Ethereum Proposal Seeks to Cap ETH Staking at 50% of Supply

A group of Ethereum contributors has proposed EIP-8361 as a way to reduce staking incentives to ensure that no more than 50% of the supply is locked up by validators.

That proposal has triggered a heated debate over whether Ethereum should prioritize lower issuance or maintain staking incentives for network participation and DeFi activity.

EIP-8361 Targets Rising Staking Levels

On August 4, Ethereum developer Jerome de Tychey announced the submission of EIP-8361, titled “Tapered Issuance Burn,” alongside contributors including Pintail, Dapplion, Pa7x1, Ladislaus0x, and Justin Drake.

In a series of posts on X, de Tychey argued that Ethereum’s current staking model has no point where incentives naturally slow down. He also noted that the staking ratio passed one-third of the ETH supply in April 2026 and continues to rise.

“The incentive to stake never switches off. Where does it stop? It doesn’t,” he wrote.

According to him, the current reward curve could lead to more than 70 million ETH being staked by January 2028, representing more than 55% of supply. He said the validator entry queue is already operating at maximum churn, adding around 1.75 million ETH per month under current conditions.

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