Ethereum's MEV-Boost Censorship Issues Are Getting Better
“OFAC compliant” block builders only built 49% of all Ethereum blocks produced today.
- The number of Ethereum blocks produced by OFAC compliant MEV-Boost relays fell below the 50% threshold yesterday.
- The metric peaked at 79% on November 21, and has been steadily decreasing since.
- Non-censorious relays such as BloXRoute Max Profit and Ultra Sound Money have been taking market share from OFAC compliant relay Flashbots.
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Censorship risks over Ethereum’s block producing industry are melting away as OFAC compliant MEV-Boost relays keep building fewer and fewer blocks.
A Steady Decline
Ethereum’s censorship issues are slowly getting better.
According to data from MEV Watch, the number of Ethereum blocks produced by OFAC compliant MEV-Boost relays fell below the 50% threshold yesterday. On February 13, only 47% of blocks were produced by such relays; today that number stands at 49%.
On August 8, 2022, the Office of Foreign Assets Control (OFAC) added Ethereum-based privacy protocol Tornado Cash to its sanctions list, arguing the program was being used for money laundering. Major service providers like Circle and Infura immediately moved to blacklist Ethereum addresses associated with the protocol, as did Flashbots, an MEV research organization.
MEV stands for “Maximal Extractable Value”; the term refers to arbitraging on-chain trading opportunities by reordering transactions within a block while it is being produced. Flashbots claims to streamline the practice and mitigate its negative impacts by offering an off-chain block-building marketplace in the form of MEV-Boost. The organization’s willingness to comply with OFAC sanctions was met with outcry from the crypto community; in response, Flashbots open-sourced the code for their relay, allowing non-OFAC compliant competitors to efficiently participate in the Ethereum MEV marketplace.
Nevertheless, in the two months following Ethereum’s transition from Proof-of-Work to Proof-of-Stake, the number of blocks being built by so-called “OFAC compliant” MEV-Boost relays rocketed from 9% to 79%, prompting censorship concerns from within the community.
However, after peaking on November 21, the number of blocks produced by censorious relays began dropping. While Flashbots built over 46% of all MEV-Boost blocks today, non-censorious relays BloXRoute Max Profit and Ultra Sound Money took a healthy chunk out of the MEV-Boost market share—23.7% and 16.9%, respectively.
Disclaimer: At the time of writing, the author of this piece owned BTC, ETH, and several other crypto assets.