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JPMorgan says Ethereum’s dominance in the DeFi space will continue to decline

JPMorgan says Ethereum’s dominance in the DeFi space will continue to decline

JPMorgan’s report says Ethereum’s dominance in decentralized finance (DeFi) is in jeopardy as the network scaling necessary to maintain its leadership may come too late.

The bank said that the final stage of sharding, which is critical for network scaling, will not take place until next year. Thus, there is a risk that during this time the Ethereum network will continue to lose market share in favor of competing networks.

Competitors such as Terra, Binance Smart Chain, Avalanche and Solana have attracted large amounts of funding recently and are using it to add value to their ecosystems, according to the report.

The report states that before the final stage of Ethereum scaling, ecosystems of other blockchains will grow to such a level that the activity of the Ethereum network can no longer recover.

Analysts also added that Ethereum’s share of the DeFi ecosystem fell from 100% to 70% within one year and is likely to continue to decline until sharding is introduced in 2023.

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