JPMorgan Finds Ethereum Upgrades Have Yet to Boost Network Engagement
Ethereum’s recent upgrades have not produced a significant increase in network activity, according to a new JPMorgan research report.
Analysts, led by Nikolaos Panigirtzoglou, report that key indicators such as daily transaction volume and active wallet addresses remained largely unchanged following the rollout of Ethereum’s Dencun and Pectra upgrades.
While total value locked (TVL) on the Ethereum network saw some gains from March 2024 through early May, largely due to heightened lending and borrowing on decentralized exchanges, the dollar value increase appears modest compared to the rise in the native ETH token price.
The Pectra upgrade, launched on May 7, introduced improvements to staking processes, wallet features, and overall network efficiency. These enhancements aim to improve Ethereum’s appeal to institutional investors and strengthen its competitive edge. However, these technical developments have not yet translated into measurable growth in daily user activity.
Post-Dencun, Ethereum experienced a decline in transaction fees, partly driven by greater adoption of layer 2 scaling solutions. Meanwhile, the circulating supply of ETH increased, prompting concerns about inflation as transaction activity remains subdued.
The report also highlights that institutional investors have been influential in driving ETH’s recent price rally, which has surged over 45% in the past month, according to CoinDesk data.
