Ethereum Developers Float Reward‑Burn Curve to Offset Rising Staking and Push Net Issuance Toward Zero
TL;DR
- A proposal submitted by six Ethereum researchers suggests progressively burning validator rewards as staked ETH grows.
- The mechanism would bring net issuance to zero when staking reaches around 60.25 million ETH, equivalent to roughly half of the total supply.
- The proposal arrived days before the August 6 deadline to be considered in Hegotá, Ethereum’s next upgrade, and faces strong resistance from the DeFi ecosystem.
Ethereum could radically transform its monetary policy if a proposal signed by six network researchers moves forward, including Justin Drake from the Ethereum Foundation.
The draft, catalogued as EIP-8361, proposes burning a growing portion of the rewards received by validators as the amount of staked ETH increases, until net issuance is completely eliminated when staking reaches 60.25 million ETH, a figure equivalent to approximately half of the total supply. At the current exchange rate, that threshold stands at around $112 billion.
The mechanism operates every 6.4 minutes, at the close of each epoch: instead of paying out the full reward generated, a fraction is permanently destroyed. That fraction grows linearly until it reaches 100% when staking hits the saturation point. Validators retain all transaction fees and tips earned from building blocks; only newly created Ethereum is subject to the burn. The transition is designed to unfold over 18 months, with a prior period of six months while the upgrade is deployed, giving participants roughly two years to adapt.
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