Ethereum Researchers Push for Zero Staking Rewards at Half of Total Supply

A group of six Ethereum researchers has proposed a plan to gradually phase out staking rewards on the network, burning them down to zero when approximately 60.25 million ETH are staked, or half of all supply.

The proposal argues that this would limit dilution for existing holders and firm up ETH's long-run valuation. However, others have expressed concerns about the impact on validators' income and the network's security.

The plan would involve burning a portion of validator rewards at the end of each epoch, scaling up linearly to 100% as staking approaches the saturation threshold. This burn-in period would last approximately two years, with an initial phase-in lasting about six months.

Some critics argue that driving staking rewards toward zero would render ETH borrowing strategies largely unworkable, and could lead to a capital drain away from DeFi protocols. Others point out that the proposal arrived with only 48 hours' notice for comments, raising concerns about its implementation in time for Ethereum's next network upgrade, Hegotá.