The compliance rate of Ethereum blocks with orders from the U.S. Office of Foreign Asset Control (OFAC) has reached a new low of 47%, the lowest since October 2021, following a peak of 79% on November 21st, 2022, according to a February 14th report. This development marks a significant milestone in the fight against censorship.
Ethereum Community Fighting Censorship
Blocks that comply with OFAC rules exclude transactions that involve parties under the U.S. Treasury Department’s OFAC sanctions. The recent decrease in compliant blocks could be considered a victory for those who are against censorship in the Ethereum ecosystem.
MEV-boost relays, including the BloXroute Max Profit relay, Ultrasound Money relay, and Agnostic Boost relay, are being cited as a possible cause for the drop in OFAC-compliant blocks.
These relays do not censor transactions in accordance with OFAC requirements and act as trusted mediators between block producers and block builders. It enables Ethereum validators to outsource their block production to other block builders.
Lachlan Feeney, Labrys CEO and creator of MEV Watch praised the Ethereum community for their handling of the censorship problem that arose after the Merge.
Feeney emphasized the significance of the recent decrease in censorship-compliant blocks, which was accomplished without implementing a UASF. He also mentioned that some ETH community members suggested a soft fork before the Merge to address censorship.
With still more work to be done, Feeney said :
I am incredibly proud of the Ethereum community for the progress we have made with this issue. When we released the MevWatch tool drawing attention to a flaw within Ethereum, the community did not stick its head in the sand but instead rose to the occasion and made significant progress addressing the issue.
On August 8th, 2022, OFAC sanctioned ETH and USDC wallet addresses using Tornado Cash. The percentage of OFAC-compliant blocks on Ethereum has been steadily decreasing since January 29th, 2023, but with minor spikes.
After the first 24 hours of Ethereum’s new proof-of-stake consensus mechanism on September 16th, 2022, only 9% of blocks were OFAC-censored, but it sharply increased over the next two months, peaking in November last year. Since then, the percentage of OFAC-compliant blocks had remained in the 68-75% range until January 29th, 2023, when it was 66%.
Nevertheless, the decrease in OFAC-compliant blocks could be seen as a positive development for those who oppose censorship within the Ethereum ecosystem. However, further work is still required to ensure that the network remains open and accessible to all.