More than 51% of blocks on the Ethereum network are checked for compliance with OFAC rules

Labrys noted that even soft censorship will lead to higher fees and longer transaction processing times

15.10.2022 - 06:45

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What’s new? One month after the Ethereum network switched to the Proof-of-Stake (PoS) consensus algorithm, 51% of blocks were censored. They met the US Office of Foreign Assets Control’s (OFAC) standards, and MEV-Boost relays expanded their market share as miners. The crypto community is concerned that the figures point to further censorship of the project and complete centralization due to regulation by supervisors.

We reached another sad milestone in censorship: 51%This means if the censoring validators would now stop attesting to non-censoring blocks they would eventually form the canonical, 100% censoring chain. pic.twitter.com/JrYUjowLpt— Martin Köppelmann 🇺🇦 (@koeppelmann) October 14, 2022

What do the experts say? Lachlan Feeney, the CEO of blockchain development agency Labrys, noted that if there is hard censorship, “no matter how long you waited, no matter how much you paid, you would never get to a point where those sanctioned transactions would get included in the blockchain.” He explained that “nodes would be forced by regulation to basically discard any blocks with any of these transactions in them.”

Feeney also noted that soft with mild censorship, when sanctioned transactions are validated, it will lead to long waits and high fees, which will negatively impact users. According to Labrys, there are seven major relays, including Flashbots, BloXroute Max Profit, BloXroute Ethical, BloXroute Regulated, BlockNative, Manifold, and Eden. Only 3 of them are not censored as required by OFAC.

Feeney had previously noted that Ethereum could face censorship as a result of the transition to PoS. In his opinion, 45% of validators using Flashbots’ software are forced to comply with US sanctions.

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