JPMorgan said that the days of Ethereum's dominance in the decentralized finance (DeFi) space may soon be over.
According to a note, Panigirtzoglou said that Ethereum would continue losing its dominance in the DeFi space.
Furthermore, JPMorgan clarified that to expand the scalability of the ecosystem, it will be split into separate shards. Sharding is one of the main features of the anticipated Ethereum 2.0 upgrade.
However, the shard chain phase is expected to arrive in 2023. Following this, Panigirtzoglou thinks that it will be too late for the second-largest crypto to catch up to the rest of the blockchains by that time.
This is mainly because the Ethereum DeFi market has been steadily shrinking over the past year. DefiLlama reported that Ethereum dominance was at more than 97% last January, but its total value locked (TVL) in DeFi protocols has now decreased to 63%. This is due to the rapid growth of competitors such as Binance Smart Chain (BSC), Avalanche, and Solana.
More so, all these characteristics brought Panigirtzoglou to say that Ether is losing ground to independent blockchains. On the other hand, the Ethereum network is being criticized because of its high gas fees that make the network inaccessible for a large group of the DeFi community.