Ethereum developers have proposed a mechanism that would gradually burn validator issuance as more ETH is staked, reducing net rewards to zero at roughly 50% of supply. Aave founder Stani Kulechov argues the plan could weaken institutional demand, DeFi activity and Ethereum’s competitiveness. Key Takeaways Ethereum developers proposed tapering validator issuance to 0% near a 50% staking ratio. Aave’s Stani Kulechov warns the 50% cap could hurt institutional staking and DeFi demand. Ethereum may phase the change over 18 months, with debate shaping its next network upgrade. Aave Founder Warns 50% Staking Cap Could Weaken ETH Demand Ethereum’s long-running debate over staking economics has taken a sharper turn, with developers proposing a new mechanism that would gradually eliminate validator issuance as the share of staked ETH approaches 50%.
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