SharpLink CEO Opposes Ethereum Proposal to Burn Staking Rewards, Calls It a Blow to DeFi
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SharpLink CEO Joseph Chalom has formally opposed a new Ethereum Improvement Proposal, EIP-8363, that would gradually burn validator rewards to limit staking.
In a post on X on August 7, Chalom wrote that the proposal would damage the decentralized finance, or DeFi, ecosystem and erase one of Ethereum’s core advantages over Bitcoin. He said it would also pour cold water on Ethereum at a critical moment, as institutional capital begins to build momentum around the token.
EIP-8363 was put forward by Ethereum Foundation researcher Justin Drake and others. The proposal would gradually increase the share of consensus-layer rewards that is burned as the network’s staking ratio rises. Its key feature is reducing the reward rate to zero if about 50% of Ethereum’s total supply is staked. The stated goal is to limit staking through market forces and prevent value dilution for users who do not stake.
Chalom argued that Ethereum’s staking yield serves as a benchmark rate in the on-chain market. Reducing that yield would raise the cost of capital and push real returns toward zero, he wrote, ultimately driving collateral and network activity elsewhere.
He also said network issuance is not a cost Ethereum pays to outsiders, but an internal transfer within the system to those who secure and build the network. Ethereum is attractive to institutions, he added, because it is productive by design.
