EigenLayer Aims to Enhance Restaking Rewards

In a bid to enhance the overall experience for its users, EigenLayer, Ethereum’s largest restaking protocol, is upgrading its rewards program. The changes aim to grant more flexibility to protocols and restakers alike, as per a Dec. 6 blog post.

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Actively Validated Services (AVSs) Get a Boost

The upgrades will allow third-party protocols using EigenLayer, referred to as actively validated services (AVSs), to distribute rewards to validators based on their performance. Additionally, validators or ‘operators’ will have the ability to set fee rates independently, giving them more control over their earnings.

Greater Flexibility and Customization

The upgrades are designed to bring greater flexibility, efficiency, and customization to rewards within the EigenLayer ecosystem. By allowing AVSs to distribute rewards based on performance, protocols can incentivize validators to provide better service. This not only benefits the validators but also enhances the overall security of the network.

AVSs and Their Growing Presence

EigenLayer has secured dozens of AVSs since its launch in 2023. These AVSs have nearly $19 billion of restaked collateral, as per data from DefiLlama. Restaking involves taking a token that has already been staked and using it to secure other protocols simultaneously.

The Growth of EigenLayer

EigenLayer’s mainnet is currently home to around 20 live AVSs, with dozens more in development. Some notable AVSs include EigenDA, an AVS run by EigenLayer developer Eigen Labs, and ARPA Network, which specializes in trustless randomization.

Unlocking the Potential of EIGEN

On Oct. 1, EigenLayer unlocked its native token, EIGEN. Designed to secure protocols against a broader set of faults than existing proof-of-stake tokens like Ether (ETH), EIGEN has significant potential for growth.

Market Capitalization and Trading Price

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: A Key Driver of Growth

EigenLayer launched its programmatic incentives program on Sept. 17, aiming to woo restakers with EIGEN emissions comprising approximately 4% of the token’s total supply. The program rewards restakers based on how many AVSs they serve, and AVSs pay fees to stakers and operators.

The Impact of Rewards

Since September, ARPA Network has distributed 14,000 native ARPA tokens to restakers each week as part of EigenLayer’s rewards program. This demonstrates the potential for growth in rewards-based programs like EigenLayer’s.

Conclusion

The upgrades to EigenLayer’s rewards program are a testament to its commitment to innovation and user experience. By granting more flexibility to protocols and restakers, EigenLayer is poised to further establish itself as Ethereum’s largest restaking protocol.

Frequently Asked Questions

What is the purpose of the upgrades to EigenLayer’s rewards program?
The upgrades aim to grant more flexibility to protocols and restakers, allowing for greater customization and efficiency in rewards within the EigenLayer ecosystem.
How will AVSs benefit from the upgrades?
AVSs will be able to distribute rewards based on performance, incentivizing validators to provide better service. Validators or ‘operators’ will also have the ability to set fee rates independently.
What is the significance of EIGEN’s market capitalization and trading price?
As a native token designed to secure protocols against a broader set of faults, EIGEN has significant potential for growth. Its current market capitalization and trading price demonstrate its appeal as an investment opportunity.

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