Ethereum Proposal Targets Excessive Staking With Tapered Burn Mechanism
Ethereum's staking success has led to an unexpected issue for the network. A new proposal, EIP-8361, aims to address this problem by introducing a tapered issuance burn mechanism.
The authors of the proposal argue that Ethereum's current issuance curve encourages unlimited validator growth rather than allowing market forces to determine equilibrium. They claim that the network has already crossed a one-third staking ratio in April 2026 and is continuing to climb each month, with the validator entry queue operating at maximum churn.
The proposal suggests that if this trend continues, more than 70 million $ETH could be staked by January 1, 2028, representing over 55% of total supply. To address this, EIP-8361 proposes deducting and burning a portion of each validator's idealized duty rewards every epoch.
The burn rate would gradually increase until reaching 100% once staking approaches a predefined saturation balance of roughly half the $ETH supply. This would allow net staking yield to taper linearly toward zero at a 50% staking ratio, removing what the proposal calls an artificial yield floor.