New Ethereum proposal would cut issuance to zero if staked ETH reaches $112 billion
The EIP-8361 draft proposal calls for burning a rising share of validator rewards as the staking ratio climbs.
Researchers and developers have proposed a novel approach to reduce Ethereum's issuance to zero, contingent on staked ETH reaching $112 billion. This mechanism would gradually burn validator rewards as staking increases, ultimately resulting in a net issuance of zero, which could enhance ETH's scarcity and value by limiting dilution to existing holders.
The proposal, signed by six researchers, including Justin Drake of the Ethereum Foundation, suggests that once approximately 60.25 million ETH (around half of the total supply) is staked, the burn rate would reach 100%. This would maintain the same rewards structure for validators but eliminate newly created ETH, with the deduction from rewards occurring slowly over 18 months.
The proposed changes could potentially destabilize the network, as it would require about two years to adjust and could negatively impact validators, particularly smaller individual stakers. However, proponents argue that this could strengthen Ethereum's long-term security and valuation. The proposal is currently under review for the upcoming Hegotá network upgrade, but its inclusion is uncertain due to the limited implementation draft and lack of consensus among validators and stakers.
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