Ethereum Could Lose its DeFi Dominance to Upcoming Chains – JP Morgan

As the first DeFi chain, Ethereum enjoys unrivaled dominance in the DeFi industry – contributing nearly two-thirds of the value in the DeFi ecosystem.

Giving projects the ability to build on its distributed ledger network, Ethereum formed the bedrock for what we know today as decentralized finance or DeFi.

As the first DeFi chain, Ethereum enjoys unrivaled popularity and dominance in the DeFi industry – contributing nearly two-thirds of the value locked in the DeFi ecosystem. 

Ethereum contributes $171.1 billion of the $269 billion locked in 87 DeFi chains. While this dominance and imminent ETH 2.0 migration has caused many to believe that Ethereum could only grow even further, JPMorgan believes it could lose this dominance.

Ethereum Could Lose its DeFi Dominance

According to analysts at JPMorgan, Ethereum’s dominance could wane even further as competitors push deeper into decentralized finance. Ethereum once dominated as much as 97% of the DeFi industry.


In addition, Ethereum’s late launch of sharding – an essential feature for Ethereum’s improved scalability – could mean the pioneer of DeFi plays catchup in an industry where projects are offering greater scalability.

While Ethereum can complete between 15-45 transactions per second, Terra can reach 10,000 TPS and Solana up to 50,000 TPS. The average block time of Ethereum lies between 10 – 20 seconds, whereas Terra has an average block time of 6 seconds.


With the sharding feature expected to bring Ethereum up to speed with these faster chains looking to launch in 2023, JP Morgan believes the network’s market share in DeFi could continue to drop.

On the Flipside

Why You Should Care

The DeFi industry is growing at a frantic pace, and chains capable of supporting the growth of protocols look to be the biggest gainers.

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Milko Trajcevski

Milko Trajcevski is a DailyCoin news reporter, mainly focused on Ethereum (ETH), Cardano (ADA), and their founders (Vitalik Buterin and Charles Hoskinson). Milko is an avid follower of crypto and blockchain technology and has written thousands of articles on the subjects. He finds joy in transforming complex issues into written content that anyone can understand. Milko has used and analyzed numerous exchanges, such as Coinbase, FTX, and Binance. He also closely follows all of the latest news around the largest decentralized exchanges (DEXs). Location: Skopje, Macedonia