🙄🙄🙄 High number of #Ethereum! blocks censoring #US sanctioned users 🙄🙄🙄

A significant portion of Ethereum's #blockchain​ exhibits censorship based on compliance with US sanctions. Labrys and Rated Network data indicate that around 42% of blocks post Ethereum's September 15, 2022, transition from proof-of-work to proof-of-stake have involved wallets sanctioned by the Specially Designated Nationals List. This figure recently peaked at nearly 50%.

The US Treasury Department's enforcement agency, the Office of Foreign Assets Control (OFAC), manages the Specially Designated Nationals List. In contrast to permissionless networks like Bitcoin, where any user can broadcast any transaction, OFAC-compliant relays on Ethereum selectively censor wallet addresses listed in US sanctions.

The widely-used software Maximum Extractable Value Boost (MEV-Boost) defaults to censoring these wallets, and many relays adopt its settings. MEV-Boost also outsources block production to its third-party marketplace, maximizing revenue through tactics like front-running, back-running, sandwiching, and other quantitative trading methods, exploiting everyday Ethereum users.

Prominent MEV-Boost relays include Flashbots, the largest, along with others like BlockNative, Manifold, Eden, BloXroute Max Profit, BloXroute Ethical, and BloXroute Regulated.

Relay operators adhering to US sanctions control which users can broadcast transactions on the Ethereum blockchain. Despite sanctions, some users attempt inclusion by routing transactions through non-OFAC-compliant pathways.

Source - protos.com

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