Decentralised finance, or DeFi, are blockchain-based applications that allow people to make all kinds of financial transactions for which they would otherwise need a bank or broker. These applications remove intermediaries in financial relationships, making lending, trading, saving or borrowing possible in a peer-to-peer network without centralised bodies.

In other words, everyone can use such platforms, and no one is able to prevent them from doing so. In order to work with applications from this sector, it is enough to have a cryptocurrency wallet and a certain amount of coins on it. Documents, income certificates and other typical requirements from the world of traditional economy are not needed here.


The first major popularization of decentralized finance took place in the summer of 2020. That’s when many traders began trading tokens from that niche on the decentralized platform Uniswap.

Advertisement for the third version of the Uniswap exchange

Now, JP Morgan bank officials have questioned whether Etherium can continue to be a leader in the niche. And here’s why.

What will happen to Etherium?

In a statement to investors, the bank’s head of analyst group Nikolaos Panigirtzoglu said that the already familiar sharding – an important scalability upgrade in Ethereum 2.0 – “may come to market too late” for the project itself. As such, it would have little or no advantage in competing with alternative blockchains like Avalanche, Binance Smart Chain, Solana and Terra.

These too can be used to build DeFi, but the fees there are tens of times lower than those of Ethereum. Here’s a quote from bank representatives, in which they share their view of the situation

Etherium has engaged in an intense race to maintain its dominance in DeFi applications, and the outcome of that fight is, in our view, very difficult to predict right now.

In other words, experts believe that at the moment, Etherium is at the peak of its performance, making it unlikely that the network will become further popular. At the very least, this will not apply to newcomer investors, for whom the current fees in the Eth blockchain are too high.

We clarified the current data: the rates in this blockchain are really high right now. Specifically, sending ETH will cost the equivalent of $5.68, while sending any ERC20 token in the USDT-type Et network will cost $17.6. Finally, a coin exchange transaction on the decentralised exchange will have to pay just over $54.

Actual fees on the Etherium network

This statement didn’t sit well with Ethereum coordinator Tim Beiko. Here’s his quote, published by Decrypt.

Overall, it’s a pretty lazy/picky critique. Rollups [a solution for transactions outside of Ethereum’s core network – editor’s note] have already been released, with sharding reducing the fees for servicing them. On the technical side of things, everything is worked out and devoid of risk.

Etherium exchange rate in 2021

And here’s what Tegan Kline, co-founder of The Graph project, thinks about it.

Etherium by all accounts is still the most popular blockchain. Of the 26 networks that The Graph supports, 66.7 per cent of requests come specifically from Etherium.

Top 10 DeFi-protocols

JPMorgan’s main complaint is that the release of the second version of the Etherium protocol, in which the project will switch to a new consensus algorithm, could be delayed to the point that the cryptocurrency’s place will be taken by competitors. However, this is unlikely to happen – Ethereum 2.0 should be released as early as this year, and it looks like this time the altcoin developers will definitely meet the deadline. In addition, other projects already exist and are successfully pulling the blanket from users.

Ethereum 2.0 itself will give users low fees, fast transactions and virtually unlimited scalability. That is, with the release of the upgrade, Ethereum will lose most of its major shortcomings and will surely retain its status as the top platform for DeFi. At least right now, that seems feasible.


We believe that Etherium may cease to be a leader as a platform for the decentralised finance industry even after the network is upgraded to version 2.0. Still, the digital asset niche is growing at a tremendous pace, so the emergence of some improved competitor or the development of existing projects to record levels is absolutely realistic. Whatever the case, for now Eth continues to be the leader. Time will tell how long this will continue.


What do you think about it? Share your opinion in our Millionaire Crypto Chat. We’ll talk about other topics related to the world of decentralisation there as well.