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ETH Six researchers submitted Ethereum improvement proposals to gradually burn verifier rewards
A team of six researchers submitted a draft Ethereum improvement proposal, which will gradually burn verifier rewards based on the amount of ETH pledged. The proposal aims to solve the problem of the lack of an incentive cap for pledge ETH in the current mechanism-that is, there is no critical point that will stop increasing the motivation for pledge.
What is "progressive release burning"?
Six researchers, including Jérôme de Tychey, Ladislaus von Daniels and Justin Drake of the Ethereum Foundation, have jointly proposed a proposal to change the way Ethereum pays verifiers. This plan will deduct a portion of the rewards already received by the verifier, and the deduction proportion will increase as the pledge rate increases. When the pledge rate is close to half of the total supply of ETH, the deduction ratio will reach 100%.
Since the "merger" in September 2022, the circulation of Ethereum's execution layer has dropped to zero, and verifiers receive approximately 1,700 ETH per day, but this figure will fluctuate with the amount of pledge. The proposal also plans to spread the adjustment process over 18 months to avoid a sharp drop in yields.
Theproposal authors point out that if the new system is implemented immediately, the net consensus yield will drop from approximately 2.6% to 1.2% at current pledge rates, which could cause many validators to withdraw. Aave founder Stani Kulechov said on the X platform that setting the pledge reward cap to 0%(when the pledge ratio exceeds 50%) would make Ethereum yields unpredictable and uneconomical for institutional buyers who prefer stable cash flow.
Why should we change the ETH reward method?
As of July 28, 2026, the ETH pledge ratio has reached a record high of 33.33%, and the current policy has no restrictions on the upper limit of the pledge ratio. Under the current system, the yield only decreases with the square root of the number of verifiers, and no matter how much ETH is pledged, the yield remains at a bottom line of approximately 1.5%. Another institution (Bitmine Immersion Technologies) raised concerns about centralization after pledging more than 5 million ETH, accounting for approximately 4.8% of the circulating supply. The agency increased its holdings by another 150,120 ETH (worth approximately US$278 million) on August 4, bringing its total holdings to approximately 5.8 million ETH.
The proposal would also reduce the amount of new ETH entering circulation while limiting the dilution effect of non-pledged holders. However, lower consensus yields may reduce the attractiveness of liquidity pledge agreements and pledged ETH investment products, as their underlying yields will decline. Currently, liquidity pledge agreements hold US$34.9 billion, of which Lido alone accounts for US$17.6 billion.
The proposal is currently under public review and feedback from the client team and validators is being collected. When submitted, the proposal received one negative vote and two positive responses.
