Currently, 51% of Ethereum blocks are censorable.It’s time for Flashbot to end

Censorship MEV-Boost relays, especially Flashbot, are generating more and more Ethereum blocks. If the MEV organization really cares about his Ethereum, they might consider taking it out of operation so the developers can make long-term fixes.

51% of blocks are threatened by censorship

Ethereum’s MEV censorship problem is getting worse by the hour.

MEV Watch reports that 51% of Ethereum blocks yesterday were created by so-called “OFAC compliant” MEV-Boost relays. This is a relay that has publicly announced its intention to censor future transactions via Tornado Cash or other protocols targeted by the US Treasury.

The arbitrage opportunity discovered by rearranging transactions within a block during block generation is called MEV, or “Maximum Extractable Value”. For on-chain merchants and validators, Flashbots and the rest of his MEV-Boost relay essentially act as an off-chain block building marketplace. Since January 2020, MEV has robbed blockchain users of more than $675 million from him, according to Flashbots data.

Since Ethereum switched to a Proof-of-Stake consensus mechanism, the number of Ethereum blocks created by Flashbot and other MEV-Boost relays has increased. MEV monitoring data shows that 43% of blocks were generated without his MEV-Boost relay as of Oct. 14, down from 90% on Sept. 15. This is understandable given that validators can make significantly more money by delegating block building. Responsible for MEV-Boost relay.

The problem is that the largest MEV-Boost relays, especially Flashbot, have revealed that they do not include transactions related to Tornado Cash in the blocks they generate. The Office of Foreign Assets Control (OFAC) added it to its sanctions list on August 8, citing the privacy protocol’s exclusive use by money launderers and North Korean cybercriminals. Ethereum has responded and Flashbots is one of the companies to officially announce “OFAC compliance”.

Flashbots had to open-source their relay code in response to criticism from the Ethereum community, but they still produce about 80% of the MEV-Boost relay blocks. Twenty-four hours before the time of writing, the MEV-Boost relay has generated over his 57% of all Ethereum blocks. Of these, 88% explicitly declared that they refused to include related transactions in any way in Tornado Cash. As already mentioned, this effectively means that 51% of all blocks were created by relays willing to censor Ethereum if necessary.

what’s happening?

The issue has been raised by members of the Ethereum community for about a month, but it seems that there are few remedies proposed. Additionally, well-known community members seem to avoid addressing the issue out of urgency. Just over two weeks before the scandal was first reported, his 25% of all Ethereum blocks generated since September 15th had been created by censorship relays. That percentage is currently at 34% and rising rapidly.

Bitcoin proponent Eric Wall has been a strong voice against the restrictions. In his Devcon presentation yesterday, Wall said there are several approaches to addressing the censorship problem, such as creating Proposer Builder Separation (PBS) infrastructure, Inclusion Lists, or Partial Block Auctions. claimed. Unfortunately, these ideas still need to be explored and may take months or years to implement. Ethereum developer Vitalik Buterin, when discussing these same concepts on the Flashbots forum, pointed out that PBS could be “realistically” two years away from him eight years away.

The behavior of Flashbot and other MEV-Boost relays throughout this issue, despite the fact that Ethereum engineers need to uncover how to adapt the blockchain infrastructure to remediate this vulnerability. It is difficult to avoid criticizing Members of the Flashbots team are said to have promised to “take action if censorship occurs.” [got] But according to Gnosis co-founder Martin Köppelmann, we’ve heard very little from the organization so far. The U.S. Treasury Department has not explicitly ordered U.S. block makers to censor Tornado Cash transactions, but Flashbots has yet to publicly explain why it feels compelled to do so. Major cryptocurrency exchanges Coinbase and Kraken, two of Ethereum’s largest verification companies, have no problem processing Tornado Cash transactions in blocks. Why does Flashbot feel otherwise? This group doesn’t mind discussing its claims.

Flashbots co-founder Stephane Gosselin may also challenge the organization’s direction. Last week, Gosselin said he left Flashbots because “the team had a lot of issues.” When Gosselin was asked if he would elaborate further on the nature of the dispute, he replied “hopefully soon.” Gosselin has expressed support for establishing his slicing mechanism, presumably against the relay itself, so it’s important to keep that in mind.

Other prominent Flashbots team members have been resolutely silent. According to a thread recently retweeted by Flashbots strategy leader Hasu, as of Oct. 12, Tornado had only 0.617% of his Ethereum block containing any of his cash transactions. According to the same thread, he had a 99% chance that a Tornado Cash transaction would be taken by a block producer within 5 blocks. The problem with this line of reasoning is that it amounts to a crackdown. Just because other block producers can trade Tornado Cash right now, it doesn’t mean Flashbots aren’t jeopardizing the neutrality of the Ethereum network.

Flashbots co-founder Phil Daian similarly downplays criticism. When Köppelmann complained about the amount of blocks processed by his MEV-Boost relay for censorship, Daian simply retweeted the message “Gnosis needs to run a relay”. I need to launch a competitor. Amazingly, Diane also said this morning: [Flashbots]In response to claims that the company had its own searchers and was able to hunt for MEV opportunities while offering a MEV-Boost service. Hard to believe, given that Ethereum itself is poised to be censored.

When it comes to MEVs, Flashbots are largely seen as a beneficial influence.By moving MEV bidding off-chain, the group has lowered gas prices and, as stated on its website, has made a significant impact on Ethereum users. It helped reduce MEV’s “negative externalities”. Simply put, you don’t need flashbots for Ethereum to exist. Flashbot should stop operating if Tornado Cash transactions cannot be validated for fear of possible OFAC impact. This should happen until Ethereum’s core developers figure out how to modify the blockchain’s infrastructure to prevent censorship. His Flashbots, his MEV-Boost relay, which is the largest and still highly regarded, isn’t the only one claiming to be “OFAC compliant.”

Flashbot must take the initiative here and make some tough decisions. This is in the best interest of the Ethereum ecosystem. Open sourcing the Flashbots MEV-Boost relay technology has so far clearly not been enough to address the censorship problem. This makes it easier for new Flashbots projects to thrive. was announced today at Devcon.

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