{"id":59999,"date":"2023-09-23T04:45:16","date_gmt":"2023-09-23T08:45:16","guid":{"rendered":"https:\/\/coinscreed.com\/staging\/?p=59999"},"modified":"2023-09-23T05:40:51","modified_gmt":"2023-09-23T09:40:51","slug":"jp-morgan-report-ethereums-shanghai-upgrade-fails-to-impress","status":"publish","type":"post","link":"https:\/\/coinscreed.com\/staging\/jp-morgan-report-ethereums-shanghai-upgrade-fails-to-impress\/","title":{"rendered":"JP Morgan Report: Ethereum\u2019s Shanghai Upgrade Fails to Impress"},"content":{"rendered":"\n<p>A new report from JP Morgan reveals that <a href=\"https:\/\/coinscreed.com\/staging\/ethereum-surges-past-2k-as-uncertainty-surrounding-shanghai-shapellaupgrade-settles.html\">Ethereum\u2019s Shanghai upgrade,<\/a> which switched the network from proof-of-work to proof-of-stake, did not boost its performance as expected. The report analyzes the reasons behind Ethereum\u2019s disappointing network activity and its challenges in the crypto market.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-full\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1024\" height=\"538\" src=\"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2023\/09\/jpmorgan-chase-.webp\" alt=\"JP Morgan Report: Ethereum\u2019s Shanghai Upgrade Fails to Impress\" class=\"wp-image-60009\" srcset=\"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2023\/09\/jpmorgan-chase-.webp 1024w, https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2023\/09\/jpmorgan-chase--300x158.webp 300w, https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2023\/09\/jpmorgan-chase--768x404.webp 768w, https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2023\/09\/jpmorgan-chase--18x9.webp 18w, https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2023\/09\/jpmorgan-chase--750x394.webp 750w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>Ethereum, the world\u2019s leading smart contract platform, underwent a major upgrade in April 2023 called Shanghai. <\/p>\n\n\n\n<p>The upgrade was <a href=\"https:\/\/insidebitcoins.com\/news\/ethereums-upcoming-upgrade-faces-potential-delays-post-shanghai-network-activity-down\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">supposed to make the network faster,<span class=\"wpil-link-icon\" title=\"Link goes to external site.\" style=\"margin: 0 0 0 5px;\"><svg width=\"24\" height=\"24\" style=\"height:16px; width:16px; fill:#000000; stroke:#000000; display:inline-block;\" viewBox=\"0 0 24 24\" version=\"1.1\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" xmlns:svg=\"http:\/\/www.w3.org\/2000\/svg\"><g id=\"wpil-svg-outbound-7-icon-path\" fill=\"none\" clip-path=\"url(#clip0_31_188)\">\r\n                            <path d=\"M9.16724 14.8891L20.1672 3.88908\" stroke-linecap=\"round\"\/>\r\n                            <path d=\"M13.4497 3.53554L20.5208 3.53554L20.5208 10.6066\" stroke-linecap=\"round\" stroke-linejoin=\"round\"\/>\r\n                            <path d=\"M17.5 13.5L17.5 16.26C17.5 17.4179 17.5 17.9968 17.2675 18.4359C17.0799 18.7902 16.7902 19.0799 16.4359 19.2675C15.9968 19.5 15.4179 19.5 14.26 19.5L7.74 19.5C6.58213 19.5 6.0032 19.5 5.56414 19.2675C5.20983 19.0799 4.92007 18.7902 4.73247 18.4359C4.5 17.9968 4.5 17.4179 4.5 16.26L4.5 9.74C4.5 8.58213 4.5 8.0032 4.73247 7.56414C4.92007 7.20983 5.20982 6.92007 5.56414 6.73247C6.0032 6.5 6.58213 6.5 7.74 6.5L11 6.5\" stroke-linecap=\"round\"\/>\r\n                        <\/g>\r\n                        <defs>\r\n                            <clipPath id=\"clip0_31_188\">\r\n                                <rect fill=\"white\" height=\"24\" width=\"24\"\/>\r\n                            <\/clipPath>\r\n                        <\/defs><\/svg><\/span><\/a> more scalable, and more eco-friendly by switching from a <a href=\"https:\/\/coinscreed.com\/staging\/proof-of-work-vs-proof-of-stake-similarities-and-differences.html\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">proof-of-work (PoW) consensus <\/a>mechanism to a proof-of-stake (PoS) one. <\/p>\n\n\n\n<p>However, a new research report released by JP Morgan on Thursday suggests that the upgrade did not have the desired impact on Ethereum\u2019s performance and growth.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-the-positive-and-negative-outcomes-of-the-shanghai-upgrade\">The Positive and Negative Outcomes of the Shanghai Upgrade<\/h3>\n\n\n\n<p>According to the report, the Shanghai upgrade positively affected Ethereum such as reducing its energy consumption by more than <strong>99%,<\/strong> shrinking its supply, and increasing its staking activity. <\/p>\n\n\n\n<p>The report estimates that about <strong>14%<\/strong> of all ether (ETH), the native cryptocurrency of Ethereum, is currently staked on the network, accounting for <strong>16 million tokens<\/strong> and a current value of over <strong>$26 billion. <\/strong><\/p>\n\n\n\n<p>Staking is a process where users lock up their funds on the network in exchange for rewards and security.<\/p>\n\n\n\n<p>However, the report also found that the Shanghai upgrade did not translate into a significant increase in network activity, a key indicator of Ethereum\u2019s adoption and utility. <\/p>\n\n\n\n<p>The report noted that Ethereum\u2019s daily transactions count has fallen by about <strong>12%,<\/strong> daily active users have dropped by nearly <strong>20%,<\/strong> and the total value locked in decentralized finance (DeFi) applications has decreased by almost<strong> 8%<\/strong> since the upgrade. <\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter size-large\"><img decoding=\"async\" width=\"1024\" height=\"555\" src=\"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2023\/09\/J.P.-Morgan-data-1024x555.jpeg\" alt=\"JP Morgan Report: Ethereum\u2019s Shanghai Upgrade Fails to Impress\" class=\"wp-image-60015\" srcset=\"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2023\/09\/J.P.-Morgan-data-1024x555.jpeg 1024w, https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2023\/09\/J.P.-Morgan-data-300x163.jpeg 300w, https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2023\/09\/J.P.-Morgan-data-768x416.jpeg 768w, https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2023\/09\/J.P.-Morgan-data-18x10.jpeg 18w, https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2023\/09\/J.P.-Morgan-data-750x407.jpeg 750w, https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2023\/09\/J.P.-Morgan-data-1140x618.jpeg 1140w, https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2023\/09\/J.P.-Morgan-data.jpeg 1280w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>These numbers suggest that the upgrade did not boost Ethereum\u2019s performance as anticipated.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The Possible Reasons for Ethereum\u2019s Underperformance<\/h3>\n\n\n\n<p>The report offers several possible explanations for why Ethereum is not performing as well as expected after the Shanghai upgrade. Some of these include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The rise of competing blockchains that offer similar or better features than Ethereum, such as <strong>Solana, Binance Smart Chain, and Cardano. <\/strong>These blockchains have attracted users and developers with their lower fees, higher speeds, and innovative solutions.<\/li>\n\n\n\n<li>The regulatory uncertainty and crackdowns in some major markets, such as China and the U.S., have affected the crypto industry as a whole. The report cites the recent collapse of <a href=\"https:\/\/coinscreed.com\/staging\/dcg-accused-of-early-knowledge-on-genesis-ftx-and-3ac.html\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">FTX<\/a> and <a href=\"https:\/\/coinscreed.com\/staging\/terra-money-shutsdown-website-to-prevent-phishing-scams.html\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Terra,<\/a> two prominent crypto platforms that faced legal troubles in their respective jurisdictions.<\/li>\n\n\n\n<li>The loss of interest and confidence from institutional and retail investors, who the volatility and risks of the crypto market have spooked. The report points out that Ethereum\u2019s price has fallen by more than <strong>40%<\/strong> from its all-time high of over <strong>$4,000<\/strong> in May 2023.<\/li>\n\n\n\n<li>The technical challenges and delays that Ethereum faces in implementing its roadmap and vision. The report mentions that Ethereum still plans to introduce another upgrade later this year, called EIP-4844, which aims to improve its scalability and efficiency. However, the report warns that this upgrade may face potential setbacks and trade-offs.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">What\u2019s Next for Ethereum?<\/h3>\n\n\n\n<p>Despite its current challenges, Ethereum still remains the dominant smart contract platform in the crypto space, with a market capitalization of over <strong>$200 billion<\/strong> and a loyal community of users and developers. <\/p>\n\n\n\n<p>The report acknowledges that Ethereum has a strong network effect and a rich ecosystem of applications and innovations that give it an edge over its rivals.<\/p>\n\n\n\n<p>However, the report also cautions that Ethereum needs to overcome its hurdles and deliver on its promises if it wants to maintain its leadership position and achieve its long-term goals. <\/p>\n\n\n\n<p>The report concludes that <em>\u201cthe cryptocurrency market remains challenging at present\u201d<\/em> and that <em>\u201cEthereum\u2019s goal was to be greener and more efficient,\u201d<\/em> but it <em>\u201cdidn\u2019t grow as much as hoped after the upgrade.\u201d<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A new report from JP Morgan reveals that Ethereum\u2019s Shanghai upgrade, which switched the network from proof-of-work to proof-of-stake, did not boost its performance as expected. The report analyzes the reasons behind Ethereum\u2019s disappointing network activity and its challenges in the crypto market. Ethereum, the world\u2019s leading smart contract platform, underwent a major upgrade in [&hellip;]<\/p>\n","protected":false},"author":44,"featured_media":60009,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[130],"tags":[12116,476,9730],"class_list":["post-59999","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blockchain-news","tag-ethereum-shanghai-upgrade","tag-jp-morgan","tag-proof-of-stake-2"],"jetpack_featured_media_url":"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2023\/09\/jpmorgan-chase-.webp","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/59999","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/comments?post=59999"}],"version-history":[{"count":0,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/59999\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media\/60009"}],"wp:attachment":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media?parent=59999"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/categories?post=59999"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/tags?post=59999"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}