Ethereum developers are worried about censorship after The Merge and are preparing to fight it. Such censorship may come from regulators that comply with US sanctions.
Last month, the US Office of Foreign Assets Control (OFAC) hadblacklisted Tornado Cash and for the first time the US government has sanctioned smart contracts.
The impact of this move is significant for Ethereum as it affects a large number of stakeholders that are required to implement the sanctions, such as Circle, dYdX, GitHub, Infura, Oasis and Alchemy with blocked, suspended, and regulated addresses. Boycott — including related addresses — from accessing their products and services.
The situation also worries Ethereum supporters and developers that these steps will present more problems in the future. This could make the network vulnerable to censorship.
As Ethereum transitions to proof of stake — and validators become transacting on the network — it is possible that these validators may need to censor certain transactions in order to comply with current or future sanctions. Doing so by validators could damage Ethereum’s status as technology-neutral.
“If the underlying layer of Ethereum ends up being permanently censored. We will assume the Ethereum trial has failed and we will move on,” said co-founder Anthony Sassano. EthHub One of the biggest contributors of Ethereum. sayon Twitter
Among the largest validators are Coinbase, Kraken, Binance, Stacked.us, Bitcoin Suisse, stakefish, and Figment, all of which offer their users a stake in staking rewards. It is so popular that it occupies almost a share. 40% of ETH deposited by validator nodes on the Beacon Chain. There is also Lido Finance holding over 30% share on the Beacon Chain.
If these validators agree to comply with US sanctions. They are powerful enough to allow protocol-level censorship, with the Ethereum community being forced to support these validators, although they may disagree. and worse Due to the design of the Beacon Chain, users cannot unstake their ETH until the Shanghai upgrade, which is 6-12 months after The Merge.
However, as long as some validators do not participate in censorship Those sanctioned transactions will eventually be picked up in subsequent blocks. But the only problem is that it will take longer to process the embargoed transactions.
Coinbase CEO Brian Armstrong made it clear that his Stake service, which accounts for approximately 14% of the shares, will not censor transactions, and Armstrong does.saidHe will halt the company’s stake service instead of engaging in on-chain censorship on Ethereum.
At the same time, other stake providers such as Kraken and Bitcoin Suisse want to maintain their resistance to censorship. But there is no clear answer on how they will handle the sanctions.
Ethereum core developers also discussed mitigation strategies to combat censorship. In a Twitter discussion on this issue, Buterin gaveopinionthat he supports the idea of punishing validators who engage in censorship.