An analyst from JPMorgan noted that Ethereum has begun to lose ground to some competitors who are increasing their influence in the non-fungible token (NFT) market.
Ethereum competitors in the NFT market
Nikolaos Panigirtzoglou believes that the high fees on the Ethereum network are pushing some users in the NFT market towards cheaper alternatives, posing a potential threat to ETH:
“Like with DeFi applications, it seems that congestion and high fees are forcing NFT applications to use other blockchains. If this year the loss of positions in the NFT sector becomes more significant, then this could turn into a serious problem for Ethereum in terms of capitalization.”
Among the competitors of Ethereum, the analyst mentioned Solana, but also noted that other networks attract NFT developers with lower transaction fees. In particular, the Worldwide Asset eXchange (WAX) cryptocurrency ecosystem, which includes an NFT platform, was noted.
In November, NFT exchange WAX became the second largest trading platform, briefly overtaking Solana and Flow.
The JPMorgan analyst also considers the open source Tezos (XTZ) blockchain as a potential competitor to Ethereum in the NFT sphere. Last week, renowned clothing retailer Gap launched a new line of Tezos-powered NFTs, highlighting the network’s energy efficiency:
“Tezos is taking a more energy efficient approach to secure its network, enabling it to operate with minimal energy consumption and a low carbon footprint.”