Ethereum Researchers Float EIP-8361 to Phase Out Staking Issuance Once 50% of ETH Is Staked

Ethereum researchers have published EIP-8361, a draft proposal that would progressively burn a larger share of validator rewards as staking participation rises, potentially reducing new ETH issuance to zero when roughly 60.25 million ETH are staked—about half of today's circulating supply. Dubbed "Tapered Issuance Burn," the proposal would change how rewards tied to validator duties—attestations, block proposals, and sync committee work—are handled. Instead of paying out the full computed reward, the protocol would automatically burn a portion based on the percentage of total ETH that is staked. The burn rate would climb as the staking ratio increases, reaching a full-burn state at around 60.25 million staked ETH, at which point issuance from validator rewards would fall to zero. The draft was submitted by researchers including Jérôme de Tychey, Justin Drake, dapplion, pintail, pa7x1, and Ladislaus von Daniels. It is currently being discussed as a Core EIP and would require further review before any potential adoption. Authors argue Ethereum's current issuance curve still delivers a baseline yield even at very high staking levels—citing about 1.5% annual rewards when staking participation is extremely high—meaning there is no natural level at which issuance stops incentivizing additional staking. They note Ethereum's staking ratio has already moved past one-third of supply and estimate staked ETH could exceed 70 million by January 2028 if validator demand remains strong and withdrawals stay limited. EIP-8361 preserves performance-based incentives by keeping higher rewards for validators that successfully complete duties versus those that do not, though part of the "ideal" reward would be redirected to the burn. The plan also includes an 18-month transition period, starting with a temporary increase in Ethereum's base reward factor from 64 to 128 to keep staking returns near current levels before gradually shifting to the new issuance curve.