Contrary to the position of bank CEO Jamie Dimon, analysts at JPMorgan argue that blockchain networks that run more energy-efficient networks than Bitcoin will grow in popularity.
According to a JPMorgan report, PoS currently generates revenue of about $9 billion annually.
The researchers expect that the shift of Ethereum to Proof of Stakes after the launch of Ethereum 2.0 next year will stimulate reliance on this mechanism.
This could see stakeholder profits rise to $20 billion after the launch of Ethereum 2.0 and $40 billion by 2025, Forbes reports .
Qualification rivals mining:
The quota mechanism rewards holders of digital currency instead of mining blocks, making it more attractive to individual and institutional investors.
The report indicated the following:
Not only does it have the opportunity to hold cryptocurrencies until their price increases, but in many cases cryptocurrencies pay a significant nominal and real return.
JPMorgan analysts continued to stress that as cryptocurrency volatility decreases, the ability to earn a positive real return will be an important factor in helping the cryptocurrency market become more mainstream.
The JPMorgan report indicates that the betting and stakes economy will generate revenue in millions from trading platforms and companies that provide stake services.
The stakes are estimated to offer a revenue opportunity of $200 million for Coinbase in 2022, up from $10.4 million in 2020.
The report stated that quota and DeFi provide much better returns than the traditional banking system, where interest rates are at rock bottom or even negative in some cases, as the report noted on this by saying:
In fact, in the current zero rate environment, we see returns as an incentive to invest.
In April, press reports surfaced that JPMorgan had begun hiring Ethereum developers.
JPMorgan analysts predict that quota has the potential to use cryptocurrencies to earn a return, which will make digital currencies a more attractive asset class and could help increase mainstream adoption of cryptocurrencies.
Ethereum, which has seen a drop in hashrate, has been mentioned several times as it moves to a full proof of stake expected sometime next year.
At the time of writing this article, the “Beacon Chain” network has raised just under 6 million ETH.
This works out to just over 5% of the total supply, worth about $12.3 billion at current prices.
The stakes yield 6.4% annually, which is more than anything in any major bank.
Additionally, the “EIP-1559” upgrade that will be launched this month will burn network fees, making Ethereum’s properties even more deflationary.