Block Chain

Sky-High Transaction Fees are Driving NFT Users Away from Ethereum, says JPMorgan

With the NFT market turning into a billion-dollar business, customers constantly seek for one of the best offers to maximise returns.

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Things have been going south for the Ethereum (ETH) community as a result of its NFT quantity share has plummeted by 15% from 95%, recorded initially of 2021, to the present 80%, according to a research from JPMorgan. 

This lower in market share is attributed to congestion and excessive fuel charges skilled within the ETH ecosystem.  

JP Morgan analysts, led by Nikolaos Panigirtzoglou, famous that the Solana (SOL) community was the largest beneficiary of this hunch as a result of its NFT market share has surged in current weeks.

Panigirtzoglou acknowledged:

“It looks like, similar to DeFi apps, congestion and high gas fees have been, inducing NFT applications to use other blockchains.”

The analysts additionally acknowledged that issues wouldn’t be rosy for Ethereum if it continued freely giving its NFT share.

“If the loss of its NFT share starts looking more sustained in 2022, that will become a bigger problem for Ethereum’s valuation,” Panigirtzoglou identified.

Ethereum has additionally been shedding its lion’s share within the decentralized finance (DeFi) sector to different blockchains like Cardano (ADA). 

The intrinsic worth saved in NFTs primarily based on elements like being blockchain-enabled and restricted provide has made them tick.

NFTs are additionally crafting a reputation for themselves as a result of they grant proof of possession, as alluded to by Caroline Alexander, a finance professional on the University of Sussex. Alexander opined that NFTs could be all over the place sooner or later as a result of something that requires proof of possession can be an NFT.

Meanwhile, Pope Francis’s Pontifex carpet present was not too long ago offered as an NFT for about $81,886 for a charity trigger in Afghanistan. 

On the opposite hand, the fusion between gaming and blockchain-powered financialization not too long ago bought a lift after Hong Long-based HolyShxxt! launched a set of generative artwork NFTs.  

Image supply: Shuttetock

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