Ethereum Foundation researcher Justin Drake and other community members submitted on August 4 the proposal EIP-8361, which would introduce a dynamic burn mechanism for staking rewards proportional to the ETH staking ratio. With approximately 41.4 million ETH staked (ratio of 33-34%), the net staking yield would drop from 2.6% to around 1.2%, reaching zero once 50% of ETH is staked. The proposal includes an 18-month transition period and builds on the architecture established by EIP-1559 in 2021. It aims to address centralization risks from liquid staking protocols like Lido and compensate for reduced fee burns on the execution layer due to migration to Layer 2 networks. Liquid staking protocols and validators could see their business model impacted, as this 1.2% yield would fall below US Treasury rates.
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