Exploring the Issue of Censorship on the Ethereum Network: A Conversation with Laybrys: SlateCast #43

In this episode of the SlateCast, CryptoSlate’s Akiba spoke to Lachlan from Laybrys, the company behind the website mevwatch.info to discuss the issue of censorship on the Ethereum network, specifically in relation to Validators outsourcing their block production to MV boost relays, which have the ability to censor transactions. This has led to a situation where approximately 90% of transactions on the Ethereum network are being censored.

Akiba explains that the censorship is being carried out due to concerns over compliance with OFAC (Office of Foreign Assets Control) sanctions. Validators are using MV boost relays to censor transactions coming from certain countries or involving certain individuals or organizations in order to avoid being in violation of these sanctions and facing fines or other penalties.

The podcast then delves further into the motivations behind the censorship and the impact it is having on the Ethereum network. Lachlan points out that Validators are essentially caught in a catch-22, as they are able to make more money by outsourcing block production to MV boost relays, but if they stop doing so, they risk facing sanctions. They also discuss the fact that Vitalik Buterin, the creator of Ethereum, has been relatively quiet on the issue and the role of the community in addressing it.

The conversation then evolves to discuss the potential consequences of the censorship, including the possibility of more restrictive regulations being put in place and the potential for Ethereum to be completely censored. They also consider the potential for short-term fixes, such as Encrypted Mempools, to be implemented in the interim.

There are ethical implications of the censorship, including the fact that it is effectively giving OFAC control over what happens on the Ethereum network and the potential for legitimate use cases, such as those involving Tornado Cash, to be impacted. The speakers also discuss the role of the community in addressing the issue and…