The authors of EIP-8361 propose a mechanism called Tapered Issuance Burn—a gradual burn of a portion of the issuance to eliminate incentives for staking more than 50% of the total ETH supply. According to their argument, the current issuance curve encourages an unlimited increase in the number of validators rather than reaching a natural market equilibrium: even if all ETH were staked, staking yields would not fall below approximately 1.5% annually.
According to the proposal, Ethereum crossed the threshold of one-third of the total staked supply in April 2026 and continues to grow. The validator onboarding queue is now operating at full capacity, adding about 1.75 million ETH per month. If current trends persist, over 70 million ETH (more than 55% of the supply) could be staked by January 2028.
The mechanism works as follows: instead of directly adjusting rewards every epoch, a growing share of the idealized validator rewards is burned until it reaches 100% as the system approaches the saturation point of around 50% of the supply—thus, yields will linearly tend toward zero as this share increases. Implementation is planned to be smooth: roughly 18 months for the phased reduction in yields, plus about 6 months for preparing for the fork—totaling nearly two years for validators to adapt.
Supporters call this move a reinforcement of Ethereum’s monetary neutrality by limiting long-term dilution and excessive concentration in staking. Whether the proposal will gain broad community support remains an open question.