Following OFAC sanctions on Ethereum addresses related to Tornado Cash and other global entities, many were concerned with the precedent set by the bans. Vitalik Buterin, the founder of Ethereum, called for validators to be slashed if censorship were to occur at the protocol layer.
However, over the past month, there has been an increase in OFAC-compliant blocks produced on Ethereum due to using MEV relays such as Flashbots.
Editor in Cheif at Swan Bitcoin, Tomer Strolight, took to Twitter to ask, “Why is nobody talking about this?” The answer may lie in the complexity of the issue. Yet, a valid point is made that censorship through relayed blocks should not be ignored.
Why is nobody talking about this? pic.twitter.com/Nlng6kgHxr
— Tomer Strolight (@TomerStrolight) October 26, 2022
Validators use MEV boost middleware tools such as Flashbots to increase revenue. The GitHub repository for Flashbots explains the prominent use cases.
“With MEV-Boost, validators can access blocks from a marketplace of builders. Builders produce blocks containing transaction orderflow and a fee for the block proposing validator. Separating the role of proposers from block builders promotes greater competition, decentralization, and censorship-resistance for Ethereum.”
The website mevwatch.info gives insights into which blocks have been censored through MEV-boost relays. The intro to the website states,
“Some MEV-Boost relays are regulated under OFAC and will censor certain transactions. Use this tool to observe the effect it’s having on Ethereum blocks.”
Over the past 30 days, 89% of relayed blocks have enforced OFAC compliance. In the same period, 46% of all blocks produced on the Ethereum blockchain also censored transactions that included OFAC-sanctioned addresses.
However, the number of blocks enforcing OFAC sanctions is increasing daily. On October 26, 63% of all Ethereum blocks were OFAC compliant; when only relayed blocks are considered, the percentage…
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