PANews has published a commentary by 0xTodd criticizing EIP-8361, a proposal submitted by Ethereum France. The article says the proposal would significantly cut ETH staking APR and reduce rewards to 0 if the staking ratio exceeds 50%.
Proposal described as a sharp cut to staking returns
In the commentary, 0xTodd says Ethereum France is also the organizer of ETHCC and is part of Ethereum’s inner circle. The author calls EIP-8361 a meaningless proposal that would do more harm than good.
As presented in the article, the main effect of EIP-8361 would be to materially lower ETH staking returns. The author argues that Ethereum’s current system is operating normally and should not be changed lightly, especially when the proposal does not appear to address a core issue.
Author says current ETH staking yield is already low
The piece says the author has spent a long time participating in Ethereum staking. Citing Ebunker, it states that ETH staking currently yields only 2.4%, which the author says is less competitive than half the yield on U.S. Treasuries.
Based on that figure, the commentary argues that solo staking for ordinary Ethereum retail users can only barely cover operating costs and may even result in a small loss, leaving very limited profit. In the author’s view, many people still running solo staking are doing so out of strong long-term commitment.
Solo stakers seen as the most exposed group
0xTodd argues that if EIP-8361 were implemented, solo stakers would move straight into the danger zone. Institutional stakers, by comparison, have larger scale and fixed server costs, so the impact would not be the same.
The article adds that solo stakers are critical for a protocol like Ethereum because they represent the decentralization of the Ethereum ledger.
Pushback on churn rate concerns
The commentary also disputes concerns raised by Tychey’s chairman over validator entry and exit queues, or churn rate. It gives two reasons. First, the situation has already improved in the era of large nodes, at 2,048 ETH. Second, if churn rate needs to be adjusted, the author says it can be changed through a parameter update with limited risk.
By contrast, the article says a major reduction in Ethereum staking yield would also require a hard fork. According to the author, that would touch ETH’s core interests and could even create the possibility of a new token. The piece concludes by repeating that the proposal is meaningless.