⚪️ Ethereum staking debate heats up as researchers propose cutting rewards Ethereum researchers are pushing a new draft proposal that would reduce validator rewards if too much ETH gets staked. The goal is to slow dilution and keep ETH from becoming too dependent on liquid staking, but critics say the plan could hit solo validators and DeFi first.

➡️ What is being proposed

🟡 EIP-8363 would burn part of validator consensus rewards as staked ETH moves toward 60.25 million ETH, around 50% of current supply

🟡 If that threshold is reached, net consensus rewards could fall to zero, with the transition phased in over 18 months

➡️ Why researchers want it

🟡 More than 33% of ETH is already staked, and the authors argue that endless staking incentives create pressure to stake or be diluted

🟡 They also warn that liquid staking tokens could replace raw ETH as the main working asset inside the ecosystem

➡️ Why critics are against it

🟡 Lower rewards may hurt solo validators more than large institutions, because big players can survive on thinner yields

🟡 Aave founder Stani Kulechov says the proposal could weaken institutional demand for ETH and reduce DeFi borrowing activity

➡️ The real conflict

🟡 Supporters want Ethereum to become less dilutive and more neutral as a store of value

🟡 Critics say the change could make staking more centralized instead of less centralized

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