Why Ethereum MUST Change Its Monetary Policy | Sam Jernigan and Jerome de Tychey

**David Hoffman** (0:02)
Bankless Nation, the debate around the EIP that changes issuance policy is not over. On this episode, I have Jerome de Tychey, founder of the ECC Conference and also one of the core authors and proponents behind EIP 8361, the stake targeting EIP. Jerome, welcome to Bankless.

**Jerome de Tychey** (0:21)
Thank you so much for having me. I'm also a sort of staker, and the official number is 8363 now. So, if you're looking for the EIP.

**David Hoffman** (0:30)
8363

**Jerome de Tychey** (0:31)
Yeah.

**David Hoffman** (0:32)
Also joining Jerome is Sam. Sam Jernigan, he is the ETH Maxi of Wall Street, the CIO of Lafayette Macro and CEO of Lafayette Digital Acquisition Core, probably one of the louder proponents on Twitter about stake targeting. Sam, welcome back to Bankless.

**Sam Jernigan** (0:48)
Nice to be back.

**David Hoffman** (0:49)
Jerome, let me just start with you. Since you're the core author and you really introduced this EIP into the zeitgeist and has caused much of gnashing of teeth and debates in the Ethereum community, what is the problem that we are trying to solve here? Why is this EIP important and urgent?

**Jerome de Tychey** (1:07)
Yeah, so there's many sub-questions in what you just asked. So let me try to be as short as possible. First, it's not an old problem. We knew about this issue for a few years now. Actually, since before even the launch of the proof of stake, we knew that the curve that we were using would probably have to be re-calibrated at some point.
The initial debate really started in late 2023 and had a first intense debate in early 2024 And then it was rekindled in late 2025 And now is the time to have this discussion again, mainly because at the current rate of entry of new EIF at stake, we are climbing away towards more than 50% of EIF at stake, very likely in 2028 I hope the time will tell and prove me wrong, but apparently at the current trend, it's clearly where we are going.
And the problem with having so much EIF at stake is that it's detrimental to our security, and it's also detrimental to EIF, the asset itself. So let's take a small step back. The current curve that is rewarding the validators for securing the network is very simply put, the more EIF at stake, the more EIF is printed. There is an incentive to stake that never really switches off. Even at 100% of EIF at stake, which will be like the limit, max limit, of course, like 100% of EIF at stake, we are about 1.5% yield. There is potentially no equilibrium possible for the staking market. Like all EIF will want to go at stake at some point. And for the silent majority, the EIF that are not yet at stake, well, they are paying for staking through dilution. So that's what we want to address. And this EIP is the conclusion of many years of research and also of the urgency of making this change now. Otherwise, the more we wait, the more painful it will be.
So we are introducing an off-stretch, a guarantee that the market will find an equilibrium, a burn that grows with the staking ratio. The more EIF at stake, the more a portion of the reward are burned. So the rewards will taper to zero at around half of the EIF at stake. And in practice, the market will of course up well before that. Actually, where the staking market will find it's at equilibrium.
And whenever the participation ends up being low, which is very unlikely, the curve still pays very well. So it guarantees that we have a good security for the network. So it's also sitting on a research like a minimum viable issuance, making sure that we are not overpaying for security. And something I like to stress from the get-go is that we have a history of not overpaying for our security and making changes in our monetary policy oftentimes at Ethereum, but always in the same direction downwards, like issuing less, deleting less our holders. And that's precisely why we're having this discussion right now.

**David Hoffman** (4:27)
I think a lot of what you said, Jerome, checks out to me and also at the same time, in order to change the monetary policy around Ether, you need to have overwhelming evidence that this is not just something in pursuit of a better outcome, but something like meaningfully catastrophic if we do not do this. And so maybe Sam, I'll throw this to you about like, some of the things that Jerome said is like, we're approaching 100% of ETH staked.