Ethereum Becomes Less OFAC-Compliant And That’s A Good Thing

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The Ethereum blockchain has undergone a significant shift in its approach to censorship over the past six months. 

Previously, the U.S. government’s sanctions on Tornado Cash transactions led to most blocks added to the Ethereum blockchain being OFAC-compliant. However, recent data shows that validators are now reversing their censorship practices. 

Over two-thirds of blocks added to the Ethereum blockchain in the last 24 hours are non-OFAC compliant.

The shift in censorship practices can be attributed to introducing new, non-censoring relays such as Agnostic and ultra sound.

These relays, which offer a non-censoring version of MEV-Boost, have risen in popularity and are now delivering roughly 20% of blocks over the past 14 days, compared to Flashbots’ 26%.

MEV-Boost, a middleware software that helps validators earn MEV, has been widely used by validators since the Ethereum Merge in September. While Flashbots innovated MEV-Boost, it has not been integrated into the Ethereum protocol level. 

However, the software has been instrumental in distributing MEV among validators and has been used by 85% of validators.

Following the sanctions on Tornado Cash, there was a debate over whether validators should include those transactions. 

Flashbots, the most popular MEV-Boost relay at the time, immediately programmed their relay to censor these transactions by default. 

However, in response to community backlash, Flashbots open-sourced its code for MEV-Boost, allowing others to develop their non-censoring relays.

The shift towards non-censoring relays is seen as a comeback for Ethereum’s anti-censorship ethos. 

As the Ethereum community continues to push for a reversal of censorship practices, introducing new relays has paid off in delivering a more open and decentralized blockchain.

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