Key Points:

• EigenLayer, Ethereum’s largest restaking protocol, announced the Rewards v2 upgrade, introducing features to enhance flexibility for protocols and validators.
• The EigenLayer Rewards v2 upgrade is the first ELIP under the newly established EigenGov governance process by the Eigen Foundation.

EigenLayer, Ethereum’s biggest restaking protocol, is releasing an upgrade to its rewards program that includes overhauls to make it more flexible for protocols and validators.

Read more: EigenLayer X Account Hack Still Under Investigation With Cause Unknown

EigenLayer Rewards v2 Upgrade Unveiled for More Flexibility

Detailed in a Dec. 6 blog post, the EigenLayer Rewards v2 upgrade is the first EigenLayer Improvement Proposal under the recently launched EigenLayer Governance Process.

The EigenLayer Rewards v2 focuses on expanding the functionalities that the platform has with rewards by adding operator-oriented rewards to enable AVSs to reward operators based on their performance or custom logic. The proposal introduced variable operator fees, which gave operators the power to adjust their fee rates for flexibility in economic viability and other factors that will attract varied participants.

The EigenLayer Rewards v2 also supports batch reward claiming, stakers, and operators can claim multiple rewards in a single transaction; this highly reduces gas costs.

Amplifying Rewards for ETH Stakers Through Restaking

EigenLayer explains itself as the first restaking protocol on Ethereum, allowing ETH stakers to reutilize their staked tokens on the consensus layer. The participants grant permission to the smart contract of EigenLayer to impose extra slashing conditions on their staked ETH in exchange for extra revenue opportunities through service provision.

The platform benefits third-party protocols using EigenLayer, enabling them to distribute rewards in direct relation to the performance of validators. Validators, in this context called operators, can independently set their fees, allowing greater economic participation.