This ELIP proposes an Incentive Council that operates under the oversight of the Protocol Council and has certain powers enabling it to improve the agility and outcomes of EigenLayer’s and EigenCloud’s incentive and emission programs. The full ELIP proposal is available for review on Github.
Executive Summary
EigenLayer has reached a moment where it can expand its incentive architecture to match the rapidly growing range of services, applications, and economic models emerging across the EigenLayer and EigenCloud ecosystems. The Programmatic Incentive framework introduced in earlier phases successfully jump-started restaking, brought stakers and operators together, and enabled early AVSs to activate with strong participation. This foundation was a necessary, productive starting point.
As the protocol matures, the programmatic nature of the current approach limits optionality and speed for iterating on incentives and we must evolve how we deploy EIGEN emissions to encourage the productive use of stake and the generation of meaningful organic AVS yield.
This proposal establishes a new Incentive Council, a focused, governance-accountable body empowered to direct how emissions are allocated while remaining firmly within limits defined by the Protocol Council and the underlying ELIP-approved inflation schedule. The council will help maintain the liveness of rewards distribution, encourage the continued growth of the EigenCloud ecosystem with agility and careful stewardship, and introduce fees that harness the value created across EigenCloud and AVSs that pass value to the EIGEN token being used to operate in EigenLayer.
It’s great to see a renewed push to focus on sustainable AVSs with real yield and real risk. EIGEN emissions should only be used to promote fee generation by AVSs. This creates a positive feedback loop that improves EIGEN’s sustainability. The current state of LRTs farming total stake incentives can’t go on for much longer - the market is already showing us this.
Excited for what’s to come!
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Great initiative — and very timely.
The EigenLayer ecosystem has done an incredible job bootstrapping early AVS activity through well-designed incentive programs. But with the landscape now expanding into more DeFi-focused, slashing-enabled applications – especially around insurance and reinsurance use-cases – it becomes increasingly important to adopt a more lean, adaptive incentive framework.
An Incentive Council can play a meaningful role here.
As new classes of AVSs emerge, their security assumptions and risk profiles differ significantly from earlier designs. These networks need agile, responsive emissions strategies that can iterate quickly, allocate stake more effectively and bootstrap initial adoption without over- or under-incentivizing participation.
This is especially relevant for restakers and LRTs:
Delegating to slashing-enabled AVSs inherently carries capital-loss risk, and early-stage AVSs often struggle to provide meaningful base yield at launch. A responsive Incentive Council could help bridge this gap by:
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Providing targeted EIGEN allocations to de-risk the early adoption phase.
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Increasing confidence among restakers/LRTs to delegate despite slashing risk.
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Supporting the next generation of high-impact, slashing-powered AVSs until their native revenues mature and base yield becomes the primary driver.
Overall, this proposal feels like a strong step toward ensuring EigenLayer’s incentive mechanisms evolve alongside the ecosystem — not behind it.
Excited to support and engage further as this develops!