EigenLayer announces the launch of "Rewards v2" upgrade that set to launch the mainnet in January

EigenLayer, Ethereum's largest restaking protocol, is upgrading its rewards program to bring greater flexibility to protocols and restakers.

The changes will allow third-party protocols, known as actively validated services (AVSs), to distribute rewards to validators based on performance. Validators, or "operators," will also be able to set fee rates independently.

Coming Soon: Rewards v2

On Dec 6, 2024, Eigen Labs has announced its upcoming "Rewards v2" protocol upgrade, aiming to enhance flexibility, efficiency, and customization for users within the EigenLayer ecosystem.

The upgrade, which represents the first EigenLayer Improvement Proposal (ELIP) under the newly introduced EigenLayer Governance process (EigenGov), promises to bring significant advancements to the platform's reward functionalities.

Key Features of Rewards v2

The "Rewards v2" upgrade introduces several enhancements to improve reward dynamics and operational efficiency:

• Operator-Directed Rewards: Application-specific Validators (AVSs) will now have the ability to reward operators based on performance or custom logic, ensuring alignment with specific goals.

• Variable Operator Fees: Operators can set customized fee rates per AVS, encouraging economic flexibility and diverse participation.

• Batch Rewards Claiming: Both stakers and operators can claim multiple rewards in a single transaction, significantly reducing gas costs.

These features enable AVSs to design dynamic and tailored reward mechanisms, better aligning incentives with their operational needs.

Launch Timeline

• Testnet Deployment: Scheduled for December 12, 2024, on the Holesky testnet.
• Mainnet Deployment: Planned for January 2025, pending successful testing and integration.

While these dates are tentative, Eigen Labs is committed to thorough testing to ensure a smooth rollout.

The Rationale Behind Rewards v2

"Rewards v2" is designed as an optional and lightweight addition to existing reward structures. It addresses key feedback from AVSs and operators following the launch of the initial rewards iteration. By offering greater customization and economic flexibility, this upgrade is poised to play a pivotal role in driving value across the Eigen Economy.

Implementation Strategy

The upgrade will initially roll out on the Holesky testnet, allowing AVSs to conduct rigorous testing and integration before Mainnet deployment. Post-launch, Eigen Labs will monitor adoption and track improvements through on-chain event indexing, providing valuable insights into the protocol's success.

Community Engagement

Eigen Labs is encouraging active participation in the governance discussion for ELIP-001: Rewards v2 through the EigenLayer forum. The proposal represents a milestone in the ecosystem's evolution and highlights the potential of decentralized governance in driving innovation.

Stay tuned for updates as "Rewards v2" moves closer to reshaping the reward dynamics within EigenLayer's growing ecosystem.

These upgrades are designed to enhance flexibility, efficiency, and customization within the EigenLayer ecosystem. The upgrades are set to launch on the mainnet in January.