The Israelites would demonstrate that they feared God more than the Egyptians. Through such obedience Israel would merit the deliverance of Passover night. The blood, however, has a much greater significance than being only the object of obedience. It involves substitution. In place of the life of the firstborn which God was requiring of each household in Egypt, he would accept the life of the lamb.
Substitution is a dominant theme in some of the most powerful scenes of Torah.
But God will permit a substitute to be offered in place of the firstborn of Israel. The ordinance of the firstborn which immediately follows the account of the first Passover further clarifies this. The firstborn belongs to the Lord because the firstborn represents the whole, and God is the source of all life. Israel as firstborn of the nations signifies that all the nations belong to the Lord. The Lord goes on to instruct Israel that it is required to redeem or buy back the firstborn because it belongs to God.