JPMorgan: Solana is displacing Ethereum as NFT leader

JPMorgan: Solana is displacing Ethereum as NFT leader
фото показано с : invezz.com

2022-1-20 16:55

Ethereum’s (ETH/USD) dominance in non-fungible tokens (NFTs) is declining because of high gas fees and congestion, JPMorgan said in an analyst report, quoted by CoinDesk. Ethereum’s share of the NFT market has dropped from around 95% to around 80% in one year.

Ethereum also losing market cap share to Solana

Since last summer, Solana (SOL/USD) has been displacing Ethereum in terms of NFT volume share. The NFT market started a major expansion in August. Ethereum has been losing its market cap share to Solana in line with the declining NFT volume share as well.

According to JPMorgan’s report, Ethereum’s share of the NFT market is probably going to be more important than its share of decentralized finance (DeFi) because NFTs are the most dynamically growing niche in the crypto space.

Emerging problems for Ethereum valuation  

The bank warned that Ethereum could face issues with its valuation if its loss of NFT market share continues this year. Earlier this month, analysts from the bank said Ethereum could be ousted as leader in DeFi because of network scaling delays. Scaling is required for the second biggest crypto by market cap to maintain its dominance.

According to JPMorgan’s strategists, the final phase of the sharding won’t happen before 2023, and sharding is critical for scaling. That means full scaling is at least a year away.

Severe competition

In that period, the Ethereum Mainnet risks continued losses of market share to competing networks, the experts cautioned. Among blockchains encroaching on its share are BSC, Terra (LUNA/USD), Fantom (FTM/USD), Avalanche (AVAX/USD), Tron (TRX/USD), Polygon (MATIC/USD), and of course Solana. They have been gaining the biggest share of the DeFi market.

These blockchains have attracted a lot of funding and established incentives to increase use in their own systems, the bank added, noting that by the time sharding of Ethereum has been implemented, other ecosystems may have grown so extensively that activity won’t return to Ethereum.

JPMorgan isn’t the only leading bank of this opinion. Bank of America has pointed to Avalanche as a credible alternative to Ethereum for NFTs, DeFi projects, gaming, and other assets.

The post JPMorgan: Solana is displacing Ethereum as NFT leader appeared first on Invezz.

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Источник: invezz.com

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