Ethereum Staking Rewards Could Fall by Up to 50% Under New Proposal

Ethereum developers have proposed a new staking model that could cut validator rewards by up to 50%, sparking debate over ETH issuance, decentralization, and network security.

A group of six Ethereum researchers has introduced EIP-8363, a draft proposal that would gradually reduce staking rewards as more ETH is locked on the network. The researchers believe this could reduce inflation and strengthen Ether's long-term value.

The current reward system always encourages more staking because rewards never completely disappear, which could eventually lead to too much ETH being locked with a larger share controlled by major staking providers and custodians.