Introducing Programmatic Incentives v1
The Eigen Foundation is excited to announce the upcoming Programmatic Incentives v1 release, a new EigenLayer protocol feature, providing programmatic EIGEN rewards to stakers and operators for their active participation in supporting AVSs.
What
Programmatic Incentives v1 will enable weekly programmatic rewards of newly-minted EIGEN tokens to qualifying stakers and the operators they delegate to. These incentives will be retroactive based on staking since August 15, 2024, and will become claimable on a weekly basis starting in October 2024. Details and timeline for claiming are provided below.
In the first year, Programmatic Incentives v1 will distribute ~66,945,866 EIGEN, equivalent to 4% of the EIGEN token’s initial supply of ~1,673,646,668 tokens:
- 3% to ETH and LST stakers and operators (ETH and LSTs are weighted equally)
- 1% to EIGEN stakers and operators
Distribution
Programmatic Incentives v1 is initially configured to distribute EIGEN as follows:
- Linearly Distributed: ~1,287,420 EIGEN will be distributed weekly to stakers and operators, beginning August 15, 2024
- Proportional to Stake: EIGEN will be distributed to eligible stakers and operators proportional to delegated stake
- Fixed Operator Commission: 10% of the distributions (~128,742 EIGEN per week) will go to operators that have received delegations from stakers, and the remaining 90% (~1,158,678 EIGEN per week) will go to stakers. These percentages may change with future updates (more below)
Qualification
To receive Programmatic Incentives:
- Operators must be registered to at least one AVS
- Stakers must be delegated to an operator that is registered to at least one AVS
The Programmatic Incentives distribution and eligibility configurations will evolve over time, adapting to the changing needs of the ecosystem to incentivize valuable engagement with protocol features and securing the AVSs built on top. Future updates that are being explored include:
- Rewards Boost: EIGEN will be distributed weekly to stakers and operators of each AVS proportional to the amount of rewards distributed by each AVS
- Rewards Floor: a small portion of EIGEN programmatic rewards will be allocated to stakers and operators of AVSs that are not yet distributing rewards
- Variable Operator Commissions: commission rates will be flexible, replacing the hardcoded 10% operator commission and enabling the development of an operator marketplace
Claiming
Programmatic Rewards employs the same Rewards infrastructure that is now available for all AVSs to distribute rewards to stakers and operators, and will accrue and be claimable by stakers and operators in the same place and in the same way as Rewards from EigenDA and other AVSs.
Weekly programmatic rewards will be available to claim every Tuesday at 19:00 UTC. Below is the anticipated timeline for rollout of Programmatic Incentives v1 and opening of claims for programmatic rewards:
- Thursday, August 15, 2024: Programmatic rewards began accruing to all qualified stakers & operators as detailed above
- Tuesday, October 1, 2024: Rewards accrued will appear as ‘Lifetime Earned Rewards’, an upcoming addition to the EigenLayer dApp, and will continue to be updated daily
- Tuesday, October 8, 2024: Claiming becomes available for qualified stakers and operators
Accrued weekly programmatic rewards will not expire and can be claimed at any time after they accrue, beginning on Tuesday, October 8, 2024:
- Direct Stakers and Operators: will be able to claim on the EigenLayer dApp, CLI, or directly via smart contract
- LRT Stakers: the LRT protocol will accrue the weekly programmatic rewards, and LRT users should engage with their respective LRT protocols to understand how rewards will be managed
Why
This upcoming release marks a significant milestone for EigenLayer and the broader restaking ecosystem as EigenLayer transitions from retroactive incentives (points and stakedrops) towards continuous liquid rewards via Programmatic Incentives, ultimately creating a market for price discovery of shared security.
- Providing predictable rewards
Credible commitment to distribute rewards to stakers and operators actively participating in providing restaked security. - Subsidizing restaking marketplace
Base level of rewards for stakers and operators effectively lowers the cost of restaked security for AVSs. - Strengthening Incentive Alignment
Qualification criteria encourages positive actor participation. Stakers must now delegate and operators must run an AVS to qualify for programmatic rewards.
Upon release of Programmatic Incentives v1 on mainnet, a followup blogpost will be published with more details on technical implementation, claiming considerations, and links to supporting documentation and resources.
This post was written by Eigen Foundation. Eigen Foundation is a Cayman Islands foundation company dedicated to supporting the EigenLayer protocol and community. More information about Eigen Foundation can be found here.