A new Ethereum proposal suggests that validators allocate up to 10% of their staking rewards to ecosystem development, each year, or (alternatively) contributing over 70,000 ETH.

BlockBeats News, June 22 — The Ethereum Research Forum recently proposed a new governance proposal called "Validator Redirected Revenue," allowing validators to allocate 0% to 10% of staking rewards to fund development tools, security research, public infrastructure, and other ecosystem public goods.

According to the proposal, validators can voluntarily specify the percentage of rewards they are willing to contribute; if more than half of validators support a contribution rate above 0%, this mechanism will be enforced on all validators. Validators can also designate the fund recipients, and the relevant funds will be automatically distributed through a dedicated distribution contract. Currently, the Ethereum ecosystem faces a "free-rider problem," where many projects benefit from public infrastructure, research, and security work but lack stable funding sources. As long-term stakeholders of ETH, validators should bear part of the ecosystem development costs.

Data shows that Ethereum validators currently earn about 700k ETH in staking rewards annually. If a redirect rate of 5% to 10% is ultimately adopted, approximately 50k to 70k ETH will flow into ecosystem funding each year, which is worth about $120 million at current prices.

However, the proposal has also sparked controversy. Opponents worry that the validator alliance might coordinate to control the flow of funds to specific groups; additionally, a large amount of ETH is actually staked through exchanges, liquidity staking protocols, and other third parties, meaning the ultimate loss of rewards is borne by delegated users, not the operating nodes' institutions, raising the issue of "decision-makers and payers being misaligned." Some also believe that if validators are willing to give up part of their rewards, Ethereum could directly reduce ETH issuance instead of establishing a new fund distribution mechanism.

Currently, the proposal is still in community discussion and has not yet entered the formal voting process.