Ethereum Staking Reward Burn Proposal Withdrawn from Hegotá Upgrade

A proposal to burn part of Ethereum validators' staking rewards has been withdrawn from consideration for the upcoming Hegotá upgrade. The EIP-8363 authors, led by Jérôme de Tychey, president of Ethereum France, announced the withdrawal on Thursday after industry players and core protocol contributors argued that fork scoping was not the right venue for an issuance policy change.

The proposal would have burned a share of each validator's rewards at every epoch, with the share growing as more ETH is staked. It would have reached 100% once about 60.25 million ETH is staked, roughly half the supply. Past that point, staked ETH earns no issuance rewards.

The authors argued that the current curve keeps a yield floor near 1.5% however much ETH is staked. Applied in full at the 33% staking ratio the EIP cites, the burn would drop net yield from about 2.6% to 1.2%. To soften that drop, the burn would have phased in over 18 months.

Lido had asked for withdrawal of the proposal in August, citing issuance changes in later forks and the timing left no time to prepare counter-proposals.