CHECK HERE FOR RECORD OF TRUTH - docs.egl.vote
1. Why do we need EGL? The gas limit effectively controls the block size and thus the number of transactions Ethereum can process (i.e. tps). When demand for limited block space increases, the cost to use Ethereum (i.e. gas fees) spikes as users outbid each other to fit inside of the block. The gas limit is set by Ethereum miners, not Ethereum developers or users. EGL is a coordination token to enable the community to voice their collective desired gas limit and to reward Ethereum miners for listening to EGL holders.
2. What exactly is the gas limit and why does it matter? “Gas” reflects the computational power required to run a given transaction. More complex transactions require more gas and simpler transactions require less gas. In Ethereum there is no “block size” (e.g. 1MB in BTC), but rather a “gas limit” - a maximum amount of gas that a block can contain. Thus, the number of transactions included in a block is determined by the sum of all the “gas” that the transactions use. A higher gas limit typically means a block can include more transactions and a smaller one means fewer transactions. The “gas limit” influences the throughput of Ethereum, often measured as transactions per second (tps).
3. Who currently controls the gas limit? Miners (pools) control the gas limit, setting it with each block they produce. A miner can produce a block with a gas limit +/- .1% from the previous block, moving the needle higher or lower by increments. Sometimes mining pools privately agree to change the target gas limit, acting as a cartel, and that’s when you’ll see the gas limit experience significant swings.
4. Is there a “right” gas limit? There is no “right” gas limit – it is a moving target as Ethereum evolves and hardware becomes more efficient. However, since the gas limit does have downstream effects, there are certainly numbers that produce more desirable outcomes. EGL allows the community and miners to discover through gradual movements more optimal gas limits. Getting closer to an optimal limit requires the granular knowledge of core devs, which is why we’ve elevated their voices with EGL.
5. How does EGL interact with EIP-1559? EIP-1559 doesn’t solve “high fees.” EGL actually provides a missing piece to EIP-1559: an incentive for pools to adjust the gas limit as long as it’s safe. EIP-1559 changes how gas fees are paid to miners. Specifically, with EIP-1559 users will pay a base fee + tip where the base fee will be burned (i.e. the miner does not get it) and the tip is paid to miners when congestion is high to incentivize inclusion. As most people know, EIP-1559 doesn’t solve this whole “fees are high” thing. It does make fees more predictable and works better than the first price auction (FPA). However, when many people try to send their Txs and the capacity is limited, the most valuable Tx will outbid the less valuable (i.e. pay a higher fee). The EGL community helps to collectively signal what capacity (gas limit) they think is right. More importantly, EIP-1559 completely removes the incentive for pools to increase the gas limit, even if everyone agrees it is completely safe. Why should they? Producing larger blocks would only increase their risk of uncle blocks, but would hardly increase their revenues (since fees are burned). We realized that EGL might be the perfect bridge to smooth the transition to EIP-1559. EGL aims to reward pools substantially, potentially similarly to their expected revenues from fees, thus it might allow for pools to maintain their expected revenues while benefitting users with EIP-1559’s superior monetary policy and fee predictability.
6. What happens when ETH 2.0 comes? “The Merge” is the first step in transitioning ETH to PoS, confirming ETH blocks in the ETH2 consensus. This is huge for ETH, but does not mitigate the gas limit issue. Validators will now increase/decrease the gas limit, just like miners are currently doing. Furthermore, the burden to figure out the “right” gas limit will now shift from the centralized mining pools to (hopefully) more decentralized validator operators, increasing the need for a coordination tool such as EGL.
7. What are mining pools and who comprises them? Mining pools are made up of miners who run the hardware to win the block reward, and an administrator who organizes and runs the pool. One’s probability of winning is directly related to how much computational power they have. It’s pretty intensive right now to win, so a single miner might win once every 2-3 years! Winning is big but you have bills to pay in the meantime. Thus, miners mine in groups - called pools - to smooth out their earnings. Pools are run by mining pool admins who take each transaction and build the block. About 4 mining pools control 70% of the hash. Mining pools collect about 1% on the block reward + fees and pass on the rest to underlying miners who contribute hash power.
8. Who are EGL Signals? “EGL Signals” was created to help signal and guide the community on the desired gas limit. This group is made up of client teams (those who make the software nodes run on), those who’ve submitted updates (EIPs) that have been approved and implemented, as well as a handful of researchers and contributors. Those in this group have informed insights about what may be the right gas limit. We encourage voters to let how the Signals vote inform their own voting decisions.
9. What if I don’t know what to vote? That’s okay. We’ve elevated the voices of experienced core devs to help clue you in to what the optimal desired gas level should be. Our leaderboard also includes investors and dApps. If you’re not sure what to vote, use these experts as a guidepost. Gradually, through research and experience, you’ll come to develop your own insights and in the future you’ll be able to delegate your vote to a trusted source.
10. What happens if the desired gas limit is an “unsafe” number? Don’t worry, EGL is built to adjust the gas limit gradually. While you can vote for a gas limit of +/- 4 million from the current gas limit, each week the new desired gas limit can move at most +/- 1 million from the current limit gas limit. This gradual change allows the ecosystem to safely discover what the “right” number is. Additionally, miners can only increase / decrease a block by 0.1% from the prior block, further allowing the ecosystem to discover if the desired gas limit is safe.
11. Why vote more than 1 million? Voting more than 1 million above or below the current gas limit allows you to not have to revote each week if your desired gas limit is more than 1M from the current gas. Let’s say you wanted the gas limit to be 19 million and the current gas limit was 15 million. You’d have to go in and vote every week +1 million for at least 4 weeks to get to 19 million (assuming the vote passed at +1M each week). By simply voting 19 million, you save time and gas fees.
12. Why would miners listen to EGL voters and what if they stop listening? EGL incentivizes miners to listen to voters by rewarding them in EGLs for doing so. Users give EGLs value by voting regularly. Miners are only rewarded with EGLs if they follow the vote. Thus, if miners stop listening to EGL and forgo such a reward, this likely signals that the new desired gas limit was at an unsafe level. In such an event, EGL holders ought to vote back towards the last level miners followed. This will allows miners to claim the EGL reward and allow the EGL community to hold the gas limit at such a level (remember, if no vote passes then the system automatically lowers the desired gas limit to 95% of the current gas limit).
13. Are gas limit and block size directly related? Proportionally related? Block size and gas requirement tend to be directionally related, but this is not a one to one relationship. Two different block sizes could have the same gas requirement. This is because gas refers to the computational complexity of the code and size refers to the amount of bytes of data a transaction contains.
14. If I’m one of the first to participate in the Genesis and thus get very few Bonus Voting EGLs, but I’m forced to vote with these EGLs to withdraw them, couldn’t I end up paying a lot more than I earn? As an early voter you can lock your EGLs for 8 weeks to maximize the influence they have on the desired gas limit (and consequently the share you get of the voter rewards). Thus we still encourage you to vote early since the rewards are highest earlier in the voting period. Additionally, you can buy more EGLs and vote with those, but the purchased EGLs will be locked for the same amount of time (see question above) as the bonus EGLs.
15. Is it safe to stake my ETH with EGL? EGL is merely a facilitation tool. Your ETH will ultimately be returned in the form of BPTs. Additionally EGL has been audited by Halborn to ensure thorough regulatory compliance.