A fight over Ethereum’s monetary policy is heating up, and this time it’s coming from one of DeFi’s most recognizable voices. Aave founder and CEO Stani Kulechov has publicly pushed back against EIP-8361, a proposal that would gradually cut staking rewards to zero once more than half of ETH’s supply is staked. His message: the fix could do more harm than good.
What Kulechov Is Actually Worried About
Kulechov’s core argument centers on unpredictability. If staking rewards taper down to nothing once the 50% threshold is crossed, he says yields become a moving target rather than something stakers can plan around. That unpredictability, he argues, is exactly what scares off institutional capital, which tends to favor assets with steady, forecastable returns over ones with a built-in expiration date on yield.
Solo stakers aren’t spared either. Kulechov points out that individual validators, often more sensitive to changes in economics than large staking operations, would be left navigating the same uncertainty — potentially pushing smaller players out just as the network needs broad participation to stay decentralized.
The Ripple Effect on DeFi Lending
Beyond staking itself, Kulechov flagged a knock-on problem for decentralized finance. A lot of ETH borrowing activity today is driven by yield opportunities. Strip those away, and borrowing ETH loses much of its purpose — potentially leaving short selling as one of the few reasons left to borrow it at all. Since staked ETH comes with lock-up periods, unlike the instant liquidity DeFi protocols typically offer, he warns that yield-seeking capital could simply migrate elsewhere, including into stablecoins, echoing what happens in traditional markets when interest rates fall.
Also Read: Charles Hoskinson Warns Bitcoin Could Lose Its Crown Without Quantum Upgrades
Why the Proposal Exists in the First Place
EIP-8361 isn’t coming out of nowhere. Its authors argue Ethereum currently lacks any natural brake on staking growth, and that unchecked growth carries its own risks — from diluting non-staking holders through continuous issuance to concentrating power among large custodians as solo staking becomes less appealing. There’s also concern that liquid staking derivatives could eventually crowd out native ETH as the network’s core asset.
With staking already above one-third of ETH’s supply as of early 2026 and climbing, the proposal’s supporters say the two-year runway built into the plan gives the ecosystem time to adjust before hitting the 50% cap.
Whether EIP-8361 moves forward will likely hinge on how the Ethereum community weighs network security against economic predictability. Kulechov’s pushback signals that DeFi’s biggest players aren’t ready to let the proposal advance quietly — and the debate over Ethereum’s yield future is far from settled.
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