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Ethereum proposal targets zero issuance once staking hits a key threshold
The draft would phase in over about two years, burning newly issued validator rewards until net issuance is driven to zero when roughly 60.25 million ETH is staked.
A new Ethereum Improvement Proposal draft, EIP-8361, would gradually burn an increasing share of validator rewards as the amount of staked ETH rises, potentially pushing Ethereum’s net issuance to zero once a large staking threshold is reached, according to CoinDesk.
The proposal is designed to reach full burn at about 60.25 million ETH, which the article describes as roughly half of the total supply, with the rationale that ever-rising staking yields could encourage participation by large exchanges and staking providers, potentially weakening decentralization and security.
Under the plan, the burn would be phased in over about two years and would only apply to newly issued ETH, while transaction fees and tips earned by validators would remain unchanged. Validators would still be compensated in the normal way for validating transactions, but a growing portion of the block rewards would be destroyed permanently.
CoinDesk reports the proposal was submitted by six prominent Ethereum researchers, including Justin Drake of the Ethereum Foundation, and it landed days before the deadline for smaller changes ahead of Ethereum’s next network upgrade, Hegotá. The article also notes the burn would start months after the upgrade ships, with roughly six months before the full phased schedule begins.
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