Ethereum Staking Cap Proposal Sparks Debate Over Dilution and Security
A group of Ethereum contributors has proposed EIP-8361 as a way to reduce staking incentives and limit the amount of ETH locked up by validators.
The proposal, led by Jerome de Tychey, aims to cap staking at 50% of the supply. According to de Tychey, if no action is taken, more than 70 million ETH could be staked by January 2028, representing over 55% of the total supply.
The current staking model has no natural point where incentives slow down, and the validator entry queue is already operating at maximum churn. The proposal would change this by burning part of validator rewards as staking participation rises.
Supporters argue that reducing issuance could protect ETH holders from dilution and prevent liquid tokens from becoming the dominant form of ETH exposure. However, critics such as Gabriel Shapiro view the proposal as a 'huge distraction' from efforts to increase demand for ETH.