Ethereum Hits Sad Milestone with Half its Blocks Censored
Youtube channel The Defiant reports that according to MEV Watch, more than half the Ethereum blocks produced Tuesday were built by “OFAC compliant” MEV-boost relays. These are relays that are bending the knee and censoring transactions related to Ethereum coin mixer Tornado Cash, which was sanctioned in August by Treasury’s Office of Foreign Asset Control.
This sad milestone is a first for Ethereum since the “Merge.” Basically, Flashbots and other MEV-Boost relays are building an increasing amount of Ethereum blocks. Before Sep. 15, 90% of blocks produced were done without MEV-Boost relays, and the latest data show it’s down to 43%.
What does this mean for censorship on Ethereum? Quite a lot. MEV-Boost relays – particularly Flashbots – state that they won’t include any transactions related to the blacklisting of Tornado Cash. Flashbots relays are responsible for almost 80% of all MEV-Boost relay block production, according to The Defiant.
Flashbots developed its MEV-Boost software for the post-merge Ethereum landscape, promising that Proof-of-Stake validators running the software would enjoy greater rewards by participating in MEV. On Sept. 20, Hasu, Flashbots’ strategy lead, shared data indicating that validators running MEV-Boost are earning 135% more than validators not using the software.
With such juicy yields on offer, it is unsurprising that 58% of validators are using MEV-Boost despite the software complying with the Treasury Department’s sanctions.
It’s a quick video that is definitely worth the time. The story is here, and it shows that Ethereum is censorship vulnerable, especially given the opportunistic nature of Ethereum validators placing profit over censorship resistance.
Even under proof-of-stake, Ethereum is still only producing a single block every 12 seconds. When a validator is selected to produce a block and that validator enforces censorship of whatever kind, then it simply produces a block that doesn't contain any transactions to/from censored wallets.
You can still probably get your transaction through, eventually, by making sure you pay sufficient fees that you are picked up in the less common non-censored blocks. But it does mean that you'll either be slower, more expensive, or both.
In Silvermint, every node produces blocks and no node is permitted to refuse a valid block. The per-node bandwidth is so high that even if 50% of the network was censoring your wallet, you would experience little to no slow-down in finalization time and no change in transaction cost.