These six verses make up the most important paragraph in Exodus. Back at the burning bush (3:12), the Lord told Moses that when he and the people would arrive again at Mount Sinai, he would know for certain that God’s plan was being accomplished. So, finally, they have arrived at Mount Sinai, and the Lord reveals to Moses the true purpose of the exodus. The Lord tells the Israelites that they have seen with their own eyes what He did to the Egyptians and that the journey through the wilderness has had a purpose. The Lord didn’t bring them into the desert to kill them like they complained, but rather He brought them “on eagles’ wings” through the desert to this mountain so He could speak to them.
Then, the Lord sets out the terms of the covenant He intends to make with them. A contract is a short-term agreement, but a covenant is a lifelong, binding promise. In the ancient Middle East, covenants were made between nations and between kings and subjects. The terms of the covenant: the people need to listen and obey, and they will be God’s special nation among all the nations of the earth. The whole earth belongs to the Lord, yes; but Israel is especially chosen to represent the Lord to the nations. In fact, Israel is meant to be a “kingdom of priests.” Priests mediate between God and man and they both represent people to God and God to people. That’s Israel’s special job—to represent the Lord.
Just as at the burning bush, here, Moses goes up the mountain to receive a commission from the Lord, but this time the commission is for all the people. Previously, they served Pharaoh, but now they are to serve the Lord. Just as Moses received his identity at the burning bush, so here the people receive their identity as the Lord’s special people.
The Apostle Peter drew upon this story when he wrote 1 Peter in the New Testament:
9 But you are a chosen race, a royal priesthood, a holy nation, a people for his own possession, that you may proclaim the excellencies of him who called you out of darkness into his marvelous light. 10 Once you were not a people, but now you are God's people; once you had not received mercy, but now you have received mercy. 11 Beloved, I urge you as sojourners and exiles to abstain from the passions of the flesh, which wage war against your soul. 12 Keep your conduct among the Gentiles honorable, so that when they speak against you as evildoers, they may see your good deeds and glorify God on the day of visitation. [1 Peter 2:9-12]
The purpose of God’s people is to represent the Lord to the nations, so that the nations can come to know Him and trust Him and receive life in His name. The Ten Commandments and the subsequent laws are specific ways that God’s people are to live so that they can draw the nations to the Lord.
P.S. Note in verse 1 that the entire calendar has reset with the Exodus. From now on, Israel will mark time from the day of their liberation.