Ethereum is a smart contract platform that enables developers to build tokens and decentralized applications (dapps). ETH is the native currency for the Ethereum platform and also works as the transaction fees to miners on the Ethereum network. Ethereum is the pioneer for blockchain based smart contracts.
Solana crypto is a high throughput blockchain based on the Proof of History (PoH) and Proof of Stake (PoS) consensus. Built by a team of networking engineers, Solana aims to become the blockchain infrastucture for modern internet applications.
The bank’s analysts indicated that, similarly to the s has happened with DeFi, Ethereum NFT developers are opting to move to other blockchains due to high network fees.
Ethereum a decentralized open-source blockchain with smart contracts functionality. (ETH), the second largest Blockchain a distributed ledger system. A sequence of blocks, or units of digital information, stored consecutively in a public database. The basis for cryptocurrencies. by market capitalization, it is losing its dominance in the tokens (NFTs), according to the banking giant JPMorgan .
According to the bank’s analysts, the high transaction fees of Ethereum are the main factor why the network would be giving up its dominant share of the NFT market. However, this is benefiting rival blockchains, such as Solana, which are starting to gain ground in the collectibles sector.
In a note to customers of JPMorgan , cited by Business Insider the analysts noted Ethereum has lost its share in the trade of tokens non-expendable by 15% over the last 12 months . The network’s volume how much cryptocurrency has been traded over a set period, such as the past 24 hours. share in NFT trading went from about 95% at the beginning of 2021 to 80%, they said in the report headed by Nikolaos Panigirtzoglou.
It seems that, similar to decentralized decentralization refers to the property of a system in which nodes or actors work in concert in a distributed fashion to achieve a common goal. finance (DeFi) applications, congestion and high gas a term used on the Ethereum platform that refers to a unit of measuring the computational effort of conducting transactions or smart contracts, or launch DApps in the Ethereum network. It is the “fuel” of the Ethereum network. *see Gas Limit and Gas Price. rates have induced NFT non-fungible tokens (NFTs) are cryptocurrencies that do not possess the property of fungibility. applications to use other blockchains.
Ethereum is losing its dominance
In a prior note analysts at JPMorgan had already projected a loss of share of Ethereum in the DeFi a movement encouraging alternatives to traditional, centralized forms of financial services. space for similar reasons. That report, also led by Panigirtzoglou, the bank’s managing director for global market strategy, notes that rival networks could start to take share in the sector as they Ethereum continues to wait for your update.
La “ Optimistic view on Ethereum’s dominance a measure of Bitcoin's value in the context of the larger cryptocurrency market. is at risk “, said analysts . This is because the scalability upgrade, “ which is necessary for the network a network refers to all nodes in the operation of a blockchain at any given moment in time. to maintain its dominance, may come too late. “, agregaron.
Panigirtzoglou made specific reference to a final stage of the update of the Ethereum 2.0 known as “ Sharding sharding is a scaling approach that enables splitting of blockchain states into partitions containing states and transaction history, so that each shard can be processed in parallel. ” o “ fragmentation “which is seen as a critical development for the scalability of the network and is expected in 2023.
The bank’s experts believe that Ethereum could now give up its share of the NFT market similar to what is happening with DeFi. The underlying reasons are the same: the need for greater scalability, which currently translates into high operating fees (or ‘Gas’) and network congestion. While the next update of Ethereum could solve these problems, the bank’s analysts believe that this development could come too late, giving other platforms the upper hand.
At the time of publication, the average price of Gas at Ethereum is USD $125, according toYCharts. It should be noted that this represents a high additional expense when minting or purchasing NFT, as well as for other transactions on the network. The figure represents an increase of 65% from a year ago.
Solana and other rivals gain ground at NFT
Newer blockchains, which offer cheaper transaction fees, are starting to attract developers and users in the NFT space, noted analysts at JPMorgan . The team found that, in particular, the network Solana (SOL) has been taking advantage of this scenario to increase its participation.
Solana has become one of the most eye-catching projects in the field. Blockchain . The platform a place to buy, sell and store cryptocurrency promises to support the opposite of Resistance, it is a threshold that crypto’s price doesn’t fall below. more than 500,000 transactions per second with fees in the pennies on the dollar. A recent report byBank of America noted that Solana could become the ” next Visa “ of the digital digital technologies are these electronic tools that have the ability to generate, store or even process data. currency currency is a medium of exchange that defines value. ecosystem due to its remarkable scalability properties.
Analysts at JPMorgan also mentioned that other blockchains, such as Wax o Tezos are also competing to gain market share in the NFT market. In the meantime, they fear that this loss of land for Ethereum could negatively impact the market an area or arena, online or offline, in which commercial dealings are conducted. valuation and price of its native cryptocurrency, ETH.
If the loss of its stake in NFT starts to look more sustained in 2022, that would become a bigger problem for Ethereum’s valuation.
As of press time, ETH is trading at USD $3,130, a drop of more than 30% from its all-time high near $5,000. It should also be noted that Ethereum continues to maintain its dominance in the DeFi spaces (with more than USD $130 billion in total value locked in their protocols) and NFT (with more than 2,500 projects ).
- JPMorgan says 2022 could be the year of interoperability blockchain interoperability, or cross-chain interoperability, is the ability to see and share information across multiple blockchains. between Blockchain networks
- Mike Tyson publicly announces his endorsement of Solana’s network
- Charles Hoskinson points out that rival projects offer more than they can give and will end up copying what Cardano does.
Article versioned by Hannah Estefania Perez / DiarioBitcoin
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