Aave Founder Criticizes EIP-8361 for Undermining ETH's Asset Appeal

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Aave founder Stani Kulechov criticized the ETH update EIP-8361, calling it a threat to ETH’s narrative and asset appeal. He argues that capping staking rewards at 0% once staked ETH reaches 50% of total supply would make returns unpredictable, potentially deterring both institutional and retail stakers. Kulechov warns that zero returns could disrupt ETH lending strategies, harming DeFi and driving users toward stablecoins. EIP-8361 was submitted by Jerome de Tychey and others.

Aave founder Stani Kulechov believes that the newly submitted EIP-8361 "Tapered Issuance Burn" proposal would undermine ETH's asset appeal rather than achieve its intended goal.

He noted that the proposal would reduce the Ethereum staking reward cap to 0% when staked supply exceeds 50% of the total supply, making staking yields unpredictable and potentially uneconomical, which would be detrimental to both institutional investors and individual stakers planning to hold ETH.

Stani Kulechov also noted that if yields drop to zero, ETH lending strategies would become largely unviable, impacting lending and yield applications around ETH in DeFi, potentially prompting some holders to shift to other yield-bearing assets such as stablecoins.

EIP-8361 was jointly submitted by Jerome de Tychey and several other developers.

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