After Ethereum’s (ETH) move to a PoS (Proof-of-Stake) model, many were concerned about transaction censorships due to validators complying with OFAC (Office of Foreign Assets Control) sanctions. Recent reports claimed that since the Merge, Ethereum has grown overly dependent on OFAC-compliant MEV-Boost Relays (Miner Extractable Value).
However, Cyber Capital founder and CIO (Chief Information Officer), Justin Bons, has come out in defense of the second-largest crypto project by market cap.
Bons took to Twitter and shared his thoughts on the ongoing debate regarding Ethereum censorships. According to Bons, there has never been any censorship on the ETH network due to OFAC sanctions. Instead, he says that Bitcoin (BTC) is more vulnerable to such censorship.
Additionally, he says that censorship only exists if producers refuse to build on non-OFAC-complying blocks. As of last week, 51% of Ethereum blocks were compliant with OFAC. He further stated that even with 50% OFAC compliance, a sanctioned transaction would be confirmed in 30 seconds. Whereas on the Bitcoin (BTC) network, it would take 10 minutes, he said.
Additionally, Bons cited the Proposer Builder Separation (PBS) proposal which aims to address the issue of validators choosing which transactions go first.
Is Ethereum really censorship-proof?
While it may be true that as of yet, no OFAC-sanctioned transaction has been censored. However, if all validators were OFAC-compliant, the scenario might be different. In that case, validators would have to omit flagged transactions.
“OFAC compliance only became concentrated over ETH because Flashbots ended up dominating this proposer/relayer role.”
Bons also points to the recent announcement of the decentralization of relayers of Flashbots as a solution.
However, these changes have not been implemented as of yet. It may take some time for all these changes to be enacted. Although transactions would go through, it should be taken into account that unless the aforementioned proposals are approved before all validators become OFAC-compliant, there would definitely be room for censorship.
Even Anthony Di Iorio, an Ethereum co-founder, raised concerns about centralization.
Additionally, a partial block auction method, in which a block builder only has the authority to choose parts of the contents of the block, was recently put out by Vitalik Buterin.
Furthermore, Bons claims that most of the claims about Ethereum’s censorship concerns come from “Bitcoiners.” Well, there may be a big chunk of Bitcoin fans hating on Ethereum, but they are not the only ones with such concerns. In fact, a former FBI analyst has come forward saying that ETH is at a higher risk of censorship. Moreover, even Chainalysis reported that ETH has more censorship worries since many of the staked ETH lies in the hands of a few players.
Regardless, there are proposals in place to counter said centralization and censorship. It is only a question of when these changes can be implemented, if at all.