Ethereum Reward Redirect
Ethereum Proposal Seeks To Redirect 10% of Validator Rewards To Fund Ecosystem Public Goods
Anonymous
Key Points
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The proposal was reported as emerging on June 22 on the Ethereum Research forum, framing it as a new step in the long-running ecosystem-funding debate.
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The authors estimate validators earn about 700,000 ETH per year in staking rewards; under that baseline, a 5%–10% redirect would translate to roughly 50,000–70,000 ETH annually sent to the ecosystem fund.
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Beyond setting a redirect rate, validators would also “signal… the addresses they want to support,” and could choose recipients “once and then leave the setting in place”; a “splitter contract” would route redirected funds according to validator preferences, with the design meant to avoid voting on every grant.
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The proposal itself highlights a specific cartelization risk: if a majority coordinated, they could push the redirect rate higher and route funds “to favored groups or even back to themselves.”
A new proposal on the Ethereum Research forum would let validators redirect up to 10% of their staking rewards into a shared ecosystem fund — and if 51% of validators agree on a rate, that cut becomes mandatory for everyone. The plan, published June 21 by Kleros founder Clément Lesaege, could divert roughly 50,000 to 70,000 ETH per year — worth about $120 million — away from validators' normal payouts, according to The Block.
The proposal is already drawing fierce debate. Supporters call it a fix for Ethereum's "free rider" problem. Critics are calling it a tax. No formal Ethereum Improvement Proposal has been filed yet, and no timeline exists for implementation, Crypto Briefing reported.
How the Redirect Mechanism Would Actually Work
Validators currently earn about 700,000 ETH per year at a roughly 1.91% reward rate, according to Crypto Times. Under the proposal, each validator would signal a redirect rate between 0% and 10%. If more than 51% back the same rate, that rate becomes binding network-wide. A "splitter contract" would then automatically route the redirected ETH to recipient addresses validators choose.
Validators would only need to pick their preferred recipients once. The design avoids requiring a vote on every individual grant. Lesaege framed the problem as a "coordination failure," arguing that large staking entities profit from shared infrastructure without paying to maintain it, The Block reported.
$120 Million for Public Goods — or a Forced Tax on Validators
Supporters see the fund as a self-sustaining R&D budget for Ethereum. Gnosis co-founder Martin Köppelmann said it is "the first 'funding public goods' proposal I've seen that I wouldn't dismiss immediately," praising the fact that there is "no hardcoded recipient." The idea is that better-funded security and development would raise ETH's value, offsetting validators' smaller yields.
Critics push back hard. Rotki founder Lefteris Karapetsas warned the plan risks creating a "cartel of top stakers" that overrides smaller validators. Gabriel Shapiro of MetaLeX Labs called it an attempt by insiders to extract value as Ethereum grows more competitive, according to Crypto Briefing. Dankrad Feist, a former Ethereum researcher, was openly skeptical about guaranteed payment for work.
Cartelization Risk: Who Controls the 51% Vote
The proposal itself flags its biggest danger: a majority of validators could coordinate to push the redirect rate to its 10% ceiling and steer funds "to favored groups or even back to themselves." A small number of large liquid staking providers already control enough staked ETH to clear that 51% threshold without needing solo validators on board, according to Crypto Briefing.
Solo validators, who already run on thin margins, could find a 10% reward cut makes their operations unprofitable. That would push more ETH into large staking pools — the very entities that could dominate the vote. Protocol Guild organizer Trent Van Epps welcomed exploring the design space but called certain trade-offs in the current proposal "disqualifying," Crypto Times noted.
Proposal Arrives as Ethereum Foundation Tightens Its Budget
The timing is not accidental. The Ethereum Foundation has been winding down several long-running grant programs, raising concerns about a funding gap for core protocol work. Lesaege's proposal directly targets that gap, arguing that voluntary funding models like Gitcoin have never fully solved the free-rider problem, according to eritvnews.com.
Any implementation would require a hard fork — a network-wide software update that all node operators must adopt. A contentious fork could split the chain, similar to the 2016 DAO hack response. For now, the idea sits at the research stage with no EIP number, no client-team support, and a community that remains sharply divided, Crypto Briefing reported.
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