Ethereum Researchers Push for Zero Staking Rewards at Half of Supply

A group of six researchers has proposed a plan to burn staking rewards down to zero on Ethereum, reaching full 100% burn at around 60.25 million ETH, or half of all supply. This plan aims to limit how much existing holders get diluted and make ETH's long-run valuation firmer.

The proposal would subtract a portion of every validator's rewards and destroy it, not rerouting it elsewhere. The deduction would ramp in gently over an 18-month phase-in, preceded by roughly six months while the upgrade is shipped.

Some argue that staking never stops paying, with a yield of around 1.5% even if all ETH is staked. However, others claim this could lead to additional stake weakening Ethereum's security instead of reinforcing it.

The proposal has been met with concern from DeFi protocols and stakers, who fear it would render ETH borrowing strategies unworkable and push out solo stakers in favor of large centralized entities.