Ethereum Proposal Would Burn Staking Rewards to Zero if Half of ETH Is Staked
Ethereum developers have proposed EIP-8361, a “tapered issuance burn” that would deduct and burn ETH from every validator duty, with the burn rising as more ETH is staked. The curve is designed so staking rewards fall to zero at a fixed saturation point of 60.25 million ETH, about 50% of supply. Unlike the current model, which leaves a roughly 1.5% yield floor, this would let staking settle where yield matches the market risk premium, potentially below 50% staked. The proposal phases in over 18 months to avoid an abrupt drop from today’s roughly 33% staked and 2.6% yield. Supporters say it reduces incentives for excessive staking, protects solo stakers, and limits dilution of unstaked holders. Critics, including Lido’s staking chief, argue it is too ambitious, may centralize stake in large low-cost operators, and could create a dangerous zero-yield equilibrium near 50%.
