| Author(s) | @abbey on behalf of Protocol Council |
|---|---|
| Created | Fri Jan 17, 2025 |
| Proposal | 0x8b701230dbea384b04e106e99bc573a93dd635252a77acfbc61b978877ff9b85 |
| Status | Approved |
This document is an official communication between the Protocol Council and the EigenLayer community. It aims to increase transparency within the EigenLayer ecosystem regarding upcoming protocol upgrades and network changes.
In this report, we present the outcome and evaluation of the Protocol Council’s review of ELIP-001: Rewards v2.
ELIP Overview
Author(s): @matt.nelson, Rajath Alex, Scott Conner, Sean McGary (all Eigen Labs)
This proposal introduces an iteration to EigenLayer Rewards (v2), an upgrade designed to enhance the flexibility of rewards within the EigenLayer ecosystem. Through feedback from AVSs and Operators following the release of the first iteration of Rewards, we are proposing an expansion to platform rewards functionalities. Rewards v2 is a lightweight addition to the rewards structures and contracts that address key rewards use-cases:
- Performance-based and directed rewards from AVSs to Operators,
- Variable Operator fee on AVS rewards,
- Operator split for Programmatic Incentives specifically,
- Batch rewards claiming for Stakers and Operators.
Together, these changes will help enable broad flexibility in the ecosystem: more AVSs can reward Operators, more Operators can run different AVSs with variable fee rates, and Stakers will have data to discover which services and forms of security AVSs value.
Council Evaluation
The Protocol Council unanimously approves ELIP-001 for execution. All five Council members plan on voting in favor of ELIP-001.
The Council believes that Rewards v2 makes EigenLayer a more attractive framework for AVSs and operators due to the flexibility it provides them while maintaining EigenLayer’s credible neutrality. We’re particularly excited about the permissionless verifiability properties that come with Rewards v2, allowing anyone to perform rewards calculations offchain. We believe these new features can unlock additional AVS and Operator use cases while introducing simple quality-of-life improvements to the claiming experience for Stakers and Operators.
The ELIP addresses a well-defined need that has already been articulated by AVSs and operators and it’s clear how the improvements will positively impact the health of the ecosystem and protocol. There has been adequate opportunity for public commentary and testing among ecosystem participants and the ELIP has received positive feedback from the community, based on forum post interactions.
The Council believes that the team responsible for the development of the PR has held security in extremely high regard. Proper auditing and automated testing has taken place, audits are publicly available in the ELIP itself, and all significant issues raised have been addressed by the development teams. The Sigma Prime team itself has conducted several thorough security assessments targeting the new components to be added, namely the updated Solidity smart contracts and the sidecar Golang software. New pausing functionality has also been added to mitigate potential issues with the added functionality introduced with this improvement proposal.
While the ELIP header claims it was created on Oct 18, 2024, there is no mention of its existence on the ELIP repository (which already existed at the time). In addition, a forum post with a clear nomenclature and proposal corpus did not exist at that date either. Both were created on December 4th instead. We understand that this is due to the ELIP process being introduced in tandem with the creation of this ELIP so do not believe this is a blocking concern but moving forward, suggest timelines not only coincide with reported values in the corpus of the improvement proposal but also create space for a longer discussion period like the Oct 18 date represents.
Additional Notes
-
It’s important to highlight that the Sidecar review conducted by Sigma Prime identified several acknowledged issues, with their resolutions deferred to a later update coming with ELIP-002. This further highlights the need to get slashing functionalities out the door. In addition, the Sidecar review clearly demonstrates there is less internal QA in the sidecar codebase than there is in the smart contracts codebase (the core protocol changes), which is expected.
-
As this is the initial iteration of the Protocol Council and first ELIP review, certain processes are still in their early stages. The current timelines and practices may not fully align with community expectations or industry best practices. To address this, the Council encourages community members to raise their concerns on the forum to ensure that all feedback can be received and incorporated into future ELIP reviews. All improvements to Protocol Council processes will be discussed and disclosed on forum.eigenlayer.xyz