ETH’s Activity Has Been ‘Disappointing’: JP Morgan
JPMorgan has reported that Ethereum’s network activity has been disappointingly low following the Shanghai upgrade in April. The shift from proof-of-work to proof-of-stake led to a collapse in energy consumption, shrinking supply, and a sharp increase in staking. However, the increase in network activity has been disappointing, with declines in daily transactions, active addresses, and total value locked (TVL) of decentralized finance protocols. The analysts also noted a decline in Ethereum’s supply.
Ethereum’s activity has fallen due to various factors such as the collapse of FTX and Terra, U.S. regulatory uncertainty, institutional investor fading interest in crypto, and a decrease in venture capital funding. Analysts suggest that the Shanghai upgrade, which allowed validators to withdraw staked ether, may have outweighed the positive impact of the upgrade. Ethereum Layer 2 networks have shown mixed results, with Optimism experiencing increased activity and Arbitrum declining. Centralization concerns, particularly regarding liquid staking protocols like Lido, have also been noted.
(With inputs from Shikha Singh)
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