Ethereum community members have filed a new improvement proposal, EIP "Tapered Issuance Burn," that would overhaul the network's ETH issuance schedule. The stated aim: reduce the centralization and dilution risks that come with an exceptionally high staking ratio.
Staking passes one-third of supply
According to the proposal, the share of ETH staked crossed one-third of total supply in April 2026 and is still climbing. Under the current issuance curve, even if every ETH were staked, yields would not drop below roughly 1.5%. In the authors' view, that means staking incentives lack a built-in shut-off mechanism.
Burn ratio rises with staking scale
The EIP calls for burning a portion of validators' theoretical rewards in each epoch. The burn ratio increases in step with the staked share of supply. When the staking ratio reaches about 50%, net staking income would gradually fall to zero.
The proposal cites three expected benefits: limiting the ongoing expansion of ETH supply and easing dilution pressure on holders; preventing staking from concentrating further in custodians and staking service providers; and preserving ETH's role as a neutral asset and store of value.
Peak issuance, then deflation
Under the tapered design, ETH issuance would peak when the staking ratio stands at roughly 20%, with annual issuance around 0.5%. Issuance would drop to zero at a 50% staking ratio. Combined with the burn mechanisms in EIP-1559 and blob fees, the proposal argues, ETH supply could enter deflationary stretches more frequently.
The authors stress the plan is not aimed at individual stakers. It seeks to fix the long-term dilution embedded in the current issuance curve, so staking returns are ultimately set by market risk premiums rather than a fixed algorithmic incentive.