Six Ethereum researchers, including Justin Drake of the Ethereum Foundation, have submitted a draft proposal, informally designated as EIP‑8363, that would reduce consensus rewards for validators as the total amount of staked ether approaches 60.25 million ether, equivalent to about 50 % of the circulating supply. The plan would phase in a gradually increasing burn of rewards over an 18‑month period, reaching a 100 % reduction when the staking ratio reaches the threshold.

Current staking participation has risen to roughly 33 % of ether supply as of April, and the authors argue that continued growth could concentrate ether among large custodians and liquid staking providers, potentially undermining ether’s role as a neutral store of value. The draft proposes that issuance would peak at 0.5 % of the ether supply per year when staking is around 20 % of supply and would decline to zero as the staking ratio approaches the threshold.

The proposal has drawn criticism from developers, solo validators and DeFi founders, who warn that the reward cuts could make solo staking unprofitable, reduce institutional demand for ether and disrupt yield‑focused DeFi markets. Aave founder Stani Kulechov and Ether.Fi CEO Mike Silagadze said the changes could push out smaller validators and concentrate the validator set. In contrast, Grayscale’s head of research Zach Pandl said limiting staking incentives could be positive for ether’s price, and de Tychey, one of the proposal’s authors, said the policy would harden the two fundamentals of a store of value — maximal neutrality and minimal dilution.

The draft was published two days before the deadline for additional EIP submissions targeting the Hegota upgrade, but it has not been approved or scheduled for inclusion. The community has 18 months to review the proposal, with a broader selection process for Hegota expected to continue until November 8, and the upgrade likely to reach mainnet in the second quarter of 2027.