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Ethereum researchers just wanted to reduce staking incentives. Instead, they sparked one of the biggest debates over the network’s economics since the Merge.

Ethereum Improvement Proposal EIP-8363, or “Tapered Issuance Burn,” would gradually reduce staking rewards as more and more Ether is locked up to secure the network — eventually cutting new protocol issuance to zero once 50% of ETH’s supply is staked.

Its authors, including Ethereum Foundation’s Justin Drake and Ethereum Community Conference (ETHCC) co-founder Jerome de Tychey, argue that Ethereum has reached the point where additional staking provides diminishing security returns, while diluting holders who choose not to stake.

In other words: Ethereum should stop paying for security it no longer needs.

There’s just one problem, a lot of people hate the idea.

From DeFi builders to staking providers and institutional investors, critics argue it could weaken decentralization, disrupt Ethereum’s lending markets and undermine confidence in the network’s monetary policy. As Ether.fi founder Mike Silagadze puts it:

“This is so disappointing on every level. […] This is bad for decentralization, this is bad for Ethereum adoption, and this is bad for the credibility of the network.”

Dr. Steve Berryman, Bitwise’s head of client partnerships for Ethereum, tells Magazine:

“Institutional adoption requires certainty and playing with the issuance at the margin would cause uncertainty and institutions hate uncertainty.”

So is Ethereum really paying too much for security, or is EIP-8368 a solution in search of a problem?

Is Ethereum over-staked?

Ethereum currently has around 41.5 million ETH staked, earning 2.67%, and representing 34.07% of the entire supply, according to the Ethereum Validator Queue.

EIP-8363, Tapered Issuance Burn. Source: Jerome de Tychey

While more ETH locked up generally makes the network harder to attack, EIP-8368’s authors argue those security gains become increasingly marginal while Ethereum continues issuing rewards to validators.

EIP-8363 would gradually remove that incentive, and the authors argue Ethereum should stop subsidizing additional staking once the network is sufficiently secure.

Yet not everyone agrees that the problem even exists in the first place. It’s certainly true that the amount staked has increased substantially in 2026, up 15% since the start of the year.

Berryman argues that market forces are already slowing participation without the need to change Ethereum’s issuance policy.

“We will come to a natural ceiling probably by the end of this year,” he says, arguing that yields falling to around 2% are unlikely to attract significantly more ETH to be locked up in staking. “People need a certain amount of liquidity,” he says.

Related: Ethereum Foundation adds SEAL 911 co-founder to board as privacy focus grows

Berryman says recent growth has largely been driven by institutional entrants such as Bitmine and BlackRock, but argues that once those players complete their staking allocations, participation is likely to plateau again.

Source: Validatorqueue.com

Ethereum commentator Leo Lanza, who also opposes the proposal, challenges the core assumption that issuance on Ethereum represents a meaningful “stealth tax” on non-stakers.

Ethereum’s annual inflation remains below 1%, he says, arguing that even gold, widely viewed as the world’s premier monetary asset, expands its supply by roughly 1% to 2% annually:

“The free market already solves this […] Let the market adjust.”

Could the cure be worse than the disease?

Supporters of EIP-8368 argue the change would curb unnecessary issuance and discourage staking from becoming overly concentrated among large custodians and liquid staking providers. But critics say the proposal risks creating bigger problems than it’s trying to solve.

Greg Koumoutsos, technical research lead at the Lido Labs Foundation, says today’s staking ratio of around one-third of ETH supply does not appear unhealthy, though he agrees it is reasonable to think proactively about excessive staking.

More importantly, he argues the proposal oversimplifies what Ethereum’s issuance is actually paying for:

“Ethereum is not only paying for slashable ETH; it is paying for decentralization, operator diversity, censorship resistance, and network resilience.”

Koumoutsos says lower issuance is not automatically a better security policy unless those broader trade-offs are also taken into account.

Another factor to consider is that liquid staking is now deeply integrated into Ethereum’s DeFi ecosystem, and staking derivatives are widely used as collateral and in lending and yield strategies.

“It will obviously kill a huge chunk of DeFi which is built around the staking ecosystem,” Silagadze argues.

Stani Kulechov, founder of Aave, Ethereum’s largest decentralized lending protocol, says that reducing staking rewards risks undermining that broader ecosystem.

“My concern is… those who are fine with ETH beta and yield might also sell ETH for other yielding assets […] Ethereum should not be punished for its growth.”

Related: Ethereum, Solana led crypto hack losses in H1 2026: Blockaid

Smaller validators will bear the cost

Another concern with the proposal is that lowering staking rewards could actually increase concentration among the largest participants.

“I stand firmly opposed to this EIP.” Source: Leo Lanza

That’s because independent validators do not benefit from the economies of scale that larger staking businesses, exchanges or institutional operators do. Lower protocol rewards could make solo staking uneconomical while larger organizations continue operating. Koumoutsos says:

“A solo validator has real costs: some ideological solo stakers may remain, but many marginal solo validators will not, and fewer new ones will enter, if any.”

He adds that centralized platforms also stake for reasons beyond yield, such as customer retention, regulatory positioning and product integration, which makes them less likely to reduce their participation.

Koumoutsos also warns that even within delegated staking, lower rewards could favor centralized custodial products over onchain staking protocols, which face higher maintenance, governance and upgrade costs.

A debate over more than staking

Supporters say lower issuance would strengthen Ether’s long-term monetary profile. But critics argue that continually adjusting Ethereum’s monetary policy undermines its claims to be predictable and reliable.

Berryman argues institutions value predictability more than marginally higher yields, and that changing the curve creates yield governance risk. “Institutional investors will price accordingly,” he says.

He also says institutions value staking not because the yield is especially high, but because it provides a predictable return while they hold ETH:

“It’s not broken, why try and fix it?”

Silagadze agrees, saying, “Any nation state or large institution looking at this will justifiably have a dramatic loss of confidence in the governance and stability of Ethereum.”

The proposal’s rollout also drew criticism for being published just two days before the Aug. 6 deadline for proposals to be considered for the next Ethereum network upgrade.

Silagadze says that a change with “far reaching implications for all of DeFi” should not have been published on such a short timeline.

The fierce backlash has shown how difficult it has become to change Ethereum’s economics, especially when every adjustment creates winners and losers across staking, DeFi and institutional markets.

Magazine: Ethereum’s much-hated staking ‘tax’ may already be obsolete

Bitcoin (BTC) hit new August highs into Friday’s Wall Street open as markets reacted to weaker US jobs numbers.

Key points:

Crypto and risk assets gained after US nonfarm payrolls fell by 23,000 in July.Fed interest-rate bets for September shift from a 0.25% hike to a pause on signs of a weaker labor market.Bitcoin and altcoins stayed “resilient” after a week of bearish surprises, per analysis from QCP Capital.

Crypto, stocks higher on low nonfarm payrolls print

Data from TradingView showed BTC/USD hitting $65,340 on Bitstamp, up 1.3% on the day, as fresh US labour-market data was released.

BTC/USD four-hour chart. Source: Cointelegraph/TradingView

The US economy lost 23,000 jobs in July, per nonfarm payrolls data from the Bureau of Labor Statistics (BLS), with the unemployment rate at 4.1%, numbers it described as “little changed” versus the month prior.

“The change in total nonfarm payroll employment for May was revised down by 66,000, from +129,000 to +63,000, and the change for June was revised down by 37,000, from +57,000 to +20,000. With these revisions, employment in May and June combined is 103,000 lower than previously reported,” an official statement added.

The combination of negative July values and downward revisions appeared to boost both crypto and US stocks, with traders linking weaker labor-market conditions with potential policy softening from the Federal Reserve.

The S&P 500 index opened 0.5% higher, while the tech-heavy Nasdaq Composite Index added just over 1%.

Data from CME Group’s FedWatch Tool reveals that markets are now expecting the Fed to hold interest rates at current levels at its September meeting. As late as yesterday, majority odds had favored a 0.25% rate hike.

Fed target-rate probability comparison for September FOMC meeting. Source: CME Group

Prior to the employment data release, Ryan Lee, chief analyst at Bitget Research, said that it would “set the tone” for both the September meeting and the Fed’s annual economic Jackson Hole economic symposium, taking place at the end of August. 

Fabian Dori, CIO at Sygnum Bank, predicted that Fed chair Kevin Warsh would be influenced by the extent to which payrolls data shifted lower. 

“An orderly slowdown supports the liquidity relief case, while a print weak enough to raise growth concerns can still pressure risk assets even as rate odds move,” he said in comments sent to Cointelegraph.

Analysis praises Bitcoin, altcoin “resilience”

In its latest crypto and macro overview released on the day, trading company QCP Capital described the macro picture as “uncertain” for Bitcoin.

Related: Bitcoin price-metric basket sees longest capitulation since FTX blow-up: Glassnode

“For crypto, the week’s price action points to resilience rather than clear directional confirmation,” it summarized.

QCP noted that the fallout from the Coldcard wallet exploit, along with BTC sales by corporations including Strategy, had only sparked “limited demand for panic protection” on options markets.

Previously, Cointelegraph reported on option traders’ expectations for a BTC price trading-range breakdown to occur next month.

Real-world assets (RWAs) are gaining momentum as tokenized versions of traditional investments move beyond issuance and become active parts of onchain financial markets.

RWA deposits across decentralized finance platforms more than tripled year over year to $7.4 billion in the second quarter of 2026, while total DeFi deposits fell about 15%, according to a joint report by CoinShares and Token Terminal published Thursday.

CoinShares CEO Jean-Marie Mognetti said the divergence shows that RWA demand is being driven by practical use cases rather than broader market conditions.

“When an asset class grows through a downturn in its host ecosystem, demand is being driven by financial utility, not by market cycles,” he said.

The report suggested that the RWA market is entering a new phase, with investors using them as collateral, yield-generating instruments and trading products across onchain markets.

Yield-bearing stablecoins and Treasuries lead RWA deposits

Yield-bearing stablecoins and tokenized Treasury products have emerged as the largest categories of RWA assets used across DeFi, according to the report.

In Q2, Sky Protocol’s sUSDS led the category, giving holders exposure to a yield-generating version of its USDS stablecoin.

Tokenized Treasury funds, including BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), have also become a major source of onchain collateral, as investors use yield-bearing assets in decentralized lending markets.

Source: CoinShares, Token Terminal

The report said that RWA products currently offer yields ranging from about 3.2% to 5.5%, with lower-risk Treasury products at the bottom of the range and higher-yield strategies carrying additional risks.

Gold and yield-bearing dollars drive RWA volumes

Gold-backed tokens and yield-bearing dollar products accounted for much of the RWA trading activity on decentralized exchanges (DEXs).

CoinShares classified gold-backed stablecoins such as Tether Gold (XAUt) and Paxos Gold (PAXG) as tokenized gold products within its broader RWA category.

Related: Gold hits 6-week highs on China demand as Bitcoin ignores fresh S&P 500 record

These assets generated significant trading volume as investors traded around gold price swings, while yield-bearing dollar products such as Ethena’s sUSDe also contributed to RWA spot activity.

Source: CoinShares, Token Terminal

RWA spot trading volumes rose roughly 220% year over year, even as overall DEX volumes fell about 70%. The divergence suggests tokenized assets are gaining traction as secondary markets, allowing investors to trade ownership rather than only buy assets directly from issuers.

RWAs expand into leveraged markets

Onchain exposure to RWAs is also expanding into derivatives markets, where traders can take leveraged positions without owning the underlying assets.

RWA perpetual futures trading has continued growing despite a broader slowdown in crypto-native derivatives markets. On tradeXYZ, an RWA-focused perpetual futures platform built on Hyperliquid, trading volume has increased roughly 20 times since launch, the report said.

Activity has concentrated around commodities, equity indexes such as the S&P 500 and Nasdaq-100, and technology stocks, while open interest has also continued rising.

Magazine: How Fake World Assets and onchain gacha became crypto’s latest craze

Cointelegraph is committed to providing independent, high-quality journalism across the crypto, blockchain, AI, and fintech industries.

All news, reviews, and analyses are produced with full journalistic independence and integrity. For more details on our standards and processes, please read our Editorial Policy.

The Hacker Goes Quiet, Then Moves Again

Just hours ago, the hacker behind the largest share of the theft, holding 2,055 BTC worth roughly $130 million, resurfaced to move 30.185 BTC, worth about $1.94 million, to a newly created wallet. Other onchain sleuths corroborated the transfer within minutes of each other, describing it as the hacker’s first activity since the initial theft.

The move is small relative to the hacker’s total holdings, representing roughly 1.5% of the stolen funds, but it is significant because it breaks a pattern of dormancy that had left investigators and the wider Bitcoin community watching an otherwise untouched pile of stolen coins.

Bitcoin.com News previously reported that the theft, which affected Coldcard Mk3 devices running vulnerable firmware, climbed past $116 million across more than 1,800 BTC pulled from over 5,200 addresses as additional waves of draining were discovered in the weeks after the initial disclosure.

What the Transfer Potentially Means

Onchain analysts commonly treat a dormant hacker’s first movement of stolen funds as an early signal of an attempted cash-out, since attackers typically need to move coins through a series of wallets, mixers, or cross-chain bridges before attempting to convert them into other assets or fiat currency without immediately attracting attention.

The Coldcard hacker’s situation is complicated by how closely the stolen funds have been watched, given that he previously received a brazen offer from another party proposing to help launder the funds directly onchain, an unusual public overture given how much scrutiny the wallets involved have received from the broader security community.

Separately, onchain investigator ZachXBT has said he has no plans to personally trace the stolen funds, leaving that work to other researchers and the handful of blockchain analytics accounts that have kept the wallets under close watch since the exploit first came to light.

A Reminder of the Exploit’s Scale

The underlying vulnerability traces back to a firmware bug in Coldcard devices made by Toronto-based manufacturer Coinkite, which caused certain units to generate seeds with a fraction of their intended cryptographic randomness. That left long-term holders who generated wallets on affected firmware versions exposed to brute-force attacks capable of reconstructing their private keys.

Bitcoin.com News has reported that Canadian users alone accounted for roughly a quarter of all attributable losses, a detail that lines up with Coinkite’s own Toronto base and suggests the affected devices may have circulated more heavily in that market.

The renewed activity from one of the exploit’s largest single beneficiaries is likely to reignite attention on a story that had begun to quiet down as the pace of new draining slowed. For victims still hoping for some path to recovery, a hacker moving funds proves the coins still exist and remain traceable on a public ledger, but it also raises the odds that at least a portion of the stolen bitcoin is about to become far harder to follow.

Over the coming few days, experts will likely keep a close watch on the destination wallet for any further movement, since subsequent transfers often reveal whether a hacker is testing a laundering route, consolidating funds ahead of a larger move, or responding to some outside pressure.

Cointelegraph is committed to providing independent, high-quality journalism across the crypto, blockchain, AI, and fintech industries.

All news, reviews, and analyses are produced with full journalistic independence and integrity. For more details on our standards and processes, please read our Editorial Policy.

Updated (Aug. 6, 2026, 2:12 am UTC): Added more comments from Forgd CEO Shane Molidor.Crypto analytics platform DefiLlama has integrated Forgd’s market-maker leaderboard, giving users access to data on spreads, market depth, trading volume and uptime. 

In an announcement sent to Cointelegraph, Forgd said that the dashboard ranks crypto market makers using standardized measures of pricing, depth, reliability and execution quality. The data comes from more than 500 token projects and 35 market-making firms that use Forgd’s tools to monitor liquidity across active engagements, according to the company. 

The integration allows DefiLlama users to compare market makers across exchanges and assess the liquidity supporting individual tokens. Forgd first launched the leaderboard in May as a tool for token projects selecting and monitoring liquidity providers.

Ryan Celaj, DefiLlama’s head of research, said the integration adds another signal for evaluating execution quality and market resilience alongside metrics such as volume and liquidity.

However, the ratings do not solely reflect observed trading performance. “A lower grade on the index is not necessarily a judgment of a firm’s trading,” Forgd CEO Shane Molidor told Cointelegraph.

“It reflects that they haven’t yet fully opted into performance verification.” This means that the leaderboard ratings may also reflect the amount of data a market maker provides to Forgd.

Clarifying the arrangement, Molidor told Cointelegraph that Forgd provides the leaderboard’s anonymized market-maker performance data, while DefiLlama hosts it as a distribution partner. He said the companies have no other financial arrangement specifically related to the dashboard.

Related: BNY to offer institutional crypto staking through Galaxy partnership

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.

BlackRock will offer tokenized versions of select European money market funds using JPMorgan’s blockchain infrastructure. 

According to a Tuesday Bloomberg report, the offering will include pound sterling, euro and US dollar share classes from BlackRock’s Institutional Cash Series, which collectively manage about $311 billion. The figure refers to the broader fund range, not the assets that will be tokenized.

Each token will represent a share in an underlying money market fund and can be transferred around the clock between approved digital wallets. 

JPMorgan’s Kinexys will provide the tokenization infrastructure, while the bank will continue to serve as the transfer agent for the funds. 

Beccy Milchem, BlackRock’s global head of cash distribution and head of international cash management, said the asset manager has seen interest from digital wallet providers, corporate treasurers and capital markets participants seeking more efficient collateral.

Hannah Winter, BlackRock’s head of digital cash, said the ability to make peer-to-peer transfers had appealed to companies exploring intracompany payments.

BlackRock previously entered the tokenized cash-management market with BUIDL, its US dollar-denominated institutional liquidity fund, in 2024. The fund has since grown to $2.67 billion in assets, according to RWA.xyz.

Related: BlackRock launches tokenized money market funds for stablecoin reserves

Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.

A failure to pass the CLARITY Act this week will put the bill in a “walking dead” state, but won’t stop the crypto industry’s march forward, according to Bitwise chief investment officer Matt Hougan. 

In a blog post on Wednesday, Hougan said while many, including himself, have called it the “make or break” week for the CLARITY Act, the reality is that the crypto industry has made too much progress to “go back in the bottle.” 

“The reality is that Washington is always late to major technology shifts, and it has rarely mattered as much as people feared,” said Hougan. 

His comments come as the Senate faces an Aug. 5 deadline to advance the landmark crypto market structure bill before its summer recess, with many concerned that failure to pass this week could see the bill pushed into next year as lawmakers focus on the midterm elections in November. 

Prospects for CLARITY this year fade

Market observers are increasingly pessimistic about the CLARITY Act’s passage this year. In July, Galaxy Research lowered its probability of the CLARITY Act passing in 2026 to 30%, while Polymarket currently shows a 23% chance of it being signed into law this year, down from 82% in February. 

On July 24, NYDIG global head of research Greg Cipolaro said the latest draft was more complete but still lacked sufficient bipartisan support.

“The central investor takeaway is that Republicans have produced a substantially more complete bill, but not yet one with a credible path to 60 votes,” Cipolaro said.

According to sources speaking to Punchbowl News, without signs of progress from the White House on a bipartisan ethics deal, and movement on illicit finance and stablecoin yield, Senate Democrats will deny cloture for the crypto bill. 

Polymarket odds for the CLARITY Act passing in 2026 are at 23%. Source: Polymarket

Hougan said failure to pass the bill will put it in a “walking dead” state, stalled, but not permanently defeated. He said there is some hope that the bill could pass in September, or even in December, when Congress returns for a lame duck session.

“Congress often bundles multiple bills into a year-end “omnibus” package, forcing legislators to vote on a single bill that includes things they like and things they hate. Maybe the Clarity Act can pass that way.”

“Crypto will be fine,” Bitwise’s Hougan says

If the CLARITY Act fails to pass this year, Hougan said that the industry will fall back to the SEC-CFTC’s joint interpretation issued in March, which classifies Bitcoin and other assets as digital commodities and replaces the SEC’s 2019 staff guidance. 

SEC Chair Paul Atkins reinforced this last week, saying his agency is “ready, willing, and able to come out with rules that address the same issues as CLARITY and other aspects of the crypto market.” 

Related: CLARITY Act failure could send crypto valuations lower: Bernstein

However, the rules issued by the two regulators aren’t as durable as legislation, and could be challenged in court or reversed by a future administration. Atkins even acknowledged this in March when the two agencies released the interpretation. 

Source: Cynthia Lummis

“Only Congress can ensure that regulation in this area is future-proofed through comprehensive market structure legislation,” Atkins said.

WisdomTree chief legal officer Ryan Louvar has argued that the absence of legislation would continue to impede the market, despite the regulators’ efforts.

“A market cannot function well when its participants cannot tell in advance which agency’s rules apply to them,” Louvar said at a July congressional hearing.

Hougan said “crypto will be fine” despite this, as it would still give the industry two and a half years to accelerate before a new administration could potentially install a new SEC.

“Washington is dysfunctional. It seems crazy to me that we can’t get our act together to pass legislation that would improve investor protections and spark new innovation,” said Hougan.

“But it’s not a referendum on crypto’s validity as a pillar of the global financial infrastructure. That ship has long since sailed. At this point, crypto has enough momentum that it will reshape finance for decades, regardless of what happens in the next few days.” 

Magazine: CLARITY hopes fade, BitMEX shuts as lawsuit looms: Hodler’s Digest, July 26