Think ETH is about to shoot itself in the foot. Why? The latest EIP, called Tapered Issuance Burn, wants to change ETH staking rewards. Right now, Ethereum pays stakers no matter how much of the supply gets staked. There's a floor of around ~1.5%. This EIP kills that floor. As the staking ratio climbs toward 50% of supply, the protocol burns a growing share of validator rewards. At 50% staked, net issuance hits ZERO. Rewards go from ~2.6% to an estimated ~1.1%, phased in over about 18 months. Personally, I'm against this. But before I get into why, the other side deserves a fair hearing. Steelmanning the pro-EIP case 1. Inflation. A floor that never hits zero is a ~0.85%/year tax on every unstaked ETH, forever. High inflation = bad money. 2. LSTs replace ETH. Keep rewards this high and eventually every ETH gets staked and wrapped. stETH becomes money instead of raw ETH. 3. The incentive to keep staking never turns off, and that's a bug. Past a certain point, more staked ETH doesn't buy more security. It just concentrates stake, because the only players who can keep piling in at low yields are the ones with the deepest pockets: exchanges, custodians, BlackRock-scale operators. So I get why researchers who care about ETH's monetary integrity are drawn to this. The current reward curve never had much research or data behind it anyway. But they're out of touch with reality. 1. This is disastrous for DeFi because Staking yield is the base rate everything in DeFi prices off. Lending rates, the wstETH/ETH loop, the cost of borrowing against ETH collateral, all of it references that staking rate as the floor. Taper it to zero and the loops that generate most of ETH's borrow demand invert overnight. Borrow demand collapses, LSTs lose their edge over plain ETH, utilization drops, and lenders earn less. You're not adjusting an isolated rate. You're pulling the floor out from under every product built on top of it. The proposal never even considers DeFi. 2. Institutions bet billions on the current rate. BlackRock, Fidelity, and ETH treasuries like SharpLink and BitMine all allocated based on today's staking rate. Change the rules mid-game through a contentious proposal and you inject uncertainty into the whole asset. Cryptopolitan Institutions want yield on their assets. They don't care if it comes from inflation. Kill the yield and that capital looks elsewhere. The concentration argument doesn't make sense imo. A 0% floor doesn't spread out the validator set. A CEX staking desk or an institutional custodian can run near break-even and wait it out. A home staker paying retail power and hardware costs can't. This prices out the exact solo operators the EIP claims to protect. You end up with a handful of institutions running Ethereum which is a security nightmare. Even if the issuance curve needs to change someday, the timing is wrong. They submitted this days before the EIP deadline for the next upgrade, Hegotá. Rushing a monetary policy change of this size, right as crypto and TradFi are finally converging, is shooting yourself in the foot. Someone told me eth was gonna be $10k, I dunno anymore.(Edgy - The DeFi Edge 🗡️)