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Governance & Staking

Who Are Gas Markets For?

Gas affects everyone - unlike a simple protocol who's users are ring-fenced to the protocol itself, ETHGas affects everyone whether they choose to interact with it or not. From:

The Validators who secure the network and earn yields, to
The Users and traders who pay for transactions, to
The Protocols that require it for core functionality, to
The Developers that create these dAPPs, to
The Wallets that enable Users to interface with dApps,
And many more...

As the fabric that powers blockchains, it's important that Gas, and ETHGas by extension create a system that enables direct and indirect users to participate in both the product roadmap and economic design. At the core of blockchains, Validators want higher yields, and Users want lower fees. Protocols, Developers, and Wallets, altogether would like to remove Gas from the user experience (e.g. account abstraction).

While some of these interests are algined, some aren't - how do we pay validators more with traders paying less? It's nuanced.

An array of products addresses this to some degree on the micro level - while we still have Regular Gas, we now have High Octane (preconfs, state guarnatees), as well as Bulk Purchases (blocks). Such product segmentation is driven from the demand-side of the market (i.e. users of gas), vs the supply side (i.e. Validators) with products split by compute, storage, or other.

On the macro level, our token is designed to embody these more nuanced, multifaceted or multidimensional relationships aligning the future existence of both ETHGas with that of its users.

The ETHGas token $GASS is largely a Governance token that enables the community to participate in ETHGas' future product roadmap and tailor the economic incentives to each party accordingly. For more on the product roadmap, see the Vision section. For more on how tokens are used to align incentives, read on.

Core Users & Incentives

In the following sections, we articulate our mechanism for incentive alignment. For current Fees, please check out Fees section accordingly.

Let's assume the following fee schedule:

Primary Market:
- Makers: 10.00%
- Takers: 1.00%
Secondary Market:
- Makers: 0.50%
- Takers: 1.00%

Users

There are four primary users - from the Stakeholders listed earlier, we refine it down to:

Buyers:

Pay Fees for Commitments or Constraints, i.e. from buying/selling gas
Their primary incentive is to either pay less fees, or get better order execution

Sellers / Validators:

Earn Rewards from Selling Gas
Their primary incentive is to increase APYs, without increasing the work involved
Their secondary incentives are varied and differ from one validator to the next

Additionally, however, we also have:

Ethereum Network:

The Network itself, that provides the incentive interface for Buyers to communicate with Validators
Primary incentive is ongoing existence with desire to grow usage, increase accessibility, and decentralization

ETHGas

The protocol itself, that provides the incentive interface for Buyers to communicate with Validators
Primary incentive is ongoing existence, and fee revenue for administering the incentive aalignment mechanics

Staking Dynamics

ETHGas is designed to provide Buyers with more choices with order execution, and Validators with an off-the-shelf suite of products that will provide them with higher yields. Staking enables participants to voice or influence the degree to which they would like the protocol to prioritize certain users, be it paying less transaction fees, earning higher APYs, or earning a larger share of protocol fees. Staking also rewards $GASS tokens for those participating in the ETHGas ecosystem.

Direct Users

Direct Users, Reduced Transaction Fees, and Increased APYs

Direct ysers are those that interface with the ETHGas protocol namely the Gas Buyers (i.e. Traders) , and the Gas Sellers (i.e. Validators). In these cases, we look at staking as a mechanism to either reduce fees or increase APYs.

Gas Buyers (Traders)

Gas Buyers invariably want lower transaction fees. Depending on what they stake, and how long they stake, they can lower these fees significantly. They can:

Stake ETH, and pay less transaction fees
Stake $GASS, and pay less transaction fees
Stake longer, and pay less transaction fees

Gas Sellers (Validators)

Validators want higher APYs. The Validator landscape is highly competitive having an extreme sensitivity to APYs. If a Node has regular outages or otherwise sees a 10bps drop in yield, TVLs will fall considerably. Through Staking with ETHGas, Validators are now able to enhance their APYs vis-a-vis other Validators. They can:

Stake ETH, pess transaction fees, earn higher APYs
Stake $GASS, pay less transaction fees, earn higher APYs
Stake longer, pay less transaction fees, earn higher APYs
Stake a relatively higher proportion of ETH vs others, pay less transaction fees, earn higher APYs

See this spreadsheet for example calculations

Indirect Users

Indirect Users and Staking Rewards

While ETHGas affects all users on Ethereum, not all users directly interact with the protocol. For those indirect users, they may earn $GASS governance tokens and separately participate in ETHGas' share of Staking Fees where 30% of transaction revenues are reserved for the ETHGas Treasury's continued operations and up to the remaining 70% being distributed to stakers accordingly.

There are two multipliers for Indirect Users: Base Multiplier and Time Multiplier

The Base Multiplier:

ERC20 Token Stakers earn 1x share of rewards
ETH and ETH Variant Stakers earn a 2x share of rewards
$GASS Stakers earn a 10x share of rewards

The Time Multiplier:

Rewards are a function of the staking-time, that is, the longer one has staked, the higher rewards one is entitled to. This is calculated as a weighted-average stakign time since the day of launch.