Ethereum developers are weighing a proposal that would burn a growing share of validator rewards, with net issuance falling to zero once roughly half of all ETH is staked. The proposal, EIP-8363, was drafted on Aug. 4 and discussed on the Aug. 6 All Core Devs consensus call, but it hasn't been accepted into any network upgrade — and its authors are considering pulling it.
How the taper works
The core idea is a burn fraction, defined as b = (D / SATURATION_BALANCE)^1.5, where D is the total amount staked and SATURATION_BALANCE is set to 60,250,000 ETH — about 49.4% of current supply. At that point, b equals 1, meaning the entire consensus layer reward gets burned and net yield goes to zero. The 1.5 exponent keeps the absolute deduction growing linearly with the staking ratio, so net issuance tapers to zero in a straight line rather than asymptotically. Total annual issuance actually peaks when roughly 19.8% of supply is staked, then declines.
Validators take the hit
Notably, the deduction is calculated based on perfect validator performance, not actual performance. That means penalties for offline validators remain at full magnitude while net earnings fall. The time it takes to recover from an outage increases by roughly 3.8 times at current staking levels — a detail that could give operators pause.
As of Aug. 7, Ethereum had about 41.78 million ETH staked out of a 121.93 million supply, or 34.3%. Under the proposal's formulas, that would mean a burn fraction of 57.7% and a gross consensus layer yield of 2.5%.
Who wrote it, and who didn't
The proposal lists six authors: pintail, Jérôme de Tychey, dapplion, pa7x1, Ladislaus von Daniels, and Justin Drake (listed last). Media reports have often misattributed it to Drake or the Ethereum Foundation, which isn't accurate — Drake is one of several authors, and the foundation itself isn't a named author.
EIP-8363 is still in Draft status. It didn't receive 'proposed for inclusion' status for the Hegotá network upgrade, and the next step, according to the authors, is to consider withdrawing it. The proposal also contrasts with an earlier June 2026 idea called 'Validator Redirected Revenue' — that one would have redirected burned ETH to a treasury or public goods, while EIP-8363 simply destroys it.
Where it stands now
The fact that it was discussed on the All Core Devs call suggests it's at least on the radar, but without PFI status, it's not heading into Hegotá. The authors haven't formally withdrawn it yet, but that's the explicit next step they're weighing. So for now, the proposal remains a proposal — and a controversial one, given how directly it hits validator returns.
