SharpLink Co-founder Opposes Ethereum EIP-8361 Proposal, Citing Risks to DeFi and Poor Timing

Odaily News – SharpLink co-founder Joseph Chalom has voiced opposition to Ethereum's EIP-8361 proposal, "Tapered Issuance Burn." He noted that the proposal would significantly reduce network staking rewards. As Ethereum's staking ratio rises, validator earnings would be progressively burned until rewards drop to zero once the staked amount reaches roughly half of the total supply. At that point, validators would have to rely solely on transaction tips, which currently account for about 15% of their income. This, he argued, would weaken the DeFi ecosystem, strip ETH of its native yield advantage over Bitcoin, raise on-chain capital costs, and drive some smaller and mid-sized staking operators out of the market.

Chalom believes the timing of the proposal is particularly unfavorable, as Ethereum is currently seeing large-scale institutional adoption—including Robinhood building a new chain on an Ethereum Layer 2 network, BlackRock tokenizing its money market fund shares on-chain, and BNY Mellon partnering with Galaxy Digital to bring staking services to its custody platform. He stated that while SharpLink agrees ETH should become scarcer over time, it advocates achieving this through the existing base fee burn mechanism, and opposes making fundamental adjustments to the protocol's economic foundation at this stage. EIP-8361 proposes gradually increasing the burn ratio of validator rewards as the ETH staking ratio rises, reducing consensus layer net issuance rewards to zero when approximately 50% of the supply is staked, in order to eliminate further staking incentives.