Ethereum Improvement Proposal 8363, dubbed "Tapered Issuance Burn," seeks to gradually reduce staking rewards as more Ether is locked to secure the network. Under EIP-8363, protocol issuance would cease entirely once 50 percent of ETH's total supply is staked.
Ethereum Foundation researcher Justin Drake and Ethereum Community Conference co-founder Jerome de Tychey authored the proposal. They argue Ethereum has reached optimal security saturation and that continued issuance dilutes non-stakers.
On-chain data shows approximately 41.5 million ETH staked—34.07 percent of total supply—earning validators 2.67 percent annual yield. Staking has grown 15 percent since the start of 2026.
DeFi builders, staking providers, and institutional investors have opposed the plan, warning it could weaken network decentralization and disrupt lending markets dependent on liquid staking derivatives. Critics also cite concerns about the precedent of deliberately capping monetary supply.
Ether.fi founder Mike Silagadze voiced strong opposition. Bitwise's head of client partnerships for Ethereum, Dr. Steve Berryman, argued that market forces alone will naturally slow staking participation. He expects yields falling toward 2 percent will create a "natural ceiling probably by the end of this year," as liquidity-conscious participants stop staking.
Berryman attributed recent staking growth to institutional entrants including Bitmine and BlackRock. Once these players complete allocations, he predicted participation growth will plateau without protocol intervention.
