Sharplink CEO: EIP-8363 Proposal Ill-Timed, Will Harm DeFi and Weaken ETH Institutional Appeal
TechFlow reports, August 07, Sharplink CEO Joseph Chalom (former Head of Digital Assets Strategy at BlackRock) published a post stating that the EIP-8363 "Decreasing Issuance Burn" proposal currently under discussion in the Ethereum community will gradually reduce validators' staking yield by approximately 2.75%, until staking volume reaches about half of the total supply at which point yield drops to zero; validators will then rely solely on transaction tips, accounting for 15% of current revenue, to maintain operations.
Chalom strongly opposes this, listing four major reasons:
- Harms DeFi: Staking yield is the benchmark interest rate for on-chain lending, reductions will drive up on-chain capital costs, compressing the collateral value of liquid staking tokens (approximately $35 billion TVL);
- Weakens institutional appeal: ETH's native productivity is a core advantage distinguishing it from BTC, EIP-8363 will erase this difference, affecting institutional capital inflows such as ETPs, DATs, etc.;
- Destroys ecosystem capital cycle: Issuance rewards are not 'leakage', but flow to node operators, client development teams, and ecosystem builders, burning will cut off capital circulation;
- Poor timing: Currently, top institutions such as Robinhood, BlackRock, BNY have successively chosen Ethereum, on-chain stablecoin scale reaches $159 billion, RWA exceeds $15 billion, modifying the underlying economic logic at this moment carries extremely high risk.
Chalom expressed support for ETH's long-term deflationary goal, but believes the existing base fee burn mechanism (EIP-1559) can already achieve this, EIP-8363 is 'solving the problem in the wrong way'.
