EIP-8363: THE UNMEASURED COST TO ONCHAIN CREDIT

Summary from the TLDR Crypto newsletter

EIP-8363 tapers consensus rewards to zero net issuance at 60.25M ETH staked (~half the supply), cutting total validator income ~50% at current stake levels, while leaving MEV untouched, which increases its share of validator revenue and strengthens incentives for aggressive extraction. The EIP's own authors acknowledge that LST looping drives most ETH lending yield, yet neither the proposal nor its cited research models the credit markets priced off the staking rate, where compressed spreads would cause borrowers to repay WETH debt, reduce lending utilization, and push deposit APY down faster than staking yield itself. With LSTs comprising ~40% of all onchain TVL, $2.6B in stablecoin debt collateralized by ETH/LST, and $11.4B in ETF and treasury inflows holding 7.8M ETH on corporate balance sheets, the taper puts a large portion of Ethereum's TVL lead at risk without modeled justification. Ship MEV burn first and model staking-yield-dependent lending markets before revisiting issuance. Post-Merge net ETH issuance already runs at 0.30%/year, below BTC (0.82%), gold (1.7%), and M2 expansion (5.5%).