Genesis opens Aug 7th at ~1pm EST! It will end when 100,000 ETH has been staked or by August 13th.
EGL is an on-chain coordination token that allows the ETH ecosystem to signal its collaborative desire (under the guidance of the core devs) and incentivizes mining pools to follow it. EGL allows holders to vote on the optimal gas limit, and rewards pools for listening and gradually adjusting the gas limit. EGL follows in the footsteps of Flashbots by tackling protocol level attributes without requiring a hard fork.
Genesis Overview
Step 1: ETH holders stake ETH
Any ETH holder can stake ETH to the EGL genesis contract to participate in the launch. The contract will collect staked ETH until the earlier of Aug. 13th or up to 100,000 ETH.
Steps 2 and 3: Match ETH with EGL deploy to a Balancer Pool
At the conclusion of the Genesis, the contract will match all the staked ETH with 750M EGLs — regardless of total ETH staked — and deploy both the ETH and EGLs to a Balancer pool. Thus, the more ETH that is staked, the larger the ETH-EGL ratio is at deployment.
Participants will receive locked Balancer LP tokens (BPT) in return for staking their ETH. Thus, they receive their staked ETH back plus the equivalent value in EGLs. BPTs unlock on a FIFO basis, thus those that participated in the Genesis earlier will have their BPTs unlocked first (see the release schedule below for more details).
Step 4: Receive Bonus EGLs to Vote
All EGL Genesis participants will receive Bonus EGLs totalling 500M EGLs to be used for voting. Since those who participated last will be locked into EGL for the longest term, those that participate later will receive exponentially more than those that participated first.
The first vote will open when the ETH-EGL Balancer pool is launched and close the following week. Every week thereafter, each additional voting epoch will close. You can refer to our EGL Economics post to learn more about voting.
Note: Each address can only participate once in the Genesis. If you’d like to participate more than once, you will have to use a different address.
Why Launch This Way?
For EGL to work it must have value at launch to kickstart the flywheel: EGL has value, so miners are incentivized to claim EGLs, EGL holders vote because EGL works, and thus EGL has value.
EGL was developed for the betterment and use of the Ethereum community and therefore its participation is open to everyone in the community. By utilizing Balancer, we are able to cleverly allow earlier participants to claim EGLs and simultaneously launch with value immediately. We incentivize long-term commitment through lockups (more below) and usage through voter rewards.
Additionally, core devs will be seeded with EGLs to guide the community by signalling their individual desired gas limit.
Read on for More Detailed Information…
Calculating Matched EGLs
We’ve created a spreadsheet for ease in calculating.
There are 750M EGLs awarded for matching during the launch. This amount is held constant regardless of the amount of ETH staked, up until 100,000 ETH is staked (the maximum amount) or until one week of Genesis, whichever comes first.
Of the total ETH staked, each ETH is matched with a portion of the 750M EGLs to form a 50/50 ETH-EGL pool. For example, if 10,000 ETH participated in the launch, the 750M EGLs would be divided among these ETH, with each ETH being matched with 75,000 EGLs. The result is a 50/50 pool where 1 ETH = 75,000 EGLs.
Similarly, if 50,000 ETH participated in the launch, the 750M EGLs would be divided among these ETH, with each ETH being matched with 15,000 EGLs. The result is a 50/50 pool of equal value where 1 ETH = 15,000 EGLs. Thus, the value of EGL is related to how much ETH is staked in the Genesis.
Both the total staked ETH and the 750M EGLs will be used to initiate the ETH-EGL pool. The output of this pool creation is BPT tokens. Participants will receive their pro-rata share of the BPT in return for staking their ETH. The BPT are initially locked and unlock on a FIFO basis, thus those that participated in the Genesis earlier will have their BPT unlocked first (see the unlocking section below for how to calculate this).
Once the BPT tokens unlock, users can claim their BPT tokens and take those tokens directly to Balancer to get the underlying ETH and EGL. Thus, participants receive their staked ETH (all things equal) back plus the equivalent value in EGLs.
Calculating Bonus EGLs for Voting
EGL exists so holders can vote on the gas limit. It is only natural then that Genesis participants, who are invested in the usability of EGL, actively contribute to its use. Thus, all Genesis participants will receive Bonus EGLs to be used for voting.
There are 500,000,000 Bonus EGLs to be awarded. The exact amount each supporter receives depends on:
- The total amount of ETH staked for matching
- The supporter’s “place in line” (i.e. serialized EGLs)
To calculate how many Bonus Voting EGLs a given support is awarded:
- Find the ETH: EGL Ratio
2. Find your first and last serialized EGL (i.e. your place “in line”)
3. Solve for your total Bonus EGLs
For example, the supporter who got matched with the last 1M EGLs would then have a last serialized EGL of 750M and a first serialized EGL of 749M and receive 2.66M Bonus Voting EGLs:
For ease, you can check the Genesis page to see how many bonus tokens you were rewarded.
To learn how to use these EGLs to vote, please refer to our Economics post.
BPT & Bonus EGL Release Schedule
When the Genesis concludes, all the staked ETH plus 750M EGLs will be sent to create a new ETH-EGL Balancer pool. The output of this pool’s creation are BPTs. Those who participated in the Balancer pool by staking ETH will receive BPTs, to be released after a lockup period ranging between as early as 10 weeks to 1 year for the last actor, using a FIFO-based schedule.
The exact amount of BPTs you will receive depends on your proportion of the entire pool, but what matters is you’ll always receive EGLs worth the same value as the ETH you staked (because its a 50–50 Balancer pool).
The basic idea of the release is as follows: when X% of the lockup period passes, the first X% of the EGLs matched are released (i.e. the serialized EGLs), and therefore the pool tokens which correlate to these EGLs are released.
To find out when your individual BPT tokens will be released:
BPTs unlock individually (gradually) but can be withdrawn in batches. When withdrawing, you must withdraw all unlocked BPTs. Once you have your BPTs, you can hold on to them or go to Balancer directly and exchange the BPTs for your share of the underlying pool.
After the Genesis has ended, you can see how many BPTs tokens you were rewarded on the Genesis page. The first and last unlock date are for your BPT tokens and the unlock date for all of your Bonus EGLs respectively. You can also claim your tokens here.
Conclusion
EGL works because miners will listen to EGL holders’ votes and that incentive to listen is driven by the fact that EGL has value. Thus, EGL’s Genesis is designed to give it value immediately and kickstart the flywheel. The Genesis is open to any ETH holder and gives away an immense amount of value to those that help in kickstarting EGL and seeds core devs with EGLs to help guide the Ethereum community.
