Pundit Raises Fresh Censorship Concerns With Ethereum PoS

A pseudonymous market watcher recently raised concerns about censorship with Ethereum’s PoS, especially with the use of MEV-boost.

Ethereum’s transition to a PoS network, although fully revolutionary, has not come without concerns within the community. The magnificent event brought concerns about centralization and a looming battle between Ethereum and the SEC. In a recent highlight of events, a crypto proponent has raised another issue.

Pseudonymous market watcher Crypto McKenna brought the alleged issue to the public’s attention in the early hours of Thursday. Taking to Twitter, McKenna highlighted the use of MEV-boost by validators in Ethereum’s PoS network, noting that the practice subjects block validation to censorship.

“I hate to say it. But post PoS transition Ethereum has a validator censorship problem that is literally fuelled by monetary incentives.

Running mev-boost to return higher yield which requires OFAC compliance is insane. Needs to change ASAP,” the tweet says. 

I hate to say it.

But post PoS transition Ethereum has a validator censorship problem that is literally fuelled by monetary incentives.

Running mev-boost to return higher yield which requires OFAC compliance is insane.

Needs to change ASAP.

— McKenna (@Crypto_McKenna) September 29, 2022

McKenna alleges that using MEV-boost by validators on the Ethereum network will lead to censorship, as the practice allegedly requires OFAC compliance for block validation. McKenna argues that Ethereum validators have chosen to underplay the effects due to the higher yields that MEV-boost promises.

“Blockchain economics is designed to incentivise honest network behaviour. Mev-boost is literally economic incentives to censor transactions at the base layer,” McKenna added in another tweet, stating that the community needs to discuss and address the situation.

MEV-boost involves the outsourcing of block production by validators. The mechanism enables block validators to auction out block space to a marketplace filled with block builders. Usage of MEV-boost is not particularly mandatory but can bring in higher revenue for validators, raising staking yields by up to 60%.

Consequently, despite the discretionary nature of MEV-boost, several validators who are aware of it have taken to utilizing it. McKenna’s grievance stems from the fact that validators opted for the feature due to incentives.

Nonetheless, McKenna’s assertions have been dispelled by several proponents. McKenna’s remarks come from a faulty foundation, as OFAC compliance is not necessarily a prerequisite for block validation when using MEV-boost. Since OFAC-compliant relays exist, there are tons of relays that do not require OFAC compliance.

“mev-boost is neutral software that allows you to choose which relays you want to accept blocks from. It does not require any form of compliance but allows validators to make that choice. There are several non-ofac compliant relays,” a Flashbot developer noted in reply to McKenna.

Like the use of MEV-boost, the choice of relayers for validators is entirely open to the validators themselves. Several users highlighted this fact to McKenna, noting that validators who are concerned about censorship can always pick relayers that are not OFAC-compliant.

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