SharpLink CEO Joseph Chalom has opposed an Ethereum proposal that would eliminate issuance‑based staking rewards, arguing that the change could weaken institutional appeal and increase capital costs in decentralized finance.

Chalom said the proposal, identified as EIP‑8361, would burn a growing share of consensus‑layer rewards as the amount of staked ETH rises, reaching 100% when about 60.25 million ETH — roughly half of the current supply — is staked.

The proposal includes an estimated 18‑month transition intended to avoid an immediate decline in validator returns.

According to Chalom, current staking yields about 2.75% and transaction fees account for roughly 15% of total validator rewards, leaving operators heavily dependent on newly issued ETH.

SharpLink stakes nearly all of its ETH and has earned more than 18,000 ETH in cumulative rewards from nearly 900,000 ETH staked as of April.

The company committed $100 million to a $125 million on‑chain yield fund managed by Galaxy Digital, which plans to deploy capital across DeFi liquidity protocols while preserving SharpLink’s ETH exposure.

Chalom warned that reducing issuance rewards to zero could raise the effective cost of capital, make returns negative after expenses, and prompt collateral to move toward assets that continue producing yield.

He added that native yield provides ETH with an institutional advantage over Bitcoin, which offers only price exposure and no protocol‑native returns.

The proposal’s authors argue that the current issuance curve continues to provide a 1.5% yield even when nearly all ETH is staked and that the transition period mitigates an abrupt drop in returns.

Grayscale, the first U.S.‑listed Ethereum exchange‑traded product, began distributing staking rewards to shareholders in January, delivering approximately $9.4 million in cash from staking activity.

The debate over the proposal is expected to continue as developers consider whether to advance it toward a future network upgrade.

The proposal remains a draft and has not been approved for inclusion in an Ethereum upgrade.