An analyst from JPMorgan says that Ethereum (ETH) is losing ground to several competitors which are gaining dominance in the non-fungible token (NFT) market.
In a note seen by Markets Insider, analyst Nikolaos Panigirtzoglou said that high fees on the Ethereum network are pushing some users in the NFT market towards cheaper alternatives, presenting a potential threat to ETH.
“It looks like, similar to DeFi apps, congestion and high gas fees have been inducing NFT applications to use other blockchains… if the loss of its NFT share starts looking more sustained in 2022, that would become a bigger problem for Ethereum’s valuation.”
While Panigirtzoglou referenced Solana (SOL) in particular, he also said that other networks are attracting NFT developers with their lower transaction fees. Specifically, the bank mentioned the Worldwide Asset eXchange (WAX), a crypto ecosystem that includes an NFT marketplace.
In November, the WAX NFT marketplace processed the second-highest level of volume, briefly overtaking Solana and Flow.
At time of writing, WAX, the exchange’s native token, is trading at $0.38, down 21% in the last 30 days.
Panigirtzoglou also named open-source blockchain Tezos (XTZ) as a potential challenger to Ethereum’s dominance in NFTs.
Last week, clothing giant Gap launched its new NFT lineup on the Tezos blockchain, mentioning the altcoin’s energy efficiency in an announcement.
“Tezos uses a more energy-efficient approach to secure its network, allowing it to operate with minimal energy consumption and a low carbon footprint.”
At time of writing, XTZ is trading at $4.04, more than 55% down from its all-time high above $9.
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