Ethereum floats "Tapered Issuance Burn" EIP to rein in staking-driven inflation

ChainCatcher reports that the Ethereum community has put forward a new improvement proposal, EIP "Tapered Issuance Burn," seeking to tweak ETH issuance to curb centralization and dilution risks linked to an overly high staking ratio. The proposal says ETH staking exceeded one-third of total supply in April 2026 and has continued to climb. Under today's issuance curve, staking yields would still sit above roughly 1.5% even in an extreme scenario where all ETH is staked, leaving no effective "shutdown" for staking incentives. To address this, the EIP would burn part of validators' theoretical rewards each epoch, with the burn rate rising as the staking ratio increases. At around a 50% staking rate, net staking rewards would gradually fall to zero. Backers argue the design would cap the ongoing expansion of ETH supply, ease dilution for holders, discourage excessive staking concentration among custodians and staking providers, and help maintain ETH's role as a neutral asset and store of value. Under the tapered model, issuance is expected to peak when staking is about 20%, with annual issuance around 0.5%, then decline toward zero as staking approaches 50%. Combined with EIP-1559 and blob fee burning, the proposal suggests ETH could enter deflation more frequently going forward. The authors stress the change is not aimed at individual stakers. Instead, it targets what they see as long-term dilution embedded in the current issuance curve, pushing staking rewards to be set by market risk premiums rather than fixed, algorithmic incentives.