Introducing EigenDA Base Rewards
Last week EigenLayer experienced a major upgrade. The Rewards protocol, the onchain system that enables AVSs to distribute rewards to their stakers and operators, went live on mainnet on August 6th. The Rewards protocol upgrade grants AVSs the ability to begin rewarding stakers and operators for their past, present, and future support. See documentation here.
In addition to this upgrade, EigenLayer announced its initial proposal for programmatic incentives for ETH and EIGEN quorums which will boost AVS rewards with 4% of EIGEN’s total supply over the next year.
Today, EigenDA is announcing the EigenDA Base Rewards Program to take advantage of both of these developments. On Tuesday, August 13th, EigenDA will begin rewarding its stakers and operators with a relatively small amount of ETH each month. The monthly rewards will start at 10 ETH and ramp up over time.
Why are we launching the Base Rewards Program?
We want EigenDA to qualify for the programmatic incentives program so that EigenDA stakers and operators are compensated for the security and work they contribute to running the network. The way the programmatic incentives program will work is it will distribute a certain amount of EIGEN each month to AVSs' stakers and operators in proportion to the amount of rewards that their AVS paid out of pocket.
When are we launching this program?
Although the start date for qualifying for programmatic incentives has not been announced, EigenDA will start sending rewards to stakers and operators on Tuesday, August 13th, in order to test the EigenLayer rewards protocol and set a good example for the ecosystem. The initial 10 ETH will be distributed over 28 days, starting backdated on August 7th and continuing through September 4th, 2024. A monthly cadence will continue from there.
Why start base rewards at 10 ETH per month?
Given the proportional distribution of programmatic incentives, we want to start with a smaller reward to set a manageable benchmark for other AVSs to qualify for similar incentive rewards initially.
How will the rewards ramp up?
While the monthly rewards will begin at 10 ETH, we plan to gradually increase them until they fully cover the monthly operator expenses for EigenDA, which we estimate to be $160,000 across 400 operators, or $400 per operator. We want this to set a precedent for ecosystem participants, as we believe it’s essential for AVSs to adopt rewards models that at least cover operator costs.
Finally, let's quickly cover the endgame of EigenDA rewards. With EigenDA adoption picking up steam, we expect revenue from projects paying for EigenDA usage to greatly exceed $160,000 monthly. Once revenue starts flowing for EigenDA, most of this will be emitted to EigenDA stakers and operators via this same rewards mechanism.
With the upcoming launches of low-latency dispersal, 20MB/s throughput, permissionless rewards and data availability sampling, EigenDA seeks to establish itself as the premier solution for scaling Ethereum's write capacity. We look forward to building the future together with you.