More and more ethereum blockchain operators have complied with OFAC sanctions, raising censorship concerns among decentralization advocates and network participants.
Toni Wahrstätter, an ethereum researcher, noted that five of the six largest block builders on the ethereum blockchain actively censor certain transactions in accordance with directives from the Treasury Department’s Office of Foreign Assets Control (OFAC).
The majority of these censored transactions originate from the Tornado Cash decentralized mixer, according to Wahrstätter, a protocol blacklisted by the Treasury Department due to its use by bad actors, including the North Korean hacker organization Lazarus.
Wahrstätter’s research further pointed out censorship in three key actors that keep the ethereum network running: validators, relays, and block creators.
Censorship has been a hot topic as blockchain technology advanced and cryptocurrency adoption spread around the world. Proponents of decentralized networks frequently express concerns regarding centralized entities and the power they have over decentralized operations.
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These concerns were raised by Wahrstätter, who noted that obstacles rooted in the concentration of power by a few network participants pose a threat to blockchain ecosystems.
“Censorship resistance is key to political neutrality on blockchains. No one entity should control 2/3 of the content of a blockchain. Decentralization is essential; “Centralization at any layer of the stack can harm the entire ecosystem.”
said Toni Wahrstätter.
In an attempt to combat the growing censorship and centralization on ethereum (eth), Wahrstätter suggested two solutions.
The first is an inclusion list to help censoring entities handle transactions sanctioned by OFAC. This solution also recommends removing non-compliant operators. Notably, this inclusion list was designed by ethereum founder Vitalik Buterin and developer Mike Neuder in August 2023.
Second, the researcher proposed encrypted mempools that would make it impossible for entities to censor on-chain transactions based on their origin or content.
Buterin, a veteran privacy and decentralization advocate, noted that censorship resistance is the foundation of any blockchain, crypto.news previously reported.
The ethereum creator also criticized the United States for its approach to crypto regulations and how they affect networks like Solana (SOL).
