EigenLayer is ready to introduce new rewards and incentives that will benefit stakers and operators within the ecosystem. According to the EigenLayer blog, Actively Validated Services (AVS) will soon gain the ability to reward participants, which represents a significant step forward in the evolution of the protocol.
AVS Rewards and Programming Incentives
In the upcoming program incentives, a minimum of 4% of the total supply of EIGEN will be distributed to stakers and operators. These incentives will be provided through a ‘Reward Boost’ mechanism, where participants will receive EIGEN in proportion to the rewards distributed in AVS. This mechanism is designed to start the rewards flywheel and enable price discovery, even if the initial AVS rewards are low.
Additionally, the Season 2 Staking Drop will reward current stakers and operators, with more details to be announced soon by the Eigen Foundation.
Introducing AVS Rewards
EigenLayer, which launched its mainnet contract on June 14, 2023, currently has 4.8 million Ethereum And 180 million EIGEN have been re-staken, 300+ operators are running AVS, and 16 AVS have been launched. The protocol aims to be a permissionless marketplace where blockchain protocols can flexibly lease stake and high-quality operator sets.
In the coming weeks, EigenLayer will be launching an initial rewards feature that will allow stakers and operators to earn rewards for their participation. This is a key step towards enabling price discovery for the value of the stake and compute provided through EigenLayer.
Enhance rewards with programming incentives
The rewards feature allows AVS to distribute tokens to stakers and operators. Given the new nature of this feature, AVS is expected to take some time to integrate the system. Initially, the total rewards distributed directly by AVS will likely be small. To address this, EigenLayer will introduce a program incentive program designed to ‘boost rewards’ AVS, where EIGEN will be automatically distributed to stakers and operators based on the rewards distributed by each AVS.
In the first year, a minimum of 4% of the total supply of EIGEN will be distributed through this program. This design encourages AVS to distribute rewards early, thereby taking advantage of a larger share of the early EIGEN incentives. Additionally, a portion of the EIGEN incentives will be allocated to AVS stakers and operators who have not yet distributed rewards, thereby establishing a reward floor outside of the reward boost design.
Interaction with rewards
Stakers and operators can claim rewards via app.eigenlayer.xyz and eigenlayer-cli. Operators can join as many AVS as possible to receive rewards without the risk of gradual slashing, as slashing is not yet enabled. EigenLayer will include a ‘unique security’ mechanism to mitigate slashing risks in the future.
AVS developers can customize various parameters of rewards, including the type of ERC-20 token used, the amount distributed, and the operator’s distribution logic. More details can be found in the AVS Integration documentation.
The Future of EigenLayer
As EigenLayer continues to mature, the protocol expects the AVS ecosystem to grow significantly. The introduction of AVS rewards and programming incentives is expected to benefit all ecosystem participants and foster a flourishing economy within EigenLayer.
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