A group of Ethereum researchers, including Foundation member Justin Drake and Jérôme de Tychey, has submitted a draft proposal (EIP-8361) aimed at reshaping the network's issuance policy. The core idea, called Tapered Issuance Burn, would gradually reduce and ultimately eliminate consensus-layer rewards for validators once approximately half of all ETH is staked.
Under the proposed mechanism, a percentage of the theoretical rewards that validators earn for attestations, block proposals, and sync committees would be burned each epoch. This burn rate would scale linearly from 0% to 100% in parallel with the amount of ETH staked. Net staking yield would reach zero when staked ETH hits about 60.25 million—close to 50% of the current circulating supply of roughly 120.7 million ETH. At the current staking level, the proposal is expected to roughly halve the yield to around 1%.
The authors argue that the existing issuance curve creates a permanent incentive for more ETH to enter staking, even when additional deposits may provide limited security benefits. According to de Tychey, Ethereum’s staking rate already exceeded one-third of the total supply in April 2026 and continues to climb each month, with the validator activation queue at maximum capacity. Projections suggest that without intervention, staked ETH could surpass 70 million—more than 55% of supply—by January 2028.
Proponents warn that excessively high staking rates could introduce risks instead of strengthening security. Nominal staking yields and the resulting supply thinning might push individual validators out, leading to concentration of staked ETH in custody companies and large providers, potentially weakening Ethereum’s decentralized structure and the network’s social layer’s ability to intervene in a fork. The proposal also argues that continuous ETH issuance creates dilution costs for non-staking investors and that liquid staking tokens could threaten the direct use of ETH within the ecosystem.
To ease the transition, the draft includes an 18-month period during which Ethereum’s base reward factor would temporarily rise from 64 to 128, then gradually return to its current level, keeping validator yields near existing ranges before the burn becomes restrictive. The proposal remains in the community review stage and would need to pass technical review, developer coordination, and potential network upgrade decisions. ETH traded near $1,878 at the time of the announcement, showing no immediate price reaction.
