Eigen Foundation Proposes New Incentive Model to Boost EIGEN Token Utility
The Eigen Foundation has proposed a governance change aimed at introducing new incentives for the EIGEN token to prioritize productive network activity and fee generation.
The proposal includes establishing an Incentives Committee responsible for managing token emissions. This committee would prioritize participants who secure Actively Validated Services (AVS) and contribute to expanding the EigenCloud ecosystem.
AVSs refer to blockchain-based services relying on EigenLayer's security, using staked tokens and operators for operation.
A new fee model would channel revenue from AVS rewards and EigenCloud services back to EIGEN holders, potentially creating deflationary pressure as the ecosystem grows.
The Incentives Committee, composed of representatives from the Eigen Foundation and Eigen Labs and ratified by the Protocol Council, would have the authority to adjust emissions without requiring contract upgrades.
Under the plan, 20% of AVS reward-related fees could be funneled into a fee contract for token buybacks. Additionally, fees from cloud-based services—including EigenAI, EigenCompute, and EigenDA—would be directed toward buybacks after operational costs are covered.
This revamp addresses limitations of the prior Programmatic Incentives framework, which issued new tokens weekly to support restaking and AVS participation.
While the timing of these changes has not been specified, criteria for incentives will be published in the future. The overall goal is to reward actively used and "productive stake" rather than passive restaking, with slashable tokens linking rewards to real participation and risk.
