Ethereum EIP-8361 Proposes Burning Staking Rewards to Zero at 50% ETH Stake

According to Ethereum developers, a new proposal submitted on August 4 would burn validator rewards if staking reaches half of ETH's total supply. EIP-8361, called a tapered issuance burn, introduces a rising deduction on validator duties that scales with the staking ratio, ultimately canceling consensus yield entirely at approximately 60.25 million ETH staked—roughly half the current supply. Co-author Jérôme de Tychey cited an urgent window for action, noting the validator entry queue is adding 1.75 million ETH monthly and that delays cost 1.5 percentage points of staking ratio.

The proposal faces pushback from major staking providers. Isidoros Passadis, Chief of Staking at Lido, warned the mechanism could price out expert operators and solo stakers by forcing a zero-yield equilibrium, leaving only large-scale custodians able to operate at break-even. De Tychey countered that removing the yield floor prevents indefinite dilution of unstaked holders.