Ethereum developers propose EIP-8361 to cap staking rewards

A formal proposal to fundamentally alter the economics of Ethereum staking has been submitted by core developers, introducing a mechanism that would gradually eliminate new validator rewards once half of the cryptocurrency's total supply is locked. The proposal, known as EIP8361, was formally submitted by Ethereum Foundation researcher Justin Drake and several other researchers and aims to address concerns over network centralization and excessive inflation by implementing a "tapered issuance burn."

Under the draft proposal, as the total amount of staked ETH increases, a growing portion of the new ETH issued as validator rewards would be automatically burned, or permanently removed from circulation. This burn rate would increase until it reaches 100 percent once approximately 60.25 million ETH is staked, representing roughly 50 percent of the current circulating supply. At that threshold, validators would no longer earn rewards from the protocol's consensus-layer issuance, though they could still earn income from transaction priority fees and maximal extractable value (MEV). The change would be phased in over an 18-month transition period to minimize disruption and allow...