OFAC-compliant Ethereum blocks drop to 27%: what does that mean?

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  • Only 29% of all blocks on Ethereum are censored due to OFAC sanctions.
  • The percentage of OFAC-compliant blocks was much higher in 2022.
  • OFAC-compliant blocks can always be incremented.

Ethereum is the most widely used blockchain in the crypto industry. It is so common that there are even blocks that are supposed to be censored due to regulations.

However, Ethereum is known for being censorship resistant. And on Wednesday, that proved to be the case.

OFAC-compliant Ethereum blocks down 29%

Ethereum is becoming more censorship resistant. On Thursday, OFAC-compliant Ethereum blocks fell to just 29%.

Ethereum OFAC Compliance Chart.  Source: mevwatch.info.
Ethereum OFAC Compliance Chart. Source: mevwatch.info.

The Office of Foreign Assets Control (OFAC), which stands for Office of Foreign Assets Control, is an agency of the United States Department of the Treasury that administers and enforces economic and trade sanctions in order to support national security and foreign policy objectives.

In August 2022, OFAC sanctioned Tornado Cash, a decentralized crypto-mixer on the Ethereum blockchain and many linked Ethereum addresses. OFAC said Tornado Cash facilitated illegal and criminal money transfers and implemented measures to monitor certain transactions.

In response to the OFAC sanctions, some relay operators, most famously Flashbots, began filtering transactions that were not compliant with the OFAC sanctions. Initially, about 80% of all transactions on Ethereum were OFAC-compliant.

However, this number has decreased significantly since then. according to data From mevwatch.info, only 29% of all transactions on the Ethereum network are currently OFAC compliant. This means that Ethereum has maintained its censorship resistance feature.

on the flip side

  • Relays can begin blocking non-OFAC-compliant transactions at any time if there are attractive maximum extractable value (MEV) opportunities.

Why should you bother

Censorship resistance is one of the most important characteristics of a blockchain. The fact that Ethereum has maintained this characteristic over the years speaks volumes about its resilience and importance in the blockchain world.

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