The EIP That Destroys DeFi | Stani Kulechov & Mike Silagadze

The proposed Ethereum Improvement Proposal (EIP) regarding stake targeting and tapering threatens the stability and growth of the Ethereum ecosystem by attempting to artificially constrain ETH issuance. While intended to address concerns about excessive staking, the proposal risks centralizing the network by rendering solo staking economically unviable and forcing capital exodus from DeFi protocols. Stani Kulechov of Aave and Mike Silagadze of EtherFi argue that staking yields serve as a critical foundation for the Ethereum economy, and reducing them would diminish ETH’s utility as a productive asset. Instead of solving a core problem, this proposal undermines the security and financial infrastructure that developers and institutions rely upon. The current approach ignores the vital role of liquid staking derivatives in providing user protections and fails to account for the broader economic consequences of disrupting foundational yield layers.