Lido contributors thoughts on EIP-8363
Context: EIP-8363 was published roughly 48 hours before today’s ACD call, which is also the deadline for proposing EIPs for inclusion (PFI) in the Hegota hard fork. The EIP proposes a broad redesign of Ethereum’s staking rewards issuance curve and was shortly after requested for Hegota PFI.
Lido contributors believe that EIP-8363 should not be considered for Hegota.
This is not because issuance should never be lowered, but because this proposal is a broad monetary policy change, published at the end of the PFI window, with major unresolved questions around validator composition, solo staking, on-chain staking protocols, DeFi, tax/accounting implications, and roadmap interactions. For a monetary-policy change, process legitimacy is not a minor detail.
Why not consider for Hegota
PFI does not guarantee inclusion, but it still creates a default path. Once an EIP enters the Hegota track, the discussion shifts “is this mature enough for this fork?” to “what feedback is needed before inclusion?”. The small amount of time between PFI to SFI (especially given a client team is already working on it) we’re presented with is inappropriate for a change of this magnitude, especially since the first reaction by all types of ecosystem participants - ranging from home stakers to large institutions- show that this EIP is highly controversial.
Although issuance has been debated for years, this specific proposal and curve were withheld and not available for broad ecosystem input & review until now. Public communications suggest that the general shape of the proposal existed at least since June. If so, that makes the timing more concerning: the ecosystem only got the concrete curve at the PFI deadline, leaving no realistic opportunity for review or competing alternatives. There was also a general expectation that issuance changes would be considered in a later fork, not Hegota, so alternative proposals have not had a realistic chance to emerge and be compared.
Considering EIP-8363 for Hegota now risks framing it as the issuance-change proposal: either support this design or be seen as opposing issuance reform. That is the wrong process for a change of this magnitude.
Moreover, Hegota already has many important protocol changes under discussion, including censorship resistance, safer PoS, solo-staker improvements, faster slots, and L1 hardening. A rushed issuance redesign EIP would likely dominate the PFI → CFI → SFI window and distract from proposals that are more clearly scoped and already under review.
By contrast, other Hegota-related proposals — including Lido-authored EIPs such as EIP-8148 and EIP-8205 — were published months earlier, leaving time for public discussion before the PFI deadline. EIP-8363 has not had that process. There is an attempt to justify this by a sense of urgency due to the large entry queue; the urgency is vastly overblown, by misrepresenting the current facts and extrapolating based on them without looking at actual market demand. Moreover, this urgency, even if real, does not justify a full issuance curve redesign.
First read on the proposal
While it’s too early to have detailed feedback on such a deep topic, we share our first read on the EIP.
EIP-8363 bundles several goals together: preventing excessive staking, improving ETH’s monetary profile, protecting solo stakers, and improving capture resistance. Those are different objectives, and the proposal does not yet show that this curve solves them; in fact in some areas, it may make the problem worse.
Validator composition: Lower rewards may reduce total stake, but that does not mean Ethereum becomes more decentralized. It may push out marginal solo validators and on-chain staking protocols first, while large custodial or professional platforms remain because they have lower costs and strategic reasons to keep staking.
Zero issuance at 50% ETH staked: Targeting a staking range is one thing; fully cancelling issuance while a large share (50%) of ETH remains unstaked is a much stronger design choice. It effectively turns a staking-ratio target into a hard economic ceiling, with unclear effects on decentralization and validator-set resilience. For instance, the analysis ignores that a well-capitalized actor is incentivized to actually push equilibrium to this point and drive others out in order to get control of fork choice.
Second order impact: Moreover, cutting issuance at current staking levels risks removing economic room for staking ecosystem participants to fund decentralization work, operator diversity, research, security, and other public goods that Ethereum currently benefits from. An example is Etherum on ARM which admitted that they would need to shut down in case such an issuance curve is adopted.
If the urgent concern is excessive staking, that concern should be scoped narrowly. A separate proposal could evaluate a high-stake safeguard or contingency mechanism that activates only near a clearly dangerous range. That is different from using urgency around high staking ratios to consider a full issuance-curve redesign for Hegotá.
So our view is simple: continue the research, compare alternatives, model second-order effects, but do not consider EIP-8363 for Hegotá.