A group of Ethereum researchers has put forward a new technical proposal that would gradually eliminate staking issuance on the network. EIP-8361, published this week, calls for cutting the annual staking reward rate to 50% of current levels, with a path toward zero. The idea is to reduce Ethereum's inflation and eventually stop new ETH from being minted for staking altogether.
But the proposal is already drawing sharp criticism. Opponents argue that slashing staking rewards would disproportionately hurt smaller, independent validators who rely on that income to cover operational costs. Large staking operators, with economies of scale, could absorb the change more easily — potentially leading to greater centralization of the network's validator set.
How the issuance cut would work
EIP-8361 doesn't set a hard date for ending staking rewards. Instead, it proposes a formula that reduces the annual issuance rate by half from its current target. The researchers behind the EIP argue that as Ethereum's transaction fee revenue grows, stakers can be compensated through fees rather than new issuance. They see the change as a natural evolution toward a more sustainable economic model.
The proposal is still in early discussion stages. It would need to go through the standard Ethereum improvement process, including community feedback, testing, and a core developer decision before any code is deployed on mainnet.
Centralization concerns
The most immediate worry is what happens to the roughly 1 million validators currently securing the network. Many of them run solo staking setups from home or small data centers. If staking rewards drop to near zero, those operators may find it unprofitable to continue. Large staking pools and exchanges, which can spread costs across thousands of validators, would be far less affected.
That dynamic could concentrate staked ETH into fewer hands. A more centralized validator set raises the risk of coordinated attacks or censorship, since a small number of entities would control a majority of the network's economic weight. The researchers acknowledge this risk in the EIP's discussion thread, but they argue that the long-term benefits of lower inflation outweigh the short-term centralization pressure.
Security implications for the network
Independent validators play a key role in Ethereum's security model. They're geographically distributed and run diverse client software, making the network harder to attack. If EIP-8361 drives them away, the remaining validators would be more homogeneous — both in hardware and jurisdiction. That could make Ethereum more vulnerable to targeted attacks or regulatory pressure.
Some community members have already called for alternative approaches, such as keeping issuance but redirecting it to fund public goods or reducing the minimum staking requirement to lower the barrier for small operators. No counter-proposal has been formally submitted yet.
What happens next
The EIP is set to be discussed at the next All Core Developers call, scheduled for later this month. No timeline for a vote or implementation has been proposed. The debate over EIP-8361 is likely to intensify as more validators weigh in — especially those who would feel the financial pinch first.
