JPMorgan analysts led by Nikolaos Panigirtzoglou shared their opinion that Ethereum is losing market share in the NFT ecosystem to Solana.
JPMorgan Analysts Point to Scalability Issue
Analysts writing on the subject at Business Insider wrote that as a result of high transaction fees on the network, Ethereum‘s share of NFT transaction volume dropped from 95% to 80% at the beginning of 2021. Analysts stated that just like decentralized finance protocols, network congestion and high transaction fees in Ethereum-based NFT marketplaces encourage users to use other blockchain networks. According to analysts, the blockchain network that took the largest share from Ethereum was Solana, while the Tezos blockchain also gained a significant market share.
Recently, Alkesh Shah, digital asset strategist at Bank of America, also expressed that Solana can take on the role of “Visa” in the crypto ecosystem due to its scalability and low transaction fees.
Ethereum’s Scalability Issue
Ethereum has lost its market share in the crypto ecosystem significantly in recent times due to the scalability issue and the associated high transaction fees on the network. Again, JPMorgan analysts wrote recently that Ethereum‘s dominance in DeFi (decentralized finance) will continue to decline. In this process, Ethereum alternative smart contract platforms such as Solana and Avalanche began to gain very serious market shares.
Some experts on the subject stated that this scalability problem will be solved with Ethereum 2.0 and that Ethereum will maintain its market share as a result of the predictable transaction fees, while some experts say that the centralized and security level of blockchains such as Solana is very low compared to Ethereum, with low transaction fees. He stated that he will continue to gain market share from Ethereum.