Originally published on: December 06, 2024
EigenLayer, known as Ethereum’s leading restaking protocol, is rolling out upgrades to its rewards system to provide more flexibility to both protocols and restakers. These improvements, outlined in a recent blog post on Dec. 6, allow third-party protocols working with EigenLayer, known as actively validated services (AVSs), to distribute rewards to validators based on their performance. Additionally, operators can now set fee rates independently, giving them more control over their earnings within the EigenLayer ecosystem.
The enhanced rewards program is set to launch on the mainnet in January, promising greater efficiency and customization for all participants. EigenLayer, established in 2023, has already attracted numerous AVSs and boasts nearly $19 billion in restaked collateral, as reported by DefiLlama.
Restaking, a process whereby tokens are used simultaneously to secure multiple protocols, has become increasingly popular within the EigenLayer network. With around 20 AVSs already operational and many more in development, EigenLayer continues to grow its ecosystem.
Notable AVSs include EigenDA, managed by EigenLayer developer Eigen Labs, and ARPA Network, specializing in trustless randomization. EigenLayer’s native token, EIGEN, was released on Oct. 1 to bolster the security of protocols against a wider range of vulnerabilities compared to existing proof-of-stake tokens like Ether (ETH).
Currently trading at approximately $4.92 per token, EIGEN’s market capitalization nears $8.25 billion, according to CoinMarketCap data. EigenLayer is dedicated to rewarding its restakers through initiatives like the programmatic incentives plan introduced on Sept. 17. This program offers EIGEN emissions equivalent to approximately 4% of the total token supply to incentivize stakeholder participation.
Founder Sreeram Kannan highlighted the benefits of these incentives, emphasizing that stakers receive rewards based on their support for AVSs, while AVSs, in turn, compensate stakers and operators. The program aims to foster value creation within the EigenLayer ecosystem, with Kannan stating, “The more AVSs pay, the more value gets allocated.”
ARPA Network, one of EigenLayer’s prominent AVSs, has already rewarded restakers with 14,000 native ARPA tokens weekly as part of the rewards program. As EigenLayer continues to innovate and expand its offerings, the future looks promising for participants seeking to maximize their rewards within the decentralized finance (DeFi) space.