What Is Ethereum Eagle (EGL)?
Tech Deep Dives

What Is Ethereum Eagle (EGL)?

11 months ago

CoinMarketCap takes a deep dive into Ethereum Eagle (EGL), a project that offers a signaling technique to miners and the Ethereum ecosystem to find the correct balance between gas limits and block size to maximize value.

What Is Ethereum Eagle (EGL)?

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The Ethereum Eagle (EGL) project is created to address the community-miner incentive imbalance and lack of clarity in a way that optimizes value for all Ethereum stakeholders. EGL follows a similar pattern of Flashbots and handles protocol-level characteristics without necessitating a hard fork.
EGL rewards miners for adhering to the communities and usage patterns and gives a coordination token that allows holders to participate in the voting process of setting up a preferred Ethereum gas limit.  

The Main Problem That Ethereum Eagle (EGL) Solves

When there are more transactions than the actual storage space present in a block, fees rise as users compete in an attempt to get their transactions into the block. Various chains have used different methods to control the amount of block space available.
A great example to give here would be Bitcoin where the protocol developers were given authority over the block size in BTC. It makes a little sense, however, those who are responsible for developing the clients that operate the system should have some technological decision-making authority. Unfortunately, this couldn't happen in the case of the largest coin by market capitalization, as internal developer feuds occurred and a chain split that resulted from the philosophical disputes over what the appropriate block size should be in BTC. In the end, small block supporters stayed with BTC, while large block proponents departed to establish BCH.
It seemed that Ethereum tried to learn from Bitcoin's internal rift by going in a different direction. ETH granted miners control over block size. In this network, the miner of each block has been given the ability to alter the size of forthcoming blocks by 0.1%. As an outcome, the gas limit stays a little unstable in the short term, but it tends to hover around the gas limit that the bulk of hash power is aiming for.

Also, the majority of miners will have to aim for a specific gas limit over time in order to attain a new block size level. This solution worked perfectly for some time before turning into a huge problem that involved the claim that miners should act in their own financial interests and that their investment in mining equipment demonstrates a long-term commitment to the value of ETH.

Rather, miners work together to raise the gas limit whenever they choose. Over a certain period of time, miners do not vote independently on the ideal block size for Ethereum, rather they act like a mafia, deciding on the optimal size in secret and then voting it into reality which can be witnessed through a historical gas limit chart.

Solution That EGL Brings To The Table

EGL expands on Ethereum's experiment of shifting some variables from core developers to miners by returning part of that authority to not just core developers, but the whole community.

The core solution can be termed as EGLs being bootstrapped by utilizing the Balancer to spin the flywheel and discovering pools that may be rewarded with EGLs to take the ecosystem's preferences into account.

Miners are rewarded for paying attention to the community and usage patterns and EGL holders decide their preferred Ethereum block gas limit. Furthermore, EGL provides a financial incentive for the community to do analysis, vote, and finally determine what the cost-effective gas limit is, and it compensates mining pools for listening and accepting the financial risk of doing so.

EGL Serves As The Perfect Bridge For EIP-1559

In a hypothetical scenario, if everyone believes that increasing the gas limit is absolutely safe, EIP-1559 eliminates the motivation for pools to do so. Producing larger blocks would simply raise their danger of uncle blocks, but not their profits, because fees are burnt, and this news isn't good for miners. In fact, it removes the incentive as a smaller block implies greater congestion, and miners pay larger “tips” when there is overcrowding.

EGL can be of immense help in this scenario. It can act as a transitory bridge to EIP-1559. EGL might allow pools to keep their expected income while benefiting users through improved monetary policy and price certainty due to its intention of rewarding pools significantly, perhaps in line with their projected fees. This is conceivable because the value created by EGL should be sufficient to compensate pools, removing the debate over whether the money generated by fees should be used to compensate pools or burnt.

Ethereum Eagle (EGL) Genesis - A Unique Feature

Investors can lock ETH in the EGL Genesis contract to help the network get established. ETH donations are paired with EGLs and deployed to an ETH-EGL pool using the Balancer protocol during the Genesis event.

Through genesis, EGL holders can vote on their desired gas constraints to earn extra EGLs based on their initial gas limit vote upon registration. Balancer pool tokens and EGLs are released between 10 and 52 weeks from Genesis, depending on the period of involvement, and voting yields additional EGLs. EGLs for bonus voting are not available until all Genesis tokens have been issued.

Genesis Supporters get 1.250 billion EGLs as part of the EGL smart contract, which is equivalent to the number of EGLs provided to mining pools as an incentive for their continuous service.

Ethereum Eagle (EGL) Tokenomics

The total pool of EGL tokens is 4 billion. The Ethereum community gets 2 billion EGLs while miners get 1.25 billion EGLs as a reward for their efforts. 

A total of 750 million EGLs are granted to EGL investors and early investors of the EGL initiative. Also, a percentage of the tokens from the Creators pool is reserved for a small group of investors - specifically the ones who supplied the initial cash required to support the early development phases of EGL.

Ethereum Eagle (EGL) Price

Ethereum Eagle (EGL) is now trading at $0.0478, as of August 26, 2021.

When Will Ethereum Eagle (EGL) Hit 1 Cent? 

As of August 17, 2021, Ethereum Eagle (EGL) is trading at $0.00478. The popularity of Ethereum is on the rise, as the coin continues to break its previous price records every day. With ETH ranking at #2 on the cryptocurrency market (BTC at #1), EGL holders can expect a steady rise in their holdings in the near future. Whether Ethereum Eagle (EGL) will hit 1 cent or not will be determined by two things: 

  • How well does Ethereum perform in the long run? 
  • How many competitors offer the same or better proposal on ETH gas limits similar to EGL? 

Both these factors plus the market volatility of cryptocurrencies make it hard to guess the exact timeline when EGL will hit 1 cent.

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