DeFi Leaders Unite Against Plan to Burn Ethereum Validator Rewards
A proposal to burn a rising share of Ethereum validator rewards has sparked opposition from key players in the DeFi space. Aave founder Stani Kulechov and ether.fi chief executive Mike Silagadze have expressed concerns about the plan, dubbed EIP-8363, which would remove the incentive to stake beyond half of all ETH by burning a fraction of validator rewards that climbs with the staking ratio.
The proposal aims to cap Ethereum's issuance curve before the staked share of ETH goes any higher. It would cut net consensus yield from about 2.6% to 1.2% at today's staking level, which is why the authors phase it in over 18 months.
Kulechov argued that the mechanism produces the opposite of its stated goal and would accelerate the capture of stakers who stake for economic return, leaving the field to entities that stake for structural, regulatory, or product reasons. Silagadze claimed the change would push out solo stakers and leave staking to large centralized entities with zero cost of capital.