Independent organization dedicated to the growth of the EigenLayer ecosystem, the Eigen Foundation and research organization Eigen Labs released disclosures concerning the treatment of staking rewards for investors.
In terms of staking rewards, the total annual EIGEN rewards for stakers are capped at 1% of the total initial EIGEN supply, capping the total amount of annual emissions to EIGEN stakers. This equates to 25% of annual programmatic incentives going to EIGEN staking, while the remaining 75% go to ETH and ETH-equivalent staking.
The protocol’s incentive model features a unique inflationary approach that aims to balance benefits, ensuring that staking rewards are directed toward non-investor users staking ETH and ETH equivalents. This approach contrasts with other proof-of-stake (PoS) protocols, where rewards are often exclusively distributed to native token stakers, thereby favoring contributors who stake asymmetrically.
Investors are permitted to stake EIGEN and non-EIGEN assets on the platform. Contracts with investors required that investors be permitted to stake EIGEN and that any rewards be unlocked.
The maximum annual rewards available to all EIGEN stakers, including investors, is 1% of the total initial EIGEN supply. These rewards can be claimed weekly but are distributed linearly over a full year. Notably, this 1% includes all EIGEN stakers, along with investors.
It’s important to highlight that both the Eigen Labs and Eigen Foundation teams have restricted the members from taking part in staking for at least the first year. Furthermore, contributors were not eligible for stakedrops based on EIGEN staking. They will only start accumulating rewards for EIGEN staking with upcoming programmatic incentives.
EigenLayer and Its Transfer Restrictions On EIGEN Token
EigenLayer functions as a protocol developed on the Ethereum network with the objective of extending Ethereum’s crypto-economic security to a range of new applications through distributed systems–AVSs.
Recently, it lifted transfer restrictions on its native EIGEN token, allowing token holders to freely transfer their assets, including tokens received through airdrops. In addition, the EIGEN token has become available for trading on multiple exchanges. This removal of restrictions took place following the distribution of EIGEN tokens through EigenLayer’s two stakedrop events, which were drawn from an initial total supply of 1.67 billion tokens.
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