Ethereum Developers Submit EIP-8361 to Introduce Tapered Issuance Burn

Ethereum developers have submitted a new proposal that would gradually reduce validator rewards as more ETH enters staking. The draft, known as EIP-8361, introduces a reward burn mechanism designed to remove staking incentives once about half of Ethereum’s supply is actively staked. The proposal is now awaiting community review before any decision on future network inclusion.

EIP-8361 Proposes New Validator Reward Model

A group of Ethereum researchers, including Jérôme de Tychey, Justin Drake, dapplion, pintail, pa7x1, and Ladislaus von Daniels, submitted the draft Core EIP for review.

The proposal, called Tapered Issuance Burn, would burn part of the rewards earned by validators for attestations, block proposals, and sync committee participation.

Under the proposed model, the burn rate would increase as Ethereum’s staking ratio rises. The burn would eventually reach 100% when approximately 60.25 million ETH is actively staked, a level representing about half of the current ETH supply.

As staking grows, validator yields would gradually decline instead of remaining at a fixed minimum level.

The authors wrote that “the current issuance curve continues offering a yield of around 1.5% even if nearly all ETH is staked.” They added that “the remaining yield floor provides no point at which issuance stops encouraging additional staking.”

Transition Plan and Community Discussion

The proposal includes an 18-month transition period instead of introducing the permanent reward curve immediately. During the initial stage, Ethereum’s base reward factor would increase from 64 to 128 before gradually returning to its current level.

The authors said this approach would keep validator yields close to existing levels before shifting toward the new issuance model.

The draft would apply the revised reward curve from the day of activation. Annual issuance would peak at around 0.5% of the ETH supply when staking reaches roughly 20%, before declining to zero as staking approaches the proposed 50% threshold.

Ethereum’s staking ratio passed one-third of the total supply earlier this year. The proposal estimates that more than 70 million ETH could be staked by January 2028 if validator demand remains strong.

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