Aave and ether.fi founders push back on Ethereum staking reward burn proposal
A proposal to burn a growing share of Ethereum validator rewards has triggered a sharp backlash from some of the ecosystem's best-known DeFi and staking founders, including Aave founder Stani Kulechov and ether.fi CEO Mike Silagadze. The draft, first posted on Aug. 4 ahead of the Hegotá proposal deadline, would remove the incentive to stake beyond half of all ETH by scaling up reward burns as the staking ratio rises, with the burn reaching 100% at a saturation balance of 60.25 million ETH. At current staking levels, the authors say the measure would lower net consensus yield from roughly 2.6% to 1.2%, though they propose phasing it in over 18 months. Critics argue the mechanism would hurt solo stakers, create tax complications in jurisdictions that tax rewards on receipt, and pressure liquid staking and DeFi protocols tied to staking income. Kulechov said the design could cut validator income by 48% under one scenario, while Silagadze called the process and timing "disappointing on every level." Supporters of the proposal counter that Ethereum should not keep subsidizing unlimited growth in staked ETH and say the loudest critics are those with revenue most exposed to the change. The proposal, initially referred to as EIP-8361 and later corrected to EIP-8363, is expected to come up on Thursday's All Core Devs consensus call.
