JPMorgan Believes Shanghai Hard Fork Has Been Disappointing for Ethereum Activity
According to JPMorgan’s report, the implementation of the Shanghai update on the Ethereum network in April did not result in the expected increase in blockchain activity.
Despite the possibility of unstaking cryptocurrency, the hard fork did not significantly impact on-chain metrics.
The merge from Proof-of-Work to Proof-of-Stake drastically reduced network energy consumption, but the decline in supply of Ether and increase in staking volumes did not translate to significant on-chain activity.
JPMorgan analysts, led by Nikolaos Panigirtzoglou, noted a decrease in daily transactions by 12%, active addresses by almost 20%, and the volume of locked assets in DeFi protocols by 8% after the hard fork was implemented.
These findings suggest that the negative effects of the past year, such as the Terra and FTX market crashes, stricter US regulation, and contraction of the stablecoin segment, outweighed the potential benefits of the Shanghai update.
Despite a 50% increase in staked ETH, which improves network security, the analysts also expressed concern about the high percentage of staked ETH through protocols like Lido, which could lead to centralization.
