Ethereum Validators Could See Rewards Halted if Half of Supply Is Staked

A proposal has been submitted to Ethereum developers that would change how validators are rewarded for their duties. The proposal, known as EIP-8361, would deduct a rising share of validator rewards and destroy the ETH, cancelling issuance entirely at half the supply staked.

The authors of the proposal claim that the current system is unsustainable, with the validator entry queue adding 1.75 million ETH per month. They argue that every month of delay costs 1.5 points of staking ratio.

Jérôme de Tychey, a co-author of the proposal, warned that 'the window is closing', and that if action is not taken soon, more than 70 million ETH will be at stake by January 2028, north of 55% of supply.