Less than half of the newest Ethereum blocks in the last 24 hours are in compliance with OFAC regulations

For the first time since October, less than half of new blocks during a 24-hour period are OFAC-compliant, owing in part to the increased market share of noncensoring block space choices.

After the United States government blocked Tornado Cash transactions for U.S. citizens in August, validators on the Ethereum blockchain moved swiftly to remove sanctioned transactions. For many in the crypto business, such actions were seen as censorship, which ran directly opposed to the concept of a decentralized network free of government meddling.

For many in the crypto business, such actions were seen as censorship, which ran directly opposed to the concept of a decentralized network free of government meddling.

Now, the trend is reversing, and more blocks containing Tornado Cash are passing despite not complying with U.S. Treasury Dept. sanctions.

49% of blocks that made it into the Ethereum blockchain within the previous 24 hours were OFAC-compliant, meaning they eliminated transactions that have been sanctioned by the Office of Foreign Assets Control of the U.S. Treasury Department.

This is a huge drop in censorship compared to the history of Ethereum. On November 21, 79% of blocks transmitted on Ethereum omitted OFAC-sanctioned transactions, a record high for censorship. The last time Ethereum’s censored block percentage dropped below 50% was on October 16.

In other words, more than half of the blocks added to the Ethereum blockchain in the last twenty-four hours are non-OFAC compliant.

Since September, when Ethereum changed its consensus method to proof-of-stake (known as the Merge), the majority of blocks that make it onto the blockchain pass via MEV-Boost, a middleware component that enables validators to request pre-made blocks from builders.

MEV-Boost was created to assist validators in earning MEV, or Maximal Extractible Value, which is the revenue generated by including or rearranging transactions inside a block.

Flashbots, an Ethereum research and development team, created the program to democratise MEV among validators and circumvent centralization concerns.

Flashbots has been successful in implementing MEV-Boost across the ecosystem, as 96% of validators now relay blocks using the middleware. The company also operates its own relayer, which 68% of validators use.

After OFAC prohibited Tornado Cash transactions for U.S. citizens in August, MEV-Boost faced a new set of challenges, namely censorship.

As a consequence of the punishment, relayers using MEV-Boost provide only pre-built blocks without Tornado Cash transactions to their linked validators. In other words, MEV-Boost was automatically filtering blocks.

Also Read: All UK Crypto ATM Companies Are Illegal, Declares The FCA