Skip to main content

Commissions Explained

Operators on EigenLayer earn rewards for running AVS services and take a commission (a percentage cut) before distributing the remainder to their delegators. Understanding how commissions work helps you evaluate the true cost of delegating to a particular operator.

How Commissions Work​

Commissions are measured in basis points (bips), where:

  • 10,000 bips = 100%
  • 1,000 bips = 10%
  • 100 bips = 1%

For example, an operator with a commission of 1,000 bips takes 10% of rewards and passes 90% to their delegators.

The Commission Hierarchy​

EigenLayer uses a layered commission system with three levels. More specific rates override more general ones:

Operator Set Commission (most specific)
    |
    v  falls back to
AVS Commission (mid-level)
    |
    v  falls back to
PI Commission (base level)
    |
    v  falls back to
Global Default (system fallback)

Protocol Incentives (PI) Commission​

The base rate that applies to all reward distributions unless overridden at a more specific level. This is the rate most delegators will see.

  • Operators can set a custom PI commission
  • If they don't, the global default set by the EigenLayer protocol applies

AVS Commission​

An operator can set a different commission rate for a specific AVS. This overrides the PI commission for rewards earned from that particular AVS.

Use case: An operator might negotiate a lower rate with a high-volume AVS to attract more allocation, while keeping a higher base rate for others.

Operator Set Commission​

The most granular level. An operator can set a specific rate for an individual operator set within an AVS. This overrides both the AVS and PI commissions.

Use case: Different task types within an AVS might justify different rates based on the operational cost or risk involved.

How the Fallback Works​

When EigenLayer calculates what commission to apply for a given reward:

ScenarioRate Used
Operator set split is setOperator Set rate
No operator set split, AVS split is setAVS rate
No AVS split, custom PI split is setPI rate
No custom splits at allGlobal default

Activation Delay​

Commission changes don't take effect immediately. When an operator submits a rate change, there's a delay before it becomes active. This creates two values:

  • Effective rate --- what's currently being applied
  • Scheduled rate --- a pending change that will activate at a future date

This delay exists to protect delegators. It gives you time to see the pending change and react --- whether by staying, adjusting your delegation, or moving to a different operator.

On the EigenWatch dashboard, you'll see both the current effective rate and any scheduled changes.

Commissions and Risk Scoring​

Commission behavior factors into the Economic Score through the Commission Stability component (20% of the Economic Score).

Operators who change their commission rates frequently score lower, because:

  • Frequent changes create unpredictability for delegators
  • It could indicate operational instability
  • It may suggest "bait and switch" tactics --- setting low rates initially to attract delegators, then raising them
Commission Changes (90 days)Impact on Score
0 changesNo penalty
1--2 changesMinor penalty
5+ changesSignificant penalty
10+ changesMaximum penalty

What to Look For​

When evaluating an operator's commissions:

  1. Compare rates to the network average. Rates significantly above or below the median deserve closer examination.
  2. Check for pending changes. A low current rate with a scheduled increase might change your calculus.
  3. Look at change history. Stable rates over time are generally a positive signal.
  4. Consider the full picture. A higher commission from a low-risk operator might be worth more than a low commission from a high-risk one.

See Also​