Eigen plans higher incentives for active network restakers

Eigen Foundation intends to increase the amount of rewards to active restakers on the Eigen protocol

ContentsRewards Committee to redefine rewardsWeekly minting and protocol governanceCommunity observation and inspectionIt is a project to focus on effective network participation and token economics reconciliation with application in the real world. One more Committee, named the Incentives Committee, will manage a token emission and reward those who use Active Validated Services.

Rewards Committee to redefine rewards

Incentives Committee will organize the distribution of EIGEN tokens and concentrate on fee generation activities. Some of the proposed changes are a 20% fee on AVS rewards on stakes backed by EIGEN incentives. EigenCloud service and AVSs fees will be directed to a contract of fees, which may be redeemed through token buybacks

Ecosystem incentives will only be applicable to AVSs that are fee-paying. The committee will also aim to decrease incentives on lazy stakes and shift emissions to productive redistributable or slashable stakes.

Also, the committee will be able to adjust the staking incentive to motivate the paid utilization of EigenCloud services. This design enables this to allocate a token emission flexibly without the need to upgrade significant contracts to ensure the rewards track the network activity.

Weekly minting and protocol governance

In the framework of the proposed model, the number of EIGEN minted per week will be governed by the governance, though amendments will have to be approved by the Protocol Council. Reward distribution contracting will be implemented behind upgradable proxies managed by the Protocol Council. These proxies will be time locked and will work together with Hopper and ActionGenerator mechanism of Programmatic Incentives.

Any alterations will not affect existing operators and stakers and weekly rewards will remain until the Incentives Committee proposes otherwise. The decisions of the committee will be based on the preferences of fee-generating AVSs and productive network stakes, entrenching the long-term worth of the protocol and ecosystem efficiency.

Community observation and inspection

The entire proposition involves the release of ELIP to the community. In case of necessity, an open call will be carried out, and all the remarks will be discussed in the Protocol Council before it is implemented

The structure of the Incentives Committee will be based on the charter, which defines the powers, membership, transparency, and coordination with the council. Future modifications and possible post-ELIP follow-ups will be informed by community oversight and performance monitoring.

Eigen Foundation assumes that such changes will enhance the EIGEN tokenomics, contribute to the growth of AVS, and generate sustainable incentives to network participants. The strategy will have the goal of rewarding productive action as the ecosystem will grow in concord with the real-life adoption of the service.