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New EIP-8361 proposal would burn more validator rewards as staking rises
The draft would cut net consensus-layer issuance to zero at a 50% staking ratio by destroying a rising share of validator rewards as total active balance increases.
Ethereum researchers have published a new proposal that would change how staking rewards are issued, using a mechanism to burn an increasing fraction of validator rewards as more ETH is staked.
The draft, EIP-8361, titled Tapered Issuance Burn, is designed so that net consensus-layer issuance reaches zero at a 50% staking ratio. According to the proposal, about 33% of ETH is staked today, roughly 40 million ETH, while the consensus layer pays about 1,054,000 ETH per year, or 2.62%.
If implemented as described, each validator would face a deduction sized as a fraction of the idealized reward for each duty it is assigned, and the deducted ETH would be destroyed. The burn fraction is linked to total active balance, using a parameter called SATURATION_BALANCE set at 60,250,000 ETH, about half of the current 120.7 million ETH supply, with the burn capped at 100%.
The authors argue the approach removes the staking “floor” that would otherwise keep yield from falling further, letting the market set the staking level where net yield matches stakers’ required premium for liquidity, slashing, operational and regulatory risk. The draft also notes issuance is expected to account for at least 93% of staking yield, with execution-layer rewards contributing at most 0.20%.
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