Ethereum Withdraws Staking-Reward Burn Proposal From Hegota Upgrade Review

Ethereum’s EIP-8363, which would have burned part of validator rewards, has been withdrawn from consideration for the network’s next upgrade, Hegota. The broader debate over Ethereum’s issuance policy and staking-reward structure is set to continue through a separate process.

Crypto outlet The Block reported on October 1 that EIP-8363 co-author Jerome de Tychey, president of Ethereum France, wrote on X that the proposal was being withdrawn from Hegota review.

De Tychey wrote that during Hegota’s consideration-for-inclusion, or CFI, process, many industry participants and core protocol and client contributors argued that changes to issuance policy should not be handled while defining the scope of a hard fork. He added that the authors agreed with that view and decided it was better to withdraw the proposal now rather than keep pushing for its inclusion in Hegota.

Interest in EIP-8363 was still high. De Tychey said it became one of the most-commented-on EIPs in the history of the Ethereum Magicians forum.

EIP-8363 is the “Tapered Issuance Burn” proposal introduced in August by Ethereum Foundation researcher Justin Drake, Pintail and de Tychey. It was designed so that the share of validator rewards burned would rise as the amount of staked Ethereum increased.

Under the proposal, validator rewards would be fully burned if 60.25 million ETH, roughly half of Ethereum’s total supply, were staked. The change was to be phased in over about 18 months. As of mid-August, about 34% of all Ethereum was staked, a level at which the annual consensus yield was estimated to fall to 1.2% from about 2.6%.

The proposal also drew backlash. SharpLink Chief Executive Officer Joseph Chalom said in August that EIP-8363 would “weaken DeFi,” while Aave founder Stani Kulechov criticized it as “harmful to Ethereum.” Kulechov later called the withdrawal “a good decision.”

The withdrawal does not end the debate over issuance policy. De Tychey said concerns remain valid that a high staking ratio could threaten Ethereum’s security, neutrality, resistance to capture and monetary function. He said a separate process would be created to discuss issuance policy, with support from Lido Finance.

A timeline has also been outlined. The plan is to hold an issuance policy forum at Devcon in November, followed by workshops, and then seek consensus among core developers at EthCC in April 2027. Supporters then plan to pursue CFI or secured-for-inclusion, or SFI, status again.

Separately, Ethereum co-founder Vitalik Buterin said in a recent blog post that Hegota could be the last “normal” hard fork that remains an extension of Ethereum in its current form. He said more fundamental technical changes could follow after that, including recursive STARKs, automated formal verification, more advanced consensus algorithms and quantum-resistant design.