The Eigen Foundation has published a pivotal governance proposal to fundamentally restructure the incentive model for its EIGEN token on the EigenLayer network. The plan aims to shift rewards away from a passive, uniform distribution system and instead tie them directly to measurable network activity and fee generation.
The proposal introduces a new structure centered on two primary pillars: rewarding participants who secure Actively Validated Services (AVS)—blockchain-based middleware services that rely on EigenLayer's restaking security—and those who add capacity to the broader EigenCloud ecosystem, which includes services like EigenAI, EigenCompute, and EigenDA.
To manage this dynamic system, the foundation plans to establish an Incentives Committee. This committee will be responsible for directing programmatic token emissions, allocating more incentives to active participants securing AVS and expanding EigenCloud, rather than passive stakers.
A core component of the overhaul is a new fee and buyback mechanism designed to strengthen EIGEN's value accrual. The proposal states that 20% of fees generated from AVS rewards will be routed into a contract for token buybacks. Similarly, service fees from EigenCloud offerings, after covering operating costs, will also flow into buyback programs. This mechanism is intended to reduce the circulating supply of EIGEN as network activity expands, creating a tighter link between token economics and real-world usage.
The move is presented as a response to feedback that the original "Programmatic Incentives" model, which issued new tokens on a weekly schedule to attract stakers, was too passive and strained the network. The foundation argues the uniform model failed to distinguish between passive participation and active support for critical services.
The proposal comes against a backdrop of significant market challenges for EIGEN. The document references a report indicating the token's price dropped 91% during 2025, shedding close to $700 million in market capitalization. The foundation frames this proposal as a reset aimed at building a more sustainable, performance-driven economy that rewards genuine contribution and long-term security.
The implementation of this plan now rests on a governance vote by the EIGEN token holder community.
