Bankless

The EIP That Destroys DeFi | Stani Kulechov & Mike Silagadze

55 min

This episode of Bankless debates a controversial EIP that would slash Ethereum's staking yield by tapering new issuance. Host David interviews Stani Kulechov (Aave) and Mike Silagadze (EtherFi), who argue the proposal would kill solo staking, centralize the network, and destroy DeFi by removing the foundational yield layer that supports lending, borrowing, and institutional interest. They contend that the yield is not fake inflation but essential for a growing economy, and that Ethereum should focus on scaling and usability rather than internal yield tweaks.

Summarized by Podsumo

🎙️ Ask about this episode

✨ Key Takeaways

1

Solo stakers would go into loss at the proposed yield levels, forcing them to shut down nodes and handing control to large entities like Coinbase.
2

Removing ETH's base yield would decimate the top DeFi protocols because most of their lending and borrowing activity relies on this low-risk yield layer.
3

The proposal was submitted last-minute before a fork, damaging Ethereum's credibility with institutions and nation-states that require predictability.
4

Liquid staking derivatives already democratize yield and provide user protections that can't exist at the network level.
5

The Japanese yen carry trade analogy shows that zero-yielding assets become a 'funding leg'—borrowed and sold for productive assets, creating sell pressure on ETH.

💬 Notable Quotes

"_”If we really want to see Ethereum succeed, it has to replace the existing financial system. And to get there, we need the right levers. Having that yield brings institutions and solo stakers… otherwise, all that value goes into stablecoins and competing networks.”_ — Stani Kulechov"
"_”At 20 basis points, you’re only making one basis point of revenue. So you need massive scale. This is hugely centralizing. Seeing the argument that this will help decentralization is just bizarre.”_ — Mike Silagadze"
"_”If you mess with that foundational yield layer on top of which a lot of other things are stacked, you’re going to really break the system.”_ — Mike Silagadze"