Ethereum Tapered Issuance Burn Proposal Sparks Developer Backlash
A new Ethereum proposal aims to curb staking rewards as the network approaches a significant milestone. The Tapered Issuance Burn, provisionally numbered EIP-8363, would phase in over 18 months and take the deduction rate to 100% at the threshold of 60.25 million ETH.
The authors argue that under the current reward curve, staking yield never falls below 1.5% even if all ETH is staked, creating a system that keeps pushing holders to stake and increasing the risk that large custodians and liquid staking providers gain more influence.
However, critics warn that reducing staking rewards could weaken institutional demand for ETH and reduce borrowing activity across DeFi. Stani Kulechov, Aave founder, says the proposal could damage Ethereum rather than deliver its intended effect.