Ethereum Developers Suggest Plan to Reduce Net Token Emission to Zero
Top Ethereum researchers and developers have proposed a dramatic plan to reduce the network's net emission of new tokens to zero. They suggest gradually burning validators' rewards as the locked amount increases, with 100% being burned when around 60.25 million ETH (approximately half of the total supply) is staked.
This would strengthen Ethereum's long-term scarcity and value by preventing further dilution for existing owners. The current staking mechanism would never reduce its reward to zero under the current system, as there would always be a motive for additional staking even if all ETH were locked. The proposed plan aims to address this issue.
Jérôme de Tychey, one of the proposal's authors, forecasts over 70 million ETH will be staked by January 2028 if no changes are made. He argues that beyond a certain point, additional staking would actually make Ethereum less secure rather than more secure, as large amounts of ETH are held by exchanges and staking providers, while individual stakers become marginalized.
The proposal has sparked debate within the community, with some experts expressing concerns about its potential impact. Stani Kulechov, CEO of Aave Labs, believes that burning staking rewards would make most ETH lending strategies unviable. Mike Silagadze, founder of ether.fi's liquid staking protocol, also criticizes the proposal, stating that it 'prevents new ETH from being staked.'