According to the CEO of blockchain development agency Labrys, Lachan Feeney, approximately 45% of all Ethereum blocks that are currently an MEV relay have passed flash validation and are compliant with US sanctions.
In an interview with Cointelegraph on September 30, Finney noted that while it was reported that 25% of all post-merger blocks verified were compliant with U.S. sanctions, this is a lagging figure and the current number is likely closer to one than any other block. .
Feeney noted that MEV-Boost relays are regulated companies, often based in the United States, that “control certain transactions in the blocks they create, specifically Tornado Cash transactions.”
The CEO also noted that there is a financial incentive for auditors to use the MEV-Boost relay, which will result in a slight increase in usage, noting:
“The problem, from the auditor’s point of view, is that these guys are sort of paying them to do it. So if you want to make more money, just enable this feature, and as a test, you kind of increase your income.”
The MEV-Boost relays are the primary devices designed to efficiently extract the Maximum Extractable Value (MEV). Since Flashbots are the most common, MEV-Boost relays effectively allow validators to outsource block production and sell the right to create a block to the highest bidder.
On September 28, Labrys released the MEV Watch tool, which can inform auditors about MEV-Boost relays that comply with OFAC sanctions. Referring to the tool’s motivation, Finney said:
“We’re just trying to get the attention of those who don’t realize that by running this program, they are probably contributing to network censorship.”
Finney noted that the worst case is often called strict censorship, where “nodes will be legally forced to ignore any block that has any of these transactions.”
“This means that no matter how long you wait, no matter how much you pay, you will never reach the point where these authorized transactions are included in the blockchain,” he explained.
He also noted that even in the case of soft censorship, when authorized transactions are eventually verified, it can take several hours and require high-priority fees, resulting in an unsatisfactory user experience.
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These findings were backed up by Ethereum researcher Tony Warstetter, who published a paper on September 28 indicating that of the 19,436 blocks confirmed by the Mev-Boost Relay Flashbot, none were involved in the Tornado monetary transaction.
How many blocks of different MEV Boost relays contain Tornado Cash transactions. Source: Tony Warstatter.
Concerns about censorship were widespread prior to the merger. Speaking to Cointelegraph, Coby Moran, principal researcher at crypto compliance and forensics firm Merkle Science, noted that the high cost of being an auditor could lead to audit nodes bundling into larger crypto firms that are more vulnerable to this. government sanctions.