SharpLink co-founder Joseph Chalom has come out against Ethereum's EIP-8361 "Tapered Issuance Burn" proposal, warning it would sharply cut staking rewards and ultimately drive validator earnings to zero once staked supply reaches about half of the total. After that point, validators would rely mainly on transaction tips, which currently account for roughly 15% of their income. Chalom argues the change would weaken DeFi, remove ETH's native-yield advantage over Bitcoin, raise on-chain capital costs, and push smaller staking operators out. He also says the proposal is poorly timed, pointing to a wave of institutional adoption: Robinhood building a new chain on an Ethereum Layer 2, BlackRock tokenizing money market fund shares, and BNY Mellon adding staking to its custody platform via Galaxy Digital. SharpLink agrees ETH should become scarcer over time, but prefers the existing base fee burn mechanism over a fundamental overhaul of the protocol's economy at this stage.
SharpLink co-founder Joseph Chalom has publicly opposed Ethereum's EIP-8361, a proposal known as "Tapered Issuance Burn" that would significantly reduce network staking rewards. Chalom argues the plan would gradually destroy validator earnings as the staking ratio rises, eventually pushing rewards to zero once roughly half of ETH's supply is staked. At that point, validators would have to lean on transaction tips, which currently make up about 15% of their revenue.
He warns that this would weaken the DeFi ecosystem, strip ETH of the native yield that sets it apart from Bitcoin, raise the cost of capital on-chain, and force smaller staking operators out of the market.
Chalom also challenged the proposal's timing. Ethereum, he notes, is in the middle of a wave of institutional adoption: Robinhood is building a new chain on an Ethereum Layer 2, BlackRock has tokenized money market fund shares on-chain, and BNY Mellon has introduced staking to its custody platform through a partnership with Galaxy Digital. Making fundamental changes to the protocol's economic base at this stage, he said, is ill-advised.
SharpLink says it agrees that ETH should become scarcer over time, but believes the existing base fee burn mechanism is the right way to get there. The firm opposes overhauling the protocol's economic foundations for now.
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