The percentage of Ethereum validators who meet OFAC (United States Office of Foreign Assets Control) standards dropped from 79% to 29% in six months. In November 2022, 4 blocks out of 5 could be censored if they did not comply with US government laws.
The statistics provided by the website mevwatch.info show that Ethereum’s health in terms of censorship resistance has improved. In recent months, the use of programs that are not required to exempt certain transactions from locks has become widespread.
For example, they are not allowed to validate money transactions that have gone through the Tornado Cash transaction mixer. This Ethereum privacy solution was sanctioned by OFAC in 2022 for “allegedly” enabling illegal activity. Even its developer was arrested.
As explained in CriptoNoticias last September, this possibility of censorship is associated with the use of relays or relays with MEV bots (maximum extractable value). Relays are software programs used to manage transaction processing. By using certain MEV bots, they are able to order these trades in a way that they can earn additional profit.
Not all MEV bots are OFAC compliant. According to the quoted source, 25% of regulated relays use MEV-Boost, the solution from Flashbots developer group. Other sanctionable ones are Blocknative, Eden Network and BIOXroute Regulated.
Two striking facts about Ethereum
The statistics above also reveal two interesting details. On the one hand that Utilization of MEV bots increased from 10% in September 2022 to 88% at the time of writing this note. That means validators are turning to these tools to increase their sales.
On the other hand, Ether Capital, Celsius Network, and Okex top the ranking for validators with the highest percentage of censored blocks. Major pools also make an appearance on the list, such as Coinbase, Binance, and Kraken.
Why does this improve censorship resistance on Ethereum?
Everything explained above has a positive impact on Ethereum as a network as it improves its ability to resist censorship by external agents. A few months ago, Many transactions were rejected by almost 80% of validators.
This does not mean that they have never been approved or included on the Ethereum ledger or blockchain. They just had to wait for an unregulated validator to get them to include them.
With this new “greener” scenario, the network is better protected from the influence of external agents. For its users, this means the ability to use privacy tools like Tornado Cash without further ado.