Ethereum (ETH) moving to a Proof-of-Stake (PoS) method of consensus was one of the most historic moments in the project’s history. However, many have raised concerns about the possibility of increased censorship on the network.
Lachlan Feeney, CEO of Labrys, recently spoke with CoinTelegraph, highlighting how validators may be adding to the censorship within the Ethereum network by running Flashbots’ software.
Although reports say that 25% of all blocks validated post-merge comply with US sanctions, Feeney believed that this indicator is lagging. According to Feeney, 45% of all Ethereum blocks being validated at the moment, run MEV-boost (Maximal Extractable Value) relay flashbots compliant with US sanctions. Validators can essentially sell the privilege to produce a block to the highest bidder thanks to MEV-Boost relays, which enable block manufacturing to be outsourced.
Additionally, validators receive financial incentives for using MEV-Boost relays. This will further increase their usage. As a validator, it is only a choice of generating more yield.
On September 28, Labrys launched an MEV Watch tool that can let validators know which MEV-Boost relays adhere to OFAC (Office of Foreign Assets Control) prohibitions.
Feeney stated,
“We’re just trying to raise some awareness for those who are unaware that by running this software, they are potentially contributing to censorship of the network.”
Feeney brought up the worst-case scenario, often known as hard censorship. In this case, nodes would be compelled by law to discard any blocks containing sanctioned transactions. He also pointed out a scenario with soft censorship. In this case, it would take hours and require high fees for a transaction to go through.
Ethereum’s censorship woes
Feeney is not the first to call out Ethereum’s censorship problem. Even ETH’s co-founder Anthony Di Iorio raised similar concerns on the Kitco News channel. Iorio said that the current iteration of the network does not align with its initial goals. Nonetheless, he believes that decentralization will happen in the future.
Former FBI analyst, Coby Moran also pointed out that Ethereum is more prone to censorship post-merge. Moran says that the high costs associated with becoming a validator would lead to big firms controlling the network. According to the analyst, these firms will bend to the will of the Government.
At press time, the second largest cryptocurrency by market cap was trading at $1,331.94. This is up by 0.7% in the last 24 hours.