Fierce backlash to Ethereum’s EIP-8363 staking proposal

Ethereum researchers just wanted to reduce staking incentives. Instead, they sparked one of the biggest debates over the network’s economics since the Merge.

Ethereum Improvement Proposal EIP-8363, or “Tapered Issuance Burn,” would gradually reduce staking rewards as more and more Ether is locked up to secure the network — eventually cutting new protocol issuance to zero once 50% of ETH’s supply is staked.

Its authors, including Ethereum Foundation’s Justin Drake and Ethereum Community Conference (ETHCC) co-founder Jerome de Tychey, argue that Ethereum has reached the point where additional staking provides diminishing security returns, while diluting holders who choose not to stake.

In other words: Ethereum should stop paying for security it no longer needs.

There’s just one problem, a lot of people hate the idea.

From DeFi builders to staking providers and institutional investors, critics argue it could weaken decentralization, disrupt Ethereum’s lending markets and undermine confidence in the network’s monetary policy. As Ether.fi founder Mike Silagadze puts it:

“This is so disappointing on every level. [...] This is bad for decentralization, this is bad for Ethereum adoption, and this is bad for the credibility of the network.”