SharpLink CEO Joseph Chalom publicly opposes Ethereum EIP-8363 proposal, warning it could threaten $35B in DeFi staking collateral by reducing validator rewards.
DeFi & Yields ·
Joseph Chalom, chief executive of SharpLink, has publicly opposed Ethereum's proposed EIP-8363 upgrade, contending that it could jeopardize approximately $35 billion in DeFi staking collateral. According to Chalom, the proposal would gradually reduce validator rewards until they reach zero if 50 percent of ETH enters staking. Under such conditions, staking participants would rely more heavily on transaction fees and tips rather than issuance rewards, which Chalom argues could destabilize both the staking and liquid staking economies that underpin major DeFi protocols using collateral assets such as stETH.
The core tension centers on whether the reduction in ETH issuance justifies the risk to staking yields, which currently anchor a substantial portion of DeFi. Chalom contends the mechanism threatens Ethereum's competitive positioning relative to other blockchains.
The proposal remains under discussion with no final determination yet reached. The specific economic impacts on liquid staking derivatives and protocols depending on staking-backed collateral remain unclear and subject to further technical and community deliberation.