Joseph Chalom, chief executive of SharpLink (NASDAQ: SBET), a publicly traded holder of ether, has publicly opposed a draft Ethereum Improvement Proposal that he believes risks stripping ETH of one of its strongest competitive features relative to bitcoin.In a detailed post on X, Chalom argued that EIP-8363, known as the “Tapered Issuance Burn,” could erode the native yield that makes ether productive in ways bitcoin is not.
He cautioned that the change would undermine crypto / decentralized finance activity, raise capital costs on the network, and arrive at an especially poor moment as institutional interest in Ethereum continues to build.
The proposal, introduced earlier in the week by researchers including Ethereum Foundation contributor Justin Drake and EthCC founder Jérôme de Tychey, seeks to modify how new ether is issued to validators.
Under the current system, the network compensates those securing the chain with newly created ETH, producing a variable staking yield.
Consensus layer rewards form the bulk of that return, with priority fees and maximal extractable value contributing a smaller share.
EIP-8363 would introduce a progressive burn: as the proportion of the total ETH supply locked in staking rises, an increasing fraction of those consensus rewards would be destroyed rather than paid out.
Once roughly half the supply is staked, the burn would reach 100 percent, leaving validators with zero issuance yield.
They would then rely solely on transaction tips and MEV.
The change is designed to phase in over approximately 18 months.Supporters of the draft present it as a market-oriented way to discourage unbounded growth in staking, reduce dilution for non-stakers, and reinforce ether’s monetary characteristics.
They argue the current issuance curve continues to incentivize more staking without a natural ceiling, potentially concentrating control among large custodians and liquid-staking providers.
Chalom rejected that framing. He described staking yield as the practical base rate that underpins much of DeFi pricing and activity.
Removing or sharply reducing the issuance component, he said, would push real yields lower, increase the cost of capital for on-chain applications, and encourage collateral and liquidity to migrate elsewhere.
He stressed that issuance should not be viewed as an external cost paid to outsiders but as an internal transfer that rewards those who secure and build on the network.A central part of his critique focused on institutional appeal.
Ether’s ability to generate native returns through staking makes it “natively productive,” a quality bitcoin lacks.
Institutions evaluating treasury or yield strategies have increasingly noticed this distinction.
Voluntarily diminishing that advantage, Chalom argued, would be self-defeating at a time when Ethereum is attracting significant institutional and innovator attention.
SharpLink itself stakes nearly all of its substantial ETH holdings and has earned meaningful rewards, giving the company direct exposure to the economics under discussion.
The firm supports efforts to enhance ether scarcity but prefers mechanisms already in place—such as the base-fee burn introduced with EIP-1559—combined with organic growth in network usage, rather than altering the issuance schedule in this manner.
The proposal remains at the draft stage and has already generated considerable debate.
Critics, including other ecosystem participants, have raised concerns that it could disproportionately affect independent stakers, complicate liquid-staking derivatives that power much of DeFi, and introduce risks to network security or participation incentives.
Community discussions have highlighted the timing and potential second-order effects on applications built around current yield assumptions.
Chalom closed by noting respect for the proposal’s authors, describing them as serious researchers and long-time Ethereum supporters, while maintaining that good intentions do not guarantee correct policy. The episode underscores ongoing tensions in Ethereum’s monetary design as the network balances security, scarcity, and the economic incentives that have helped drive its growth.