Eigen proposes ELIP-12 to create an Incentives Committee, linking EIGEN emissions to fee-generating AVSs and EigenCloud usage.
Author: Tanishq Bodh
December 19, 2025 – EigenLayer has introduced ELIP-12, a governance proposal aimed at restructuring how EIGEN token emissions are distributed across its ecosystem. The proposal establishes a dedicated incentives committee tasked with directing rewards toward productive economic activity, as the protocol scales its restaking and EigenCloud infrastructure.
Announced by the Eigen Foundation and EigenCloud, ELIP-12 is now live for community discussion and marks a shift away from fully programmatic incentives toward a more targeted emissions model. The move comes as EigenLayer expands the number of Actively Validated Services (AVSs) relying on shared security.
While EIGEN price action remained muted immediately following the announcement, market participants focused on the proposal’s long-term implications. Analysts highlighted the introduction of buyback mechanisms, including a 20% fee on AVS rewards for subsidized stake and full fee recycling from EigenCloud services. These measures could reduce net emissions over time, especially as fee-generating services scale.
Community discussion on governance forums and X reflected cautious optimism, with contributors noting that incentive efficiency has become increasingly important as restaking participation grows and capital allocation becomes more competitive.
Despite broad support, ELIP-12 has raised governance-related concerns. The Incentives Committee will initially be staffed by representatives from Eigen Foundation and Eigen Labs, operating under Protocol Council oversight. Some community members cautioned that this introduces temporary centralization , particularly during early implementation.
Others emphasized execution risk, noting that incentive allocation must remain transparent and data-driven to avoid favoritism or misaligned capital flows. Governance safeguards and phased rollout will be closely watched as the proposal moves toward ratification.
At its core, ELIP-12 ties Eigen emissions directly to fee-generating. Only AVSs that charge real fees will qualify for incentives, shifting rewards toward active security providers rather than idle stake. Additionally, 100% of net fees from EigenCloud’s AI inference, compute, and data availability services will be used for EIGEN buybacks.
The committee will prioritize emissions to bootstrap slashable AVSs, de-risk early EigenCloud adoption, and support decentralized AI and data infrastructure. This creates a feedback loop linking usage, security, and token value.
If approved, ELIP-12 would represent a maturation step for EigenLayer’s tokenomics, aligning restaking rewards with sustainable network demand rather than inflation-driven growth.
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