Ethereum developers launch EIP-7514 proposal to slow down the growth of ETH staking📢

Currently, about 20% ($41 billion) of Ether's circulating supply has been pledged and locked to generate long-term returns. According to estimates by some Ethereum developers, at the current rate, nearly 50% of Ether's circulating supply will be in circulation by May next year. The amount will be locked, and this ratio may reach 100% by December next year. In response to this situation, they launched a new EIP-7514 proposal as part of the next major upgrade, by setting the number of new validators ("churn change ”) to slow down the pace of staking, which could delay reaching 100% staking by a few years to 2030 as a temporary solution to buy the community time until a longer-term solution is found.

Similar to the "chasing yield" narrative we've seen with TradFi over the past 15 years, the same phenomenon appears to be happening with cryptocurrencies in the short term, and while we wait for this long bear market to end, the investment narrative will be primarily centered around generating returns. Expand.

This proposal aims to mitigate the negative effects of a high percentage of ETH being staked until a proper solution is implemented, i.e. it understands the complexity of changing the reward mechanism for the sole purpose of slowing down staking growth.

If current rates continue, staking of the ETH supply will reach 50% by May 2024, 75% by September 2024, and 100% by December 2024.

Source: EIP-7514

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