bloXroute Labs To Censor OFAC-Sanctioned Blocks, Stoking Neutrality Concerns in Ethereum Community
Summary:
bloXroute Labs, a leading producer of censorship-resistant blocks on Ethereum, has announced a policy change to start censoring Office of Foreign Asset Control (OFAC) sanctioned blocks across all of its Maximal Extraction Value (MEV) relays to comply with domestic regulations. The move has sparked concerns within the Ethereum community, with fears of increased restrictions impacting Ethereum's credible neutrality. Currently, around 36% of blockchain blocks are being censored due to OFAC sanctions.
Ethereum's prominent producer of censorship-resistant blocks, bloXroute Labs, has indicated a significant policy shift by declaring that it will now filter out Office of Foreign Asset Control (OFAC) blacklisted blocks on all of its Maximal Extraction Value (MEV) relay networks, in accordance with domestic regulations. The company, which to date has successfully processed more than 400,000 Ethereum blocks via its dominant MEV relays, made this disclosure public via X (the rebranded Twitter) on December 18.
As per bloXroute Labs, these "OFAC transactions" are ones which involve a wallet that has been flagged by the United States Office of Foreign Asset Control. Every relay network that falls under bloXroute Labs' control will act on this new policy, inclusive of the "bloXroute Max Profit" relay, which stands as the runner-up in the MEV-resistant block production with over 380,000 blocks under its belt since the Ethereum Merge event that took place on September 15, 2022, as per the data offered to Cointelegraph by Australian blockchain developer, Labrys.
Despite the shift in approach, bloXroute Labs claims to still hold fast to its commitment to uphold Ethereum's decentralized and permissionless essence, while also operating within the scope of legal framework. However, there has been a wave of concern from the Ethereum community who believe that tighter compliance enforcement is now infringing on Ethereum's boasts of credible neutrality.
The CEO of Labrys, Lachlan Feeney, vocalized his concern about the developing worrying precedent in the industry while speaking to Cointelegraph. He advocated his preference for application-level regulation and criticisms of protocol-level censorship, drawing parallels to internet governance. Feeney expressed further doubts about the global implications of this trend. He questioned the viability of constructing universally compliant blocks if more countries started enforcing their individual sanctions, which might then target legitimate U.S. businesses.
Presently, according to data from MEVWatch.info, 36% of blockchain blocks are being censored because they include OFAC-blacklisted transactions, tapering down from a November peak of 78%. This statistic has largely stayed within the 30-40% range since March.
MEV relays serve a key purpose for validators, providing means to optimize blockchain value via manipulating the sequence or presence of transactions within a block. The advent of MEV-Boost relays was purely to mitigate any adverse effects of such activity on regular users.
Censorship concerns within the Ethereum community had emerged subsequent to its transition to proof-of-stake on September 15, 2022. The United States Office of Foreign Asset Control's crackdown on illicitly connected wallet addresses through sanctions a month prior to this event ultimately pressured global MEV relays into choosing between legal compliance and Ethereum's assured neutrality. Feeney was unsure if bloXroute was impelled into compliance but was convinced that the move was a considered one as the company acknowledged that this would compromise the effectiveness of their relays.
Published At
12/19/2023 8:21:21 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.