A new Ethereum Improvement Proposal, “Tapered Issuance Burn,” has been submitted to the Ethereum community to change ETH issuance and address the centralization and dilution risks tied to a high staking ratio.
The proposal says ETH staking exceeded one-third of total supply in April 2026 and has continued to grow. Under the current issuance curve, staking yield would still stay above about 1.5% even if all ETH were staked, leaving staking incentives without what the proposal describes as a shutoff mechanism.
The proposal would burn part of validator rewards
The EIP would burn part of validators’ theoretical rewards in each epoch. That burn share would rise as the staking base gets larger. Once the staking ratio reaches about 50%, net staking yield would gradually fall to zero under the design.
What the proposal is trying to fix
The proposal lays out three main goals:
- limit continued expansion of ETH supply and reduce dilution pressure on holders;
- prevent staking from becoming overly concentrated in custodians and staking service providers;
- preserve ETH’s role as a neutral asset and a store of value.
Issuance peak and possible deflation
According to the design, ETH issuance would peak when the staking ratio is around 20%, with annual issuance at about 0.5%. It would then decline, reaching zero when the staking ratio hits 50%.
The proposal also says that, when paired with EIP-1559 and blob fee burns, ETH supply could move into deflation more frequently in the future.
Author’s note
The proposal’s author said the mechanism is not aimed at solo stakers. Instead, it is meant to correct the long-term dilution issue created by the current issuance curve, so that staking returns are ultimately determined by market risk premium rather than fixed algorithmic incentives.