Key points to remember
- The number of Ethereum blocks produced by OFAC-compliant MEV-Boost relays fell below the 50% threshold yesterday.
- The metric peaked at 79% on November 21 and has been steadily declining ever since.
- Uncensored relays such as BloXRoute Max Profit and Ultra Sound Money have taken market share from OFAC-compliant Relay Flashbots.
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Censorship risks on the Ethereum block production industry are melting as OFAC-compliant MEV-Boost relays continue to build fewer and fewer blocks.
A steady decline
Ethereum censorship issues are slowly improving.
According to MEV Watch data, the number of Ethereum blocks produced by OFAC-compliant MEV-Boost relays fell below the 50% threshold yesterday. As of February 13, only 47% of blocks were produced by such relays; today, that number is 49%.
On August 8, 2022, the Office of Foreign Assets Control (OFAC) added Ethereum-based privacy protocol Tornado Cash to its sanctions list, arguing that the program was used for money laundering. Major service providers like Circle and Infura immediately blacklisted Ethereum addresses associated with the protocol, as did Flashbots, an MEV research organization.
MEV means “maximum extractable value”; the term refers to the arbitrage of on-chain trading opportunities by re-ordering transactions within a block during its production. Flashbots claims to streamline the practice and mitigate its negative impacts by offering an off-chain block building marketplace in the form of MEV-Boost. The organization’s willingness to comply with OFAC sanctions sparked an outcry from the crypto community; in response, Flashbots opened the code for their relay, allowing non-OFAC-compliant competitors to effectively participate in the Ethereum MEV market.
Nonetheless, in the two months since Ethereum transitioned from Proof-of-Work to Proof-of-Stake, the number of blocks built by so-called “OFAC-compliant” MEV-Boost relays soared by 9 % to 79%, inciting censorship. concerns from within the community.
However, after peaking on November 21, the number of blocks produced by censorship relays began to decline. While Flashbots built over 46% of all MEV-Boost blocks today, the uncensored relays BloXRoute Max Profit and Ultra Sound Money took a significant share of the MEV-Boost market share: 23.7% and 16.9%, respectively.
Disclaimer: At the time of writing this article, the author of this article owned BTC, ETH, and several other crypto assets.