Holders have continued to shift more supply into staking rather than withdrawal despite Ethereum’s protracted price decline. Total staked ETH increased from approximately 36 million in early 2026 to an unprecedented 41.9 million, despite the leading altcoin declining toward $1,800. This steady increase indicates that lower prices have not diminished the motivation to stake ETH for yield. As staking continues to absorb additional Ethereum supply during this downtrend, it concurrently diminishes the immediate quantity available for trading.
More importantly, recent inflows near 28,700 ETH remain below earlier spikes above 200,000 ETH, indicating that accumulation has become less aggressive. Notably, since approximately one-third of the supply is currently staked, this will likely constrain ETH liquidity, thereby enhancing scarcity if market demand ultimately rebounds. That said, approximately one-third of ETH is currently staked on the network. In light of this, EIP-8363, referred to as “Tapered Issuance Burn,” seeks to modify the reward structure for new participation on Ethereum. Under the proposal, validator rewards are established to diminish in relation to rises in staking ratios.
At the current staking ratio of approximately 33%, annual issuance is expected to start declining at a rate that is lower than the existing reward structure, ultimately nearing an issuance rate of below 0.8%. At the present staking ratio of approximately 33%, the annual issuance is projected to decline to around 0.8%, falling beneath the current reward curve. Subsequently, issuance would persist in its decline until it ultimately reaches zero, coinciding with staking nearing 50% of the total supply. As a consequence of this shift, the incentive to continue locking additional ETH would be diminished, thereby limiting dilution for those holders who are not staking. However, diminished yields may deter institutional investors from acquiring or engaging with liquid staking products.
This would then contribute to a deterioration in yield-based investment strategies. EIP-8363 could therefore incorporate staking-driven issuance, albeit at the cost of diminishing an incentive that underpins certain aspects of Ethereum’s staking economy. The proposed reward reduction will affect institutions that are already generating significant income from staking. For instance, Ethereum’s largest decentralised autonomous trust, BitMine, currently possesses 5.81 million ETH, having incorporated an additional 7,391 ETH while staking 5.07 million ETH from that total.
