Ethereum Lags Recovery as EIP-8361 Proposal Aims to Reshape ETH‘s Economic Model
Ethereum‘s recovery continues to trail behind Bitcoin‘s, with ETH trading at $1,870.11, up just 0.52% over the past 24 hours. The underperformance comes as the Ethereum community proposed EIP-8361, titled “Tapered Issuance Burn,” designed to optimize ETH issuance mechanisms and address inflationary pressure and centralization risks caused by rising staking participation. ETH staking has now exceeded one-third of total supply. The proposal introduces dynamic burning of validator rewards based on staking levels, with net staking returns gradually declining to zero when the staking ratio reaches approximately 50%. This aims to prevent excessive staking growth, reduce supply dilution, and limit concentration of staking power among large institutions. Combined with EIP-1559 and Blob fee burn mechanisms, ETH may enter net deflation more frequently in the future, potentially shifting its positioning from a yield-generating staking asset toward a store-of-value asset and prompting a reassessment of ETH‘s long-term economic model. The proposal has divided builders and added a new variable to the market outlook, with ETH currently compressing below a descending trendline near $1,868.
