Analysts from JPMorgan, including managing director Nikolaos Panigirtzoglou claim Ethereum has already lost its dominance as the main growth network of the decentralized financial sector (DeFi).
The second most popular network after Bitcoin (BTC) will return to superiority if the sharding phase is completed.
Meanwhile, dumping networks such as Terra, Binance Smart Chain (BSC), Avalanche, and Solana will replace Ethereum’s position.
For the record, sharding is the last phase of the Beacon Chain. This stage is expected to end completely around 2023.
But, wait a minute! The Ethereum developer group said the opposite - "If you look at the data, Ethereum is still the most used network."
It is understood that 66.7% of the 26 networks supported by the Ethereum index protocol, The Graph are waiting to be anchored in Ethereum.
DeFi actually refers to an application developed on a blockchain, operating like a bank by offering its users a variety of functions without intermediaries.
The first biggest DeFi app to get attention was MakerDao which has been airing since 2017 on Ethereum. Following that, the DeFi sector in Ethereum continued to grow and to date as many as 250 DeFi platforms have come into existence.
But because DeFi’s popularity on Ethereum is too high, the network often faces congestion and extreme transaction costs.
Because of that, they are trying to make reforms. For now Ethereum is still using the Proof-of-Work (PoW) consensus and is moving to a Proof-of-Stake (PoS) or Ethereum 2.0 system via the Altair update.
In addition, many factors need to be considered including securities and incentive tokens as offered on other networks.
If Ethereum’s layer-2 solution applies the same incentives, it’s not impossible that the DeFi market on this network will excel.
Recently, the founder of Ethereum, Vitalik Buterin has revealed that the network is still 50% before fully mature and is expected to reach that level in another 6 years.
