More than half of Ethereum validators censor transactions after merge

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According to MEV Watch, the amount of OFAC compliant blocks that censor approved transactions has increased by more than 51% since the Ethereum blockchain transitioned to the proof-of-stake (PoS) consensus algorithm earlier in September.

While the community calls on validators outside the US to run non-censoring relays to help the network remain neutral, such as BloxRoot Max Profit, BloxRoot Ethical, and Manifold, most validators run compliant MEV-boost relays such as Flashbots, BloxRoot selects regulated. BlockNative and Eden according to the above website.

In August, the Office of Foreign Assets Control (OFAC) – a financial intelligence and enforcement agency of the US Treasury Department – ​​approved addresses associated with Ethereum-based DeFi mixer Tornado Cash and the protocol. In October, crypto policy advocacy group Coin Center, crypto investor David Hoffman, human rights advocate John Doe, and software developer Patrick O’Sullivan filed a complaint against OFAC, alleging that the decision to approve Tornado Cash Protocol ” was unprecedented and illegal”. ,

At the time of writing, validators have not yet been forced by regulators to reject blocks containing accepted transactions, meaning that all transactions will eventually be included in the blockchain, even if most validators censor accepted transactions.

The situation could change if validators decide not to build on top of blocks containing accepted transactions due to the tighter regulatory environment. The community proposes reducing stakes for compliant validators, but the punishment for censoring transactions depends on majority consent. Since the largest validators are centralized regulated entities, it is highly likely that the majority will choose to comply with the regulators, making slashing not an option. In that case, a hard fork would become a last resort, but regulated centralized stablecoin issuers would choose the chain with the most censorship, creating a situation in which liquidity and the majority of users would remain on compliant chains.


BNB Chain Upgrades and Binance Burns 2 Million BNB After $560 Million Hack

BNB Smart Chain (BSC) – formerly known as Binance Smart Chain – is back online after suffering a bridge exploit that resulted in the loss of approximately $560 million in BNB.

After the hack in early October, the BNB chain was temporarily halved and Binance suspended deposits and withdrawals on BSC, so the hackers only managed to move $100 million in funds to other chains .

A week later, the chain was upgraded to version 1.1.16, a so-called “Moran hard fork”, which resolved several issues and re-enabled cross-chain functionality between the BNB Smart Chain and the BNB Beacon Chain. .

Following the hard fork, Binance has completed its quarterly burn of BNB tokens, removing over 2 million BNB from circulation, an amount roughly equal to the amount stolen by the hacker.

in other news

MakerDAO – the decentralized autonomous organization behind the stablecoin DAI – is going through a reorganization with the majority of MKR holders in favor of splitting the organization into smaller metaDAOs such as the Real-World Finance Core Unit, the Events Core Unit and the Happiness Core Unit. is voting. ,

Joseph Rotunda – Chief Regulator of Texas Securities – announced that he is investigating crypto exchange FTX and its CEO Sam Bankman-Fried for allegedly offering unregistered securities in the US. According to Rotunda, he was able to create a yield-bearing account on the FTX Trading app with his name and Texas address.

EU regulators have banned crypto services for Russian residents and entities, causing major crypto platforms to shut shop in the region. Following the declared mobilization, hundreds of thousands of Russian citizens tried to flee the country to avoid being drafted to fight in Ukraine. Poland, Czechia, Finland, Estonia, Latvia and Lithuania have already closed their borders to Russians holding valid Schengen visas to flee the country.

The US SEC is reportedly investigating Yuga Labs – the company that created the Bored Ape Yacht Club (BAYC) NFT collection. According to Bloomberg, regulators are examining whether NFTs issued by Yuga Labs should be subject to the same disclosure rules as traditional securities. The agency is also probing ApeCoin (APE), which first went live in March.


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