SharpLink co-founder opposes Ethereum's EIP-8361 proposal, stating that it weakens DeFi and is ill-timed.
2026.08.07 21:25:12
SharpLink co-founder Joseph Chalom has published a statement opposing Ethereum’s EIP-8361 proposal, dubbed “Tapered Issuance Burn”. He notes that the proposal would drastically reduce network staking rewards: as Ethereum’s staking ratio rises, validator rewards would be gradually burned, falling to zero when staked ETH reaches roughly half of the total supply. At that point, validators would only be able to operate on transaction tips, which currently make up around 15% of total rewards. Chalom warns this would weaken the DeFi ecosystem, erode ETH’s native yield advantage over Bitcoin, raise on-chain capital costs, and push some small and medium-sized staking operators out of the market. Chalom argues the proposal is particularly ill-timed, as Ethereum is currently seeing massive institutional adoption: examples include Robinhood building a new chain on Ethereum’s layer 2 network, BlackRock tokenizing its money market fund shares on-chain, and BNY Mellon integrating staking services into its custody platform via a partnership with Galaxy Digital. He states that SharpLink agrees ETH should become more scarce over time, but advocates achieving this goal through the existing base fee burn mechanism, rather than making fundamental changes to the protocol’s economic foundation at this stage. EIP-8361 calls for gradually increasing the burn rate of validator rewards as Ethereum’s staking ratio rises, bringing net issuance rewards on the consensus layer to zero when roughly 50% of ETH supply is staked, in order to eliminate incentives for further staking.
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