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Following
ETH Ethereum improvement proposal to reshape the verifier reward mechanism
A draft Ethereum improvement proposal released on August 4 may fundamentally change the way the Internet rewards verifiers, reigniting long-standing debate about ETH monetary policy and the risks of uncontrolled pledge growth.
What EIP-8361 proposes
Ethereum researchers Jérôme de Tychey, Justin Drake, dapplion, pintail, pa7x1 and Ladislaus von Daniels submitted EIP-8361 as the core draft improvement proposal.
The proposal introduces a destruction mechanism that gradually reduces supply: In each era, a portion of the theoretical verifier's reward will be removed and destroyed, and the destruction ratio will gradually increase from 0% to 100% as the pledge rate increases.
When the pledged ETH approaches 60.25 million (approximately half of the current supply), the reward will be reduced to zero. The proposal also proposes an 18-month transition period to limit sudden changes in verifier profits.
This proposal refers to a feature of the Ethereum issuance curve that has not been solved by any previous reduction plan: no pledge rate can turn off the incentive to increase pledges.
Theproposal states that Ethereum exceeded the pledge rate of one-third in April 2026 and has continued to climb monthly since then.
Currently, the validator entry queue is running at a maximum turnover rate, with approximately 1.75 million new ETH units added every month. According to conservative estimates, if no changes are made, by January 1, 2028, the pledged ETH may exceed 70 million pieces, accounting for more than 55% of the total supply.
Proponents believe that uncontrolled issuance dilutes non-pledgers and could intensify custody concentration, while opponents warn that lower rewards could weaken participation and increase reliance on transaction sequencing revenue.
EIP-8361 is still under community review and has not yet received approval for an Ethereum upgrade.
Opposing voices and bullish views
The reaction from the DeFi community was quick and fierce.
Aave founder and CEO Stani Kulechov criticized EIP-8361, arguing that proposed changes to the Ethereum pledge offering policy could weaken the network rather than achieve its stated goals. He pointed out that the proposal would make pledge rewards unpredictable and less attractive to institutional and independent pledgers, and warned that it could reduce the feasibility of the ETH lending strategy in DeFi, pushing investors towards other interest-bearing assets.
Grayscale's Zach Pandl makes the opposite view, arguing that potential supply reductions have the primary impact on ETH prices, and pointing out that ETH pays for its cash flow through inflation. This divergence suggests that the same mechanism may take on a completely different look from a DeFi earnings perspective and a macro asset valuation perspective.
As demonstrated by the record number of validators exiting the queue in 2025, reward changes can quickly drive capital flows. Therefore, the incentive effect of this design has become a core issue for customers when considering whether to implement it.
Since it has not yet received formal approval for the upgrade, the proposal will need to go through a long road of community consensus before it may affect the benefits of any validator.
