EigenLayer Introduces AVS Rewards and EIGEN Programmatic Incentives

EigenLayer
is
poised
to
introduce
new
rewards
and
incentives
aimed
at
benefiting
stakers
and
operators
within
its
ecosystem.
According
to
EigenLayer
Blog,
the
Actively
Validated
Services
(AVSs)
will
soon
gain
the
ability
to
reward
participants,
marking
a
critical
development
in
the
protocol’s
evolution.

AVS
Rewards
and
Programmatic
Incentives

The
upcoming
programmatic
incentives
will
see
at
least
4%
of
EIGEN’s
total
supply
distributed
to
stakers
and
operators.
These
incentives
will
be
delivered
through
a ‘rewards-boost’
mechanism,
where
participants
receive
EIGEN
in
proportion
to
the
rewards
distributed
by
AVSs.
This
mechanism
is
designed
to
kickstart
the
rewards
flywheel
and
enable
price
discovery,
even
if
initial
AVS
rewards
are
low.

Moreover,
the
Season
2
stakedrop
will
reward
current
stakers
and
operators,
with
further
details
to
be
announced
by
the
Eigen
Foundation
soon.

Introducing
AVS
Rewards

EigenLayer,
which
launched
its
mainnet
contracts
on
June
14,
2023,
currently
boasts
4.8
million





ETH
and
108
million
EIGEN
restaked,
with
over
300
operators
running
AVSs
and
16
launched
AVSs.
The
protocol
aims
to
be
a
permissionless
marketplace
for
blockchain
protocols
to
elastically
rent
stake
and
high-quality
operator
sets.

In
the
coming
weeks,
EigenLayer
will
launch
its
initial

Rewards
functionality,
allowing
stakers
and
operators
to
be
rewarded
for
their
participation.
This
marks
a
significant
step
towards
enabling
price
discovery
for
the
value
of
stake
and
compute
provided
via
EigenLayer.

Boosting
Rewards
with
Programmatic
Incentives

The
rewards
functionality
enables
AVSs
to
distribute
tokens
to
their
stakers
and
operators.
Given
the
newness
of
this
functionality,
AVSs
are
expected
to
take
time
to
integrate
their
systems.
Initially,
the
total
rewards
distributed
directly
by
AVSs
will
likely
be
small.
To
address
this,
EigenLayer
will
introduce
a
programmatic
incentives
program
designed
for
AVS ‘reward-boosts,’
in
which
EIGEN
will
be
automatically
distributed
to
stakers
and
operators
based
on
the
rewards
distributed
by
each
AVS.

For
the
first
year,
at
least
4%
of
EIGEN’s
total
supply
will
be
distributed
through
this
program.
This
design
encourages
AVSs
to
distribute
rewards
early
to
benefit
from
a
larger
share
of
the
early
EIGEN
incentives.
Additionally,
a
small
portion
of
EIGEN
incentives
will
be
allocated
to
stakers
and
operators
of
AVSs
that
are
not
yet
distributing
rewards,
setting
a
rewards
floor
outside
of
the
rewards-boost
design.

Interacting
with
Rewards

Stakers
and
operators
can
claim
rewards
via
both

app.eigenlayer.xyz
and
the

eigenlayer-cli.
Operators
can
earn
rewards
by
opting
into
as
many
AVSs
as
possible
without
incremental
slashing
risk,
as
slashing
is
not
yet
live.
EigenLayer
will
include
a ‘unique
security’
mechanism
to
mitigate
future
slashing
risks.

AVS
developers
can
customize
various
parameters
in
their
rewards,
such
as
the
type
of
ERC-20
token
used,
the
amount
distributed,
and
the
distribution
logic
for
operators.
Full
details
can
be
found
in
the
‘AVS
Integrations’
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
programmatic
incentives
is
anticipated
to
benefit
all
ecosystem
participants,
fostering
a
blossoming
economy
within
EigenLayer.

Image
source:
Shutterstock