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Ethereum
2026-08-24 14:33:55

EIP-8363 model says Ethereum would cut staking rewards, not erase issuance

A quantitative review by IOSG researcher Mario Chow argues that EIP-8363 would not drive Ethereum issuance to zero at current staking levels, but would instead cut it roughly in half while reducing validator yields and shifting value away from staking intermediaries. The proposal would burn a growing share of validator rewards as the staking ratio rises, reaching a 100% burn at 50% of ETH supply staked. Based on the model in the report, with about 42.2 million ETH currently staked, issuance would fall 58.6% and staking APR would drop 56.4%. The report says that translates into 633,000 ETH less annual dilution, worth about $1.55 billion per year, or 0.53% of ETH market capitalization. The paper also argues that Ethereum’s fee-burn mechanism has lost most of its force. It says EIP-1559 destroyed 1.48 million ETH in 2022, but only 25,660 ETH over the past 12 months, offsetting just 2.4% of annual issuance. In the author’s reading, that leaves issuance policy as Ethereum’s last effective lever over supply. On market impact, the study says it found no detectable relationship between staking yield changes and ETH price performance over a 43-month window from January 2023 to July 2026. It does, however, say supply growth has a somewhat stronger, though still statistically insignificant, connection. The report’s final view is mildly bullish on ETH itself, negative on staking middlemen such as LST and LRT infrastructure, and skeptical that the proposal can pass governance because losses are concentrated while benefits are diffuse.

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EIP-8363 model says Ethereum would cut staking rewards, not erase issuance
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