Ethereum Improvement Proposal EIP-8363, dubbed "Tapered Issuance Burn," would gradually reduce staking rewards until protocol issuance hits zero once 50 percent of ETH's total supply is staked.
Justin Drake of the Ethereum Foundation and Jerome de Tychey, co-founder of the Ethereum Community Conference, are among the authors. They argue Ethereum has achieved sufficient security, making additional staking incentives redundant, and that continued issuance dilutes holders who don't stake.
The proposal faces opposition from DeFi builders, staking providers and institutional investors, who contend it threatens network decentralization, could disrupt Ethereum's lending markets and undermines confidence in its monetary policy.
Ethereum currently has 41.5 million ETH staked—34.07 percent of total supply—according to the Ethereum Validator Queue. The network's staking yield stands at 2.67 percent.
Staking volume on Ethereum has increased 15 percent since the start of 2026, driven largely by institutional entrants including Bitmine and BlackRock.
Steve Berryman, head of client partnerships for Ethereum at Bitwise, said market forces are already sufficient to slow staking participation and projects a natural ceiling for staked ETH by year-end.
Berryman said current yields, falling toward 2 percent, are unlikely to attract substantial new ETH to staking, and that liquidity demand among market participants acts as a natural brake on growth.
He said once institutional players like Bitmine and BlackRock complete their initial staking allocations, participation rates will likely stabilize—pointing to a market-driven slowdown rather than a need for protocol-level issuance changes.
