EigenLayer to upgrade restaking rewards

EigenLayer, Ethereum’s largest restaking protocol, is upgrading its rewards program to grant more flexibility to protocols and restakers, according to a Dec. 6 blog post. 

The changes let third-party protocols using EigenLayer — dubbed actively validated services (AVSs) — distribute rewards to validators based on performance. They also let validators, or “operators,” set fee rates independently, EigenLayer said.

The upgrades are “designed to bring greater flexibility, efficiency, and customization to rewards within the EigenLayer ecosystem,” the restaking protocol said in a Dec. 6 post on the X platform.

EigenLayer said the upgrades will launch on the mainnet in January.

Largest restaking protocol 

Launched in 2023, EigenLayer has secured dozens of AVSs, with nearly $19 billion of restaked collateral, according to DefiLlama.

Restaking involves taking a token that has already been staked — posted as collateral with a validator in exchange for rewards — and using it to secure other protocols simultaneously. 

Some 20 AVSs are already live on EigenLayer’s mainnet, and dozens more are in development.

They include EigenDA — an AVS run by EigenLayer developer Eigen Labs — and ARPA Network, which specializes in trustless randomization.

On Oct. 1, EigenLayer unlocked its native token, EIGEN. It is designed to secure protocols against a broader set of faults than are addressable using existing proof-of-stake tokens, such as Ether (ETH), according to EigenLayer.

As of Dec. 6, EIGEN trades at around $4.92, implying a fully diluted market capitalization of nearly $8.25 billion, according to CoinMarketCap.

Rewards program

On Sept. 17, EigenLayer launched a programmatic incentives program to woo restakers.

The program will reward restakers with EIGEN emissions comprising approximately 4% of the token’s total supply.

“Stakers will get programmatic rewards depending on how many AVSs they serve, and AVSs will pay fees to stakers and operators,” EigenLayer’s founder, Sreeram Kannan, told Cointelegraph in October.

“The more AVSs pay, the more value gets allocated,” said Kannan.

Since September, ARPA Network has distributed 14,000 native ARPA tokens to restakers each week as part of EigenLayer’s rewards program.

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