In the latest report, banking giant JPMorgan has said that Ethereum’s high gas fee and network bottleneck are putting a high risk for the smart contracts platform. They’ve added that this could be a “problem for Ethereum’s valuation”.
It added that Ethereum could be losing its NFT market share to rival Solana.
Recently, Solana has been gaining massive ground over the last year. If we look at the data, Ethereum’s NFT market share has already dropped to 80% from 95% in 2021.
Further, in the report which was first shared by Business Insider, JPMorgan said that NFTs are the “fastest-growing universe in the crypto ecosystem”. Therefore, if the loss of its NFT share begins to look more sustained in 2022. It would become a bigger problem for Ethereum’s valuation”.
The JPMorgan analysts also noted that data shows NFT players have been moving from Ethereum to Solana. The reason is the latter’s faster transaction speeds and low costs.
FurtherAnother area that we need to focus upon is Ethereum’s falling share in the world of decentralized finance (DeFi).
Moreover, last week in a precise note to the clients, JPMorgan analysts led by Nikolaos Panigirtzoglou, wrote:
“It looks like, similar to DeFi [decentralized finance] apps, congestion and high gas fees have been inducing NFT applications to use other blockchains”.
Furthermore, Ethereum has a big challenge ahead of it to quickly scale to the PoS Ethereum 2.0 or end up losing its market share. They can lose their market share to other competitors like Solana, Avalanche, Cardano, and others.