The Ethereum Foundation researchers' original goal was partly to keep the liquid-staking industry's dominance from growing even further – by reducing the incentives for new stakers.
As the researchers' thinking went, there's already enough stakers to provide effective security for the blockchain, and in fact any additional increases in the level of participation could enable the unwanted dominance of fast-growing third-party. A side benefit of the proposed changes would be to harden ether as a form of money, since the total supply of the cryptocurrency wouldn't grow as quickly – effectively tapering ether's inflation rate.
The current issuance rate"dilutes ETH holders beyond what is necessary for security," the researchers wrote. They estimated that the proposal would reduce ETH staking yields by nearly a third. The EF researchers say they're concerned that LSTs like Lido's stETH token – the most-traded asset on Ethereum other than the ETH token itself – could eventually replace the blockchain’s native currency as the network's de facto money, making the entire system less secure.
Jon Charbonneau, co-founder at crypto investment firm DBA, wrote on X that “these tweaks try to solve an unsolvable problem of fundamental tradeoffs in PoS.
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