A new Ethereum research proposal is suggesting a way for validators to help fund the network’s future development by directing a small portion of their staking rewards toward ecosystem projects.
The idea, known as “validator redirected revenue,” would allow validators to contribute between 0% and 10% of their staking income to support Ethereum development, research, security, and infrastructure projects.
Under the proposal, validators would choose both the percentage of rewards they want to contribute and the organizations or projects they want to support. If more than 51% of validators vote for a contribution rate above zero, the system would make the contribution mandatory for all validators.
Supporters say the plan could help solve a long-standing issue in the Ethereum ecosystem. Many projects rely on shared tools, research, and security work, but only a small number of organizations currently pay for these resources.
The proposal estimates that Ethereum validators earn around 700,000 ETH per year. If 5% to 10% of those rewards were redirected, between 50,000 and 70,000 ETH could be raised annually for ecosystem funding. At current prices, that could be worth roughly $120 million each year.
Validators would only need to set their funding preferences once, and a special smart contract would automatically distribute the funds to selected projects. Potential recipients could include developer teams, security initiatives, research groups, and other organizations that help maintain and improve Ethereum.
However, the proposal has already sparked debate within the community.
One concern is that large groups of validators could work together to influence where the money goes. Critics also point out that many ETH holders stake through exchanges and staking services, meaning the platform operator—not the actual ETH owner—could decide how the redirected funds are allocated.
The discussion comes as Ethereum faces growing concerns about long-term funding. Earlier this year, former Ethereum Foundation contributor Trent Van Epps warned that core development funding could face challenges within the next few months, estimating that around $30 million per year may be needed to keep essential development work running smoothly.
Supporters believe the proposal could provide a stable and long-term funding source for Ethereum without relying heavily on a single organization or major donors. Critics, however, argue that it could effectively act as a new tax on staking rewards and raise difficult questions about governance and control.
For now, the proposal remains in the research stage and has not yet become an official Ethereum Improvement Proposal (EIP).
