Ethereum Proposal Targets Zero Net Issuance via Reward-Burn Curve

Woofun AI reports that Ethereum’s monetary policy faces a potential structural overhaul through EIP-8361, a proposal signed by six network researchers including Jérôme de Tychey, Stani Kulechov, and Mike Silagadze. The initiative seeks to neutralize staking inflation by implementing a reward-burn curve, targeting zero net issuance before the Hegotá fork deadline.

The technical framework mandates that a fraction of newly created ETH is permanently destroyed, with the burn rate growing linearly over time. This mechanism applies exclusively to newly minted tokens, allowing stakers to retain all transaction fees and tips. The curve is designed to reach zero net issuance when the circulating supply hits 60.25 million ETH, representing half of the total supply valued at $112 billion. The adjustment period spans 18 months, with a six-month ramp-up and two years to fully adapt, ensuring staking yields remain stable around 1.5%.

Woofun AI data shows current market conditions involve 70 million ETH in circulation, with 41 million ETH staked, accounting for 34% of the supply. An additional 2.5 million ETH sits in the activation queue. Stani Kulechov warns that this deflationary pressure could render most ETH lending strategies unviable, while Mike Silagadze notes that a 48-hour comment period could return tens of billions of dollars in ETH to the market.

The proposal faces a tight timeline, with only days remaining before the August 6 deadline for inclusion in the Hegotá fork. A 48-hour comment period is currently open for community feedback. If consensus is not reached, implementation may be pushed back to a later fork in the second half of 2026.