Due to hefty transaction costs, Ethereum is losing momentum to rivals like Solana in the NFT space, according to JPMorgan.
According to JPMorgan’s experts lead by Nikolaos Panigirtzoglou, Ethereum’s volume share of non-fungible token trading has declined from over 95% to roughly 80%.
Last week, Panigirtzoglou wrote to clients that congestion and expensive gas prices had prompted NFT apps to use other blockchains, similar to DeFi apps.
The bank’s global markets team discovered that the Solana network has just surpassed Ethereum in market share.
Ethereum has also been losing ground in decentralised finance. DeFi applications allow users to transact, trade, and sign “smart contracts” without the assistance of banks or clearing institutions.
Cardano, one of a handful of competing networks nicknamed “Ethereum killers”, has benefited greatly from DeFi.
However, Ethereum is still the dominating blockchain for NFTs and DeFi. The overall value of Ethereum-based projects was estimated at $156 billion last week by Coinbase experts.
Ether’s worth would suffer if the loss of its NFT share became more persistent in 2022, according to Panigirtzoglou.
Non-fungible tokens (NFTs) represent ownership of digital art, video clips, and virtual clothes.
One digital art NFT sold for $69 million in March 2021, boosting the market to $12 billion. Bored Apes and CryptoPunks are two prominent NFTs.
The Ethereum cryptocurrency network, created in 2015, powers most NFT transactions. Traders are getting more upset with network congestion and expensive transaction costs, which regularly exceed $80.
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