Stani Kulechov, founder of Aave (AAVE), stated that the Ethereum community's proposal to limit the reward rate to 0% if half of the Ethereum (ETH) supply is staked could instead have a counterproductive effect on the ecosystem. He said, "This proposal is more likely to have a negative impact on the Ethereum ecosystem rather than achieving its intended effects. According to the proposal, if more than 50% of the total ETH supply is staked, the staking reward rate will be limited to 0%. In this case, staking yields become difficult to predict. This is because institutional investors, who prioritize stable cash flow, would turn their attention to other blockchain networks instead of ETH. A significant impact is also expected on the DeFi ecosystem. If staking rewards become 0%, most strategies utilizing ETH as loan collateral will lose profitability, and lending and interest income models using ETH will also be significantly curtailed. This proposal could reduce Ethereum's investment appeal and limit its growth potential," he pointed out.
