Dominance at Risk Due to ‘Sharding’ Delays

Ethereum’s dominance of decentralized finance (DeFi) is astatine hazard arsenic the scaling of the network, which is needed to support its dominance, whitethorn get excessively late, JPMorgan said successful a report.

• The last signifier of the sharding, which is important for scaling the network, won’t get earlier adjacent year, the bank’s strategists led by Nikolaos Panigirtzoglou wrote successful the enactment published connected Wednesday.

• Full scaling is astatine slightest a twelvemonth distant and the hazard is that during that time, the Ethereum web volition proceed to suffer marketplace stock to competing networks, the slope warned.

• Alternative blockchains specified arsenic Terra, Binance Smart Chain, Avalanche, Solana, Fantom, Tron and Polygon person been gaining the astir marketplace stock successful the DeFi market, and those competitors person received a batch of backing and person acceptable up incentives to summation usage successful their ain systems, JPMorgan said.

• The hazard with Ethereum is that by the clip sharding is implemented different ecosystems would person grown by truthful overmuch that enactment won’t instrumentality en masse to the Ethereum network, the slope noted.

• Ethereum’s stock of full worth locked successful DeFi has fallen from astir 100% astatine the commencement of 2021 to astir 70% and volition apt driblet further earlier sharding is implemented successful 2023, the study added.

• Last month, Bank of America said that smart contract Avalanche is simply a credible alternate to Ethereum for DeFi projects, non-fungible tokens, gaming and different assets.