EIP-8361 and Solana SIMD proposals target ETH/SOL supply, staking yields, and token burns
Galaxy Research says Ethereum and Solana are simultaneously reconsidering token supply via major governance proposals that could reshape staking yields, token burns, and overall disinflation.
Ethereum: EIP-8361 would scale how much ETH validator rewards get burned based on the network’s total staked ratio. If 50% of ETH is staked, up to 100% of validator rewards could be burned. Galaxy Research estimates consensus-layer yields at ~2.6% could fall to ~1.2%—about half—reducing validator earnings. The change would phase in over ~18 months after a future upgrade, targeted after the Glamsterdam upgrade (expected fall 2026), meaning full effects likely land around 2028. EIP-8361 is thus a longer-dated but meaningful structural shift.
Solana: Two proposals tackle supply from different angles. SIMD-0550 doubles the disinflation rate from 15% to 30%, pushing Solana’s inflation terminal floor to 2029 instead of 2032 (Galaxy Research: ~18.9M fewer future SOL emissions). SIMD-0553 also aims at higher burns by switching fee economics toward resource-based pricing, lifting daily SOL burns from ~650 to a projected 7,500–9,000 SOL/day (roughly 12x–14x).
Both sides cleared an important governance threshold (15% active stake support) to move into formal discussions and voting windows, marking an early stress test for Solana’s on-chain governance.
Overall, EIP-8361 and the Solana SIMD changes point toward more deflationary pressure and altered staking economics, which traders may reprice as expectations for future supply tighten—especially as upgrade timelines approach.
Bullish
The proposals lean toward tighter future supply: EIP-8361 can burn a larger share of ETH validator rewards as staking rises, while Solana’s SIMD-0550 accelerates disinflation and SIMD-0553 increases daily SOL burns materially. In past markets, similar “burn/disinflation” narratives (e.g., fee burn mechanisms and supply reduction upgrades) often trigger bullish repricing because they improve the medium-term supply/demand outlook.
However, the ETH impact is explicitly negative for near-term staking income (yields potentially halving to ~1.2%), which can dampen validator participation incentives and create short-term volatility. Solana’s changes also depend on adoption through governance and the realized level of resource-based fees.
Short term: traders may bid ETH/SOL on governance progress and “deflationary” expectations, but profit-taking/volatility risk increases around details like effective yields (ETH) and actual burn rates (SOL).
Long term: if timelines hold (EIP-8361 effects likely into ~2028; Solana changes via governance once approved), the market could increasingly price in reduced emissions and stronger burn-driven scarcity—supportive for sustained upside, albeit with periodic pullbacks as staking economics adjust.