Enormous gasoline costs have dogged ETH (Ethereum) for months, to the point where layer 2 solutions like Polygon, Arbitrum, and Optimism have seen an increase in financing and uptake. However, a brand new startup is taking a different approach, aiming to improve communication between two groups of Ethereum stakeholders, miners and clients, whose incentives are frequently mismatched.

The Ethereum Eagle project (EGL), which launched on Friday, aims to provide a signaling mechanism for miners and the community to find the “right” balance between fuel restrictions and block size.

“The motivation for EGL came from the fact that every six months on Twitter, people are moaning about the gasoline limit,” bloXroute Head of Technique and Operations Eleni Steinman explained. BloXroute, a blockchain scalability company that specializes in scaling without requiring protocol changes, is investing in the project. To a certain extent, miners in Ethereum have the ability to determine block dimensions. Because miners can adjust the block size of a future block by 0.1 percent, there are modest fluctuations in the gasoline limit over time, but the overall baseline is the gasoline limit established by almost all of the hash power. Ethereum miners, on the other hand, have the ability to adjust the fuel limit.

Generally, larger blocks result in lower gasoline costs but less income for miners, whereas smaller blocks result in higher gasoline costs but are more profitable. Handing mining pools control over block dimension has resulted in incentives between miners and customers becoming decoupled, according to bloXroute.

“Decreased gasoline limit (and higher gasoline prices) means extra short-term earnings for miners and increasing the gasoline restrict usually translates to earnings much less, with no predictability when demand will make up for it,” the venture wrote in a blog post outlining the EGL venture in additional detail, including: “The next gasoline limit may force Ethereum to require more than the common client PC to run a node, preventing common users from running their very own node. That is both an incentive and a ‘pricing’ disadvantage, and it necessitates a solution in order for Ethereum to continue its progress safely.”

The Role of EGL

The EGL token will be used to incentivize behavior among Ethereum miners. The EGL solution has three parts Staking ETH, giving value to EGL tokens, and a hard cap on EGL’s value. There is no money raised for the project so it’s “purely for the community,” says the founder. For example, if 10,000 ETH is staked and 750 million EGL is used to match, 1 ETH equals 75,000 EGL. If 20,000 ETH is staked, 1 ETH equals 37,500 EGL, implying a higher value.

The second component is The EGL token is a way for miners to vote on gas limits. Mining blocks that match the gas limit are rewarded in EGL. The EGL tokens can be traded on the Bitstamp platform. They’re also used to pay miners who mine blocks with high gas levels.

According to bloXroute co-founder and CEO Uri Klarman, the third component is that there is only a carrot, no stick. Miners are not penalized if they do not follow a suggested gas limit; rather, they are rewarded for doing so. It’s an incentive that didn’t exist before, according to Klarman. “Because the more EGLs they get, the closer they get to the desired gas limit.”

Eagle, the company behind EGL, says it’s unclear whether Eth 2 will address gas limits. The “proper” or “right” gas limit will shift away from centralized mining pools and toward more decentralized validator operators. Eagle is a tool used by miners to verify their own transactions.