Sunsetting the EGL Project

After 2 years building a governance token for ETH, we decided to sunset the EGL Project. Here’s why

After almost 2 years designing, modeling, implementing, deploying, testing, and managing the Ethereum Gas Limit (EGL) Project , the team decided it is in the ETH and EGL community’s best interest to sunset the EGL project and to return all the staked ETH to the Genesis participants.

The EGL project was meant to empower the ETH community, allowing it to coordinate, signal, and incentivize the mining pools (and post-merge validators) to follow the community’s vote, following the guide of ETH core devs.

Given the concerns raised by multiple core devs, that many members of the community feel strongly that the use of a token to govern ETH is inherently flawed , and that EGL was created to be a useful tool for the community, to be we decided to sunset the EGL project.

However, we still believe EGL solves a real problem.

On the All Core Devs (ACD) call following EGL’s first vote, which adjusted ETH’s gas limit from 30M to 30.1M, majority of core devs wished to make EGL obsolete by introducing the gas limit in-protocol, but could not reach an agreement on the right value.

This speaks volumes about the need for a better coordination tool to allow core devs and the ETH community as a whole to reach an actionable conclusion, even when there are numerous conflicting opinions.

Below we outline:

• EGL’s Goal
• Criticism of EGL
• Sharing Lessons
• Sunsetting Process

EGL’s Goal

When we came up with the EGL idea, it was to solve a major problem that nobody seems to be aware of:

There is no consensus among the core devs, nor the broader ETH community, how or when the Ethereum Gas Limit (Ethereum’s “block size”) should be adjusted.

The gas limit is the single-most important parameter in the ETH protocol, but in reality it is periodically increased by the top 3 mining pools when they decides “it’s time”, often against fierce objection from core devs. While the mining pools are NOT malicious — they generally aim to do what’s right — they lack guidance from both core devs and the ETH community, and their incentives are misaligned with the community.

Unfortunately, moving to PoS doesn’t resolve the matter, an in some sense it makes the situation worse. If you’re an ETH enthusiast and runs a validator (awesome!) all of a sudden it’s your job to decide the proper gas limit. But what do you do?
Asking the core devs isn’t as trivial as it sounds — as different core devs have different opinions on the matter, with very reasonable arguments why the gas limit should be decreased, increased, or remain as-is.

In fact, most core devs will tell you they don’t feel adequate to decide the right gas limit - deciding it is NOT trivial.

So validators will have to get VERY technical, discuss with many core devs to understand who-thinks-what, and choose whose advice to accept.

The idea behind EGL was to allow all core devs to vote and showcase their votes in a “leaderboard” to signal and provide guidance, and for everyone in the ETH ecosystem to take these signals as input, vote, and weight-average the result. In such a scenario, anyone could quickly check the different opinions among core devs you trust and value, and reach a fact-based decision.

Criticism of EGL

We actually published an entire post capturing it, but TL;DR:

• It can be abused to increase the gas limit to dangerous levels
• It skews incentives since it uses a token
• This is an elaborate ploy to increase the gas limit
• It’s a scam, a money-grab

We think none of it is true as we outline in the post.
But all of it doesn’t matter - EGL was designed to be a coordination tool empowering the ETH ecosystem, and if the community doesn’t want it, we have no intention to try and force EGL upon it.

Sharing Lessons

With EGL out of the picture, the problem of collectively deciding the gas limit (as outlined above) remains unresolved. We spent quite a lot of time exploring this design space for EGL v.2, and we’ll be glad to share with the community the lessons we learned on:

• Signaling-only vs. incentivizing miners/validators
• Native ETH vs. token
• Cutting down costs
• Avoid interfering with pool/validator opsec

One critical aspect, which we urge the community to consider, is the interaction between PBS (Proposer/Builder Separation) and the gas limit.

• Should proposers set it? Will their incentive to reduce Tx cost drive them to increase the gas limit to undesired levels?
• Should builders set it? What makes builders suited for the job, and will proposers attempt to affect the builders’ decisions?

We believe PBS makes a lot of sense and is a net-positive, but suggest gas limit is not overlooked.

Sunsetting Process

We will share in the EGL discord the exact steps of the sunsetting process, but in the coming days and weeks:

• Any and all EGL holders are encouraged to sell them, using the liquidity pool created during Genesis.
• The EGL team will work with the community to extract the liquidity, and ensure all Genesis participants receive the ETH they staked back

So Long, and Thanks for All the fish.