According to MEV Watch, 64% of all transaction blocks on the Ethereum blockchain comply with OFAC sanctions, per regulatory guidance.
The most influential factor is the widespread adoption of maximal extracted value relays, which reshuffle blocks of transactions to maximise rewards. Nonetheless, it is almost certain that this statistic will continue to spark debate concerning the use of MEV relays and the possibility of transaction filtering on the publicly viewable Ethereum network.
The most popular of these relays, accounting for approximately 49% of the total MEV block market, is Flashbots, which has stated that it will disregard transactions from the transaction mixing provider Tornado Cash, which was banned by the U.S. government earlier this year.
Status of OFAC compliant blocks: MEV Watch
Since The Merge, many participants in proof of stake have chosen to engage service providers to acquire validation incentives. This trend’s consolidation, coupled with the dominance of Flashbots, has led to an increase in the number of OFAC-compliant blocks.
The number of blocks proposed via the Flashbots relay doubled in the last month, from 2,210 on September 25 to nearly 4,000 on October 25, according to The Block Research.
Flashbots does not disregard the issue. The company provided solutions for mitigating transaction filtering and revealed an upcoming protocol that aims to open source and gradually decentralise the development of MEV technology.
The statements followed the departure of co-founder Stephane Gosselin, who resigned due to differences with the team regarding network restrictions.
As many network users view Flashbots as a source of censorship, the strategy lead Hasu recently stated that the lack of impartial relays and reliance on vertical relays that function as builders and may favour their blocks over others constitutes an ecosystem failure.
Although the team’s remaining founder Phil Daian does not foresee a scenario in which Flashbots establishes a fully controlled Ethereum network by proposing 100% of Ethereum blocks, the adoption of Flashbots continues to increase.
According to Flashbots’ Transparency Dashboard, the percentage of proposed blocks by Flashbots MEV-Boost Relay increased from 12% on October 1 to 56% at the time of writing.