Ethereum’s staking contract has never had an off switch. A proposal filed days before the Hegotá inclusion deadline would build one.
Six researchers, including Justin Drake of the Ethereum Foundation, want validator rewards burned on a sliding scale as staking grows. Hit roughly 60.25 million ETH staked, about half the total supply, and the burn reaches 100%. Net issuance goes to zero.
That’s the part worth sitting with. Not a fee tweak, not a client optimization. A cap on the number of ETH that will ever be created, enforced by the same mechanism that pays the people securing the chain.
How the burn actually works
Every 6.4 minutes, at the close of what Ethereum calls an epoch, a fraction of each validator’s rewards gets deducted and destroyed instead of redirected somewhere else. That fraction climbs linearly toward 100% as staking approaches the saturation point.
Validators keep doing identical work and get paid the same way. They keep every transaction fee and tip they earn building blocks. Only the newly created ETH burns.
And it doesn’t land all at once. The deduction phases in over 18 months, with roughly six months before that while the upgrade ships. Call it two years to adjust.
The argument: staking never stops paying
Here’s the authors’ framing. Even if every last ETH were staked, the yield would still sit near 1.5%. There’s always a reason to add more.
Jérôme de Tychey, one of the proposal’s authors, projects more than 70 million ETH staked by January 2028 if nothing changes.
Past a certain level, the proposal states, extra stake makes Ethereum less secure rather than more. The ETH ends up parked with exchanges and staking providers instead of the people who own it, and small individual stakers get squeezed out.
The queue tells its own story
About 41 million ETH is staked today, close to 34% of supply. Another 2.5 million sits in the entry queue waiting to be activated, trackers show. The wait runs six weeks or more.
Nobody is queuing to leave.
Ethereum throttles how fast validators can join or exit, so both directions form a line. The cap exists so a large bloc can’t pile in or bail out fast enough to destabilize the network. About 57,600 ETH a day can currently activate.
Where the pushback is coming from
The proposal has split Ethereum’s developers and market participants, and the objections aren’t abstract.
Aave Labs chief executive Stani Kulechov said in a blog post that pushing staking rewards toward zero would make ETH borrowing strategies mostly unviable. Much of the ETH borrowed on Aave gets used to buy more staked ETH, data shows. That trade only works while staking yields more than the loan costs.
Mike Silagadze, founder of liquid staking protocol ether.fi, went after the process as hard as the substance.
“EIP released with 48 hours notice for comments,” he wrote on X, calling it “a major network economics change with far reaching implications for all of DeFi.”
Silagadze added the change would “self evidently push out solo stakers who aren’t subsidized by the EF or others” and hand staking to “large centralized entities with zero cost of capital.” He said “seven of the top 10 DeFi protocols” would face a capital exodus.
On price, he was blunter. “People who stake ETH don’t sell it,” he wrote, arguing the proposal “will halt any new ETH getting staked” and could push tens of billions of dollars of ETH back into circulation.
Why it probably misses Hegotá
Hegotá is Ethereum’s next network upgrade, planned for the second half of 2026, and it’s aimed at structural cleanup, censorship resistance and state size reduction. A rewrite of monetary policy wasn’t on that list.
The proposal arrived days before the Aug. 6 inclusion deadline, carrying a draft implementation of roughly 300 lines and no consensus among the validators and stakers whose yields it would cut.
That combination makes a slip to a later fork far more likely than a ship in this one.
The authors know the clock is the whole argument. Every month of delay, they note, lets the staking ratio climb roughly another 1.5 percentage points. Miss enough forks and the 60.25 million threshold stops being a policy target and starts being a fact on the ground.
If you’re staking today, the number to watch isn’t the burn schedule. It’s the entry queue: 2.5 million ETH deep, six weeks long, and nobody heading for the exit.
