BlockBeats news, on August 7, Joseph Chalom, co-founder of SharpLink, published a post opposing Ethereum’s EIP-8361 proposal, “Tapered Issuance Burn.” He noted that the proposal would significantly reduce network staking rewards; as Ethereum’s staking ratio increases, validator rewards would be gradually burned until they reach zero when staking volume approaches approximately half of the total supply. At that point, validators would rely solely on transaction tips, which currently account for about 15% of revenue, to sustain operations. This would weaken the DeFi ecosystem, strip ETH of its native yield advantage over Bitcoin, increase on-chain capital costs, and lead to the elimination of some smaller and medium-sized staking operators.
Chalom believes the timing of this proposal is particularly unfavorable, as Ethereum is currently experiencing widespread institutional adoption—including Robinhood building a new chain on Ethereum’s Layer 2, BlackRock tokenizing its money market fund shares on-chain, and BNY Mellon integrating staking services into its custody platform through a partnership with Galaxy Digital. He states that SharpLink agrees that ETH should become scarcer over time, but advocates achieving this through the existing base fee burn mechanism, opposing any fundamental adjustments to the protocol’s economic foundation at this stage.
EIP-8361 proposes gradually increasing the proportion of validator rewards burned as the ETH staking ratio rises, aiming to bring the net issuance reward on the consensus layer to zero when approximately 50% of supply is staked, thereby eliminating further incentives to stake.