Top Builder On Ethereum is No Longer Censoring

The top builder on Ethereum stopped censoring transactions, bringing censored transactions to account for 35% of the total.

Beaverbuild.org, which represents 40% of all Ethereum blocks built with the ability to exclude transactions, stopped censoring transactions as of July 18

Ethereum infrastructure providers, including block builders, relays and validators, have the choice on whether to include transactions that come from addresses that have been flagged as malicious by authorities. It’s a controversial issue as on one hand, complying with authorities might prevent exploits, money laundering and other malicious activity, but it also goes against a core principle of blockchain technology, which is for it to be censorship-resistant.

Ethereum researcher, Justin Drake who pointed out the statistic on X, also wrote “inclusion lists remain a priority.”

There are non-OFAC compliant transactions getting processed by the more than 20 Ethereum builders. Beaverbuild shows 0.39% of its processed blocks are sanctioned, followed by Titan Builder with 1.56%. Rsync-Builder, and Flashbots are among the top without any unauthorized transactions. OFAC, the Office of Foreign Assets Control, is the DOJ’s arm that enforces economic and trade sanctions.

It’s important to note that not complying with OFAC regulations doesn’t necessarily mean you are committing a crime or that your transactions are less valid. OFAC’s rules can be created arbitrarily, and usually respond to the foreign policy of the U.S. government.

Beaverbuild.org did not reply to a request for comment for this story.

Relays and Validators

However, Ethereum builders’ censorship data doesn’t paint the entire picture.

According to the Ethereum Censorship Dashboard, on a bi-monthly time frame, nearly 60% of all builders continue to censor transactions that aren’t compliant with OFAC.

Things aren’t too different in smaller periods of time. In the past 30 days, 58% of builders censored transactions, while the number dropped slightly to 56% in the past fortnight.

While Beaverbuild is a unique case, given the overall censorship taking place in the builder sector, validators have maintained a very low degree of censorship. A statistic that flies in the face of previous reports of more than half of Ethereum’s transactions being censored.

The Ethereum Censorship Dashboard shows that a meager 11% of validators are censoring transactions. Validators include Coinbase, EtherFi, Binance, Rocketpool, Lido, and dozens of others.

Relays, which act as a bridge between block builders and the Ethereum network, show that 47.3% did not relay blocks with censored data, while 52% did.

Builders can exclusively build blocks that don’t contain certain transactions, relays can refuse relaying them, and validators can build local blocks that strictly exclude certain entities or only connect to censoring relays.

Data Discrepancy

MEV Watch, which tracks post-merge OFAC compliant blocks, shows there is more address censorship.

Nearly 35% of all blocks after Ethereum’s merge which occurred on Sept. 15 2022, are enforcing OFAC compliance. Meanwhile, 55% of blocks are not compliant (or simply ignore the mandates from the Department of Justice).

According to the website, Ethereum is censoring an elevated number of transactions due to the high level of adoption of MEV-Boost and its default censorship–which offers insight into Drake’s celebratory tweet that at least in some areas of the ecosystem, censorship is going down.