Ethereum developers have put forward a proposal called “Tapered Issuance Burn,” which would reduce validator rewards as the share of ETH staked rises and bring net ETH issuance to zero when staking approaches 50% of total supply. The author of the proposal said ETH staking moved above one-third of total supply in April, and cited Jerome de Tychey as saying that without changes, staked ETH could top 70 million coins by January 2028, or more than 55% of supply. Supporters say excessive staking could first erode the economics for smaller independent validators and push more activity toward custodians and large staking providers. The rollout under discussion would span 18 months, with another roughly six months set aside before a possible network upgrade. Aave founder Stani Kulechov said taking rewards to zero above a 50% staking ratio could hurt institutional staking demand and DeFi activity by making returns less predictable. He added that ETH lending strategies could also be affected. The proposal remains at an early stage, according to Bitcoin.com News.
Ethereum developers have proposed a mechanism called “Tapered Issuance Burn” that would gradually burn part of validators’ idealized duty rewards as the share of ETH staked increases. If staking approaches 50% of total supply, net ETH issuance would fall to zero.
Proposal responds to rising staking participation
The proposal’s author said the share of ETH staked moved above one-third of total supply in April. Citing Jerome de Tychey, the author said that without an adjustment, staked ETH could exceed 70 million by January 2028, representing more than 55% of supply.
Backers say excessive staking could increase concentration
Supporters of the idea argue that excessive staking could first make it uneconomic for smaller independent validators, which in turn could push staking activity toward custodians and large service providers. Under the current outline, the plan would be rolled out over 18 months, with another roughly six months reserved ahead of a potential network upgrade.
Aave founder flags pressure on institutional staking and DeFi
Stani Kulechov, founder of lending protocol Aave, said that if rewards drop to zero once staking rises above 50%, uncertainty around returns could weaken institutional staking demand and DeFi demand. He also said ETH lending strategies could be affected. The proposal is still at an early stage, according to Bitcoin.com News.
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