Ethereum Bulls Strike Back
In a spirited defense against claims of censorship within the Ethereum network post-Merge, Justin Bons, founder and chief investment officer of Cyber Capital, stated emphatically on October 17 that “not even a single” transaction has been censored. This remark comes amid allegations that Ethereum has become overly reliant on OFAC-compliant Miner Extractable Value (MEV)-Boost relays, which some critics suggest skew the network’s neutrality.
The Censorship Debate
Amid recent reports revealing that over 51% of Ethereum blocks are compliant with U.S. sanctions, Bons noted that the essence of censorship would only emerge if producers consistently refused to build upon non-compliant blocks. He argued that, even with significant OFAC compliance, a non-compliant Ethereum transaction would still see confirmation within a brisk 30 seconds, while Bitcoin’s transaction confirmation time could stretch to an unpredictable 10 minutes. Speedy transactions could save the day—or make it even more exciting!
Censorship Resistance from Validators
Highlighting the resilience within the network, Bons explained that it would only take one validator to include an OFAC-sanctioned transaction in the canonical chain, making it possible for a small fraction of validators to prevent censorship altogether. With claims that the power to censor is held by a mysterious “Bitcoin-obsessed” minority, Bons asserted that Ethereum’s new proof-of-stake (PoS) consensus mechanism minimizes vulnerabilities in comparison to Bitcoin’s proof-of-work (PoW) model. Perhaps some Bitcoiners are feeling a bit threatened?
Developer Initiatives for Improved Censorship Resistance
In response to growing concerns, Ethereum developers are actively working on enhancements to increase censorship resistance. Developer Terence Tsao from Prysmatic Labs announced a prototype enabling block proposers to choose between local blocks and the highest fee builder blocks. This move is seen as a significant step towards bolstering the network’s resilience.
Looking Ahead: Protocol Upgrades on the Horizon
Ethereum co-founder Vitalik Buterin has pitched a Partial Block Auction solution, allowing block builders partial control over the block’s contents, thereby addressing censorship challenges. Additionally, the Flashbots organization is gearing up to roll out a decentralized, EVM-compatible block builder called Single Unifying Auctions for Value Expression (SUAVE), aimed at tackling the same issues.
Focus on Censorship Resistance
Looking ahead, Ethereum protocol upgrades in the next 6-12 months are expected to focus primarily on the following: Beacon Chain withdrawals, PBS/crLists, related censorship-resistance upgrades, and proto-danksharding (EIP-4844). As noted by community members, bolstering censorship resistance takes immediate precedence over scaling, making it a hot topic of discussion in the Ethereum ecosystem.
Context of Regulatory Challenges
Understanding the current landscape involves acknowledging the broader regulatory context. In August, the U.S. Treasury Department added over 40 cryptocurrency addresses linked to the controversial mixer Tornado Cash to its list of Specially Designated Nationals, effectively restricting U.S. residents from utilizing the mixing service. With this backdrop, the ongoing debates surrounding censorship, compliance, and Ethereum’s resilience remain crucial.
