Ethereum's Issuance Wars
Ethereum Korea One: Genesis · Day 2 · 2026-09-29 · 36:21 · In English
How much should Ethereum pay for its security, and who gets to decide? At Ethereum Korea One: Genesis, a co-author of EIP-8363 and Lido's Chief of Staking debate the future of ETH issuance.
Speakers
- Jerome de Tychey, Founder, EthCoordinate
- Isidoros Passadis, Chief of Staking, Lido
- Hyung-Kyu Choi, Co-Founder, DSRV (moderator)
About this session
Moderated by Hyung-Kyu Choi, Co-Founder of DSRV, this panel revisits EIP-8363 (Tapered Issuance Burn), a proposal that would burn part of validator rewards as the staking ratio rises. It set off one of the most intense debates in the Ethereum community two months earlier, and it did not make it into the Hegotá hard fork. Jerome de Tychey, a co-author of the EIP and the organizer of EthCC, and Isidoros Passadis of Lido take opposite sides on how stakers are paid, whether a rising staking ratio is a problem, and what lower issuance would mean for MEV and solo stakers.
Key takeaways
- Jerome de Tychey explained that validators currently earn about 2.5% while new issuance dilutes holders by about 0.85% a year, a figure he expects to near 1% within 12 to 24 months. Annual issuance is 166 times the square root of the ETH staked, so it keeps growing with stake, and if all ETH were staked, yield and dilution would both be about 1.5%, for a real return of zero.
- De Tychey's core concern is that the staking ratio should not cross 50%. EIP-8363 would pay less as staking approaches that level, and he noted that Ethereum has changed its issuance seven times, always downward. Once dilution passes a psychological threshold, he warned, "you just want to stake," pulling ETH out of active circulation.
- Isidoros Passadis said Lido pools stake from users with less than 32 ETH up to SharpLink, which recently allocated $200 million through Lido, and distributes it across more than 700 node operators, with 34 professional operators running about 90% of the stake. Roughly 22% of staked ETH runs through Lido.
- Passadis argued that stakers are not necessarily net sellers of ETH, since stETH holders can borrow stablecoins against it to hedge or cover costs without selling. He sees ETH's yield, which Bitcoin lacks, as a competitive edge for ETFs and DATs like SharpLink and BitMine, and said the net effect of cutting issuance is understudied.
- Passadis does not see today's staking ratio as a problem: about 85% of new stake over the last year and a half was pent-up institutional ETH, growth should flatten, and other proof-of-stake systems settle between 50 and 70%. Both agreed that, all else equal, a lower ratio is better, but Passadis said who runs the stake matters more, noting that Coinbase, Kraken, and Binance were the biggest winners of stake growth and Coinbase custodies 8 of the 9 US Ethereum ETFs.
- On the objection that lower issuance makes MEV a bigger share of rewards and pushes out solo stakers, de Tychey replied that the current curve already squeezes solo stakers, especially after tax on yield. For 2027, he hopes for at least a mechanism that sharply lowers yield above a certain staking level, while Passadis urged people to stop conflating issuance with inflation and find a way back to when the EIP-1559 burn worked well.