Ethereum’s dominance is at risk as the crypto network is still a year away from receiving a key update to its blockchain that would make it more competitive against newer protocols, according to JPMorgan.
Concerns about efficiency, the number of transactions per second, and high gas fees are problems that have been plaguing Ethereum in recent months, in part due to the increasing transaction volumes of NFTs and other digital goods that they often use. ether as the preferred currency.
“However, the cryptocurrency markets continue to evolve and the so-called ‘Ethereum killers’ are gaining popularity based on their improvements made over ethereum,” JPMorgan explained in a note on Friday. The bank believes that new cryptocurrencies that enhance Ethereum’s shortcomings could “reduce Ethereum’s dominance and market value,” according to the note.
Ether’s market value has already started to deteriorate amid a cryptocurrency crash exacerbated by the recent aggressive swing by the Federal Reserve. The cryptocurrency is down roughly 35% from its recent high, erasing nearly $ 200 billion in market value.
Here’s why these four potential “Ethereum killers” could make an even bigger dent in the ether domain, according to JPMorgan.
1. “Solana is much faster.”
“Solana is one of the fastest growing cryptocurrencies. Its developers have claimed that it can process around 50,000 transactions per second, while Ethereum currently processes between 15 and 45 TPS. SOL has more than 400 projects running in its ecosystem, including stablecoins like Circle’s USD also manage portfolios, decentralized exchanges and other DeFI projects, “said JPMorgan.
2. “Cardano is more scalable.”
“Cardano was launched by one of Ethereum’s co-founders, Charles Hoskinson. It has taken a research intensive approach to development, with each stage peer-reviewed and thoroughly tested prior to implementation. Cardano is now also launching its contract capabilities. The third generation cryptocurrency is considered more scalable than Ethereum, “said JPMorgan.
3. “Polkadot is more interoperable.”
“Polkadot aims to solve some of Ethereum’s scalability and cost issues. But Polkadot shines in its interoperability capabilities as it enables blockchains to communicate effectively. This approach also makes it easier for developers to switch to the system of Polkadot, “JPMorgan said.
“Tezos is a user-centric open source project that enables users to assess project governance and blockchain direction. In addition, Tezos provides well-considered security and modularity, and is considered more scalable,” said JPMorgan .
But these four cryptocurrencies still have a long way to go before they can seriously challenge Ethereum’s dominance. The combined market value of the four “Ethereum killers” is still worth less than a third of the market value of ether.