Ethereum restaking protocol, EigenLayer, unveiled the “AVS Rewards” feature. This new functionality allows actively validated services (AVS) to allocate rewards to both stakers and operators. Additionally, the user interface was upgraded to offer them a frontend where they have an option to monitor and claim incentives.
Operators are now enabled to secure rewards by opting into AVSs that submit rewards information to the rewards coordinator, a central protocol contract. In each submission, an AVS is allowed to define a specific time period for allocating the rewards, assign weights to different strategies that determine how the rewards are distributed, and select an ERC-20 token to allocate them.
Operators are set to gain a fixed 10% commission on the rewards, with the remaining portion redirected to the stakers who have delegated to them. The incentive distribution is tied to the amount of stake each staker holds and the AVS’s assigned weighting of strategies within a given rewards submission.
EigenLayer has noted that, previously, AVSs lacked the capability to directly compensate network participants for the economic security and computing resources they provided on the mainnet. With this update, AVSs can now reward stakers and operators for contributions, whether they were made in the past, are ongoing, or will be made in the future.
One of the first AVSs to allocate rewards to stakers and operators will be EigenDA, a data availability (DA) solution developed by EigenLabs.
Introducing AVS Rewards Mainnet Launch
What
The Rewards update enables AVSs to provide rewards to stakers and operators and the UI upgrade provides stakers and operators a frontend to track and claim rewards.
Why
Previously, AVSs did not have the ability to directly reward… pic.twitter.com/DrabsiuSe1
— EigenLayer (@eigenlayer) August 12, 2024
EigenLayer Plans To Allocate 4% Of EIGEN Supply To AVS Rewards And Programmatic Incentives
It represents a protocol built on Ethereum that aims to extend Ethereum’s crypto-economic security to various new applications through distributed systems–AVSs. These AVSs are systems that require their own validation semantics for verification, encompassing sidechains, DA layers, and new virtual machines.
EigenLayer initially revealed its intention in July to launch AVS rewards along with programmatic incentives using the EIGEN token. In the first year, the program planned to distribute at least 4% of the total EIGEN supply.
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